Public-sector bodies could raise an extra £70m each year on the resale costs of IT equipment according to a National Audit Office report released on Tuesday.
The average public-sector body replaces its hardware every five years but, by cutting this refresh time down to three years — in line with current best commercial practice — there may be "significant countervailing savings" from, for example, reduced maintenance costs and improved resale values, according to the recent report.
In the 2005/06 financial year, public bodies bought 1.7 million units of IT equipment, at a cost of £2.7bn, with the majority (85 percent) of equipment procured being computer units and monitors, according to the National Audit Office's (NAO) Improving the disposal of public sector ICT equipment report.
As well as generating more revenue from reselling better-conditioned, second-hand IT equipment, the report also estimates the public sector could have saved up to £1.4bn on operating costs by not hanging on to technology for so long.
But refreshing equipment more often also comes at a cost, the report conceded. Moving from a five- to three-year hardware turnover would increase public-sector procurement costs by an estimated £1.8bn.
And, although the NAO claims that cost savings could be realised from reducing upgrade times, one of the report's authors, Daniel Varey, said that the NAO was not recommending that government should definitely adopt a shorter-timescale approach to refreshing PCs.
Environmental impact
"While the report does demonstrate that more revenue could have been raised by selling machines at a younger age, what we clearly state is that we are not recommending that government should change to a three-year refresh," he said. "Financial value is not the only value that needs to be taken into account — there are significant wider costs and benefits that need to be taken into account, such as sustainability and environmental issues around changing the refresh period."
Shortening refresh times could mean government would use more technology for a shorter amount of time, which could have environmental costs, the report stated.
"A key question is whether reducing the refresh period for ICT equipment (for example, from five to, say, three years) will lead to a higher net volume of ICT equipment being purchased and the implications of this to the environment," the report said.
Although the report coincides with the enforcement of the technology recycling legislation, the Waste Electrical and Electronic Equipment (WEEE) directive, at the beginning of July, the study has been in development for around a year.
Consultations and workshops to inform the study were organised by IT management group Intellect and vendors and service providers, such as Dell, Fujitsu, IBM and EDS.
But, despite the involvement of several proprietary technology companies, Varey claimed that the NAO was cognizant of the efficiencies that could be gained by more use of open-source software by government, which is seen as requiring less-sophisticated hardware — and, as such, fewer hardware refreshes.
"We do consider thin-client technologies and things like that. There are lots of different aspects to this: government in other respects, such as the OGC [Office of Government Commerce], has been looking at open-source software," he said. "Most people in government need a basic Word application, and a PowerPoint application and not much more, so why do they need [more sophisticated IT]?"
Despite the breadth of the report, Varey claimed that it wasn't in its scope to find a definitive answer to the problems poised by IT disposal at this stage. However, because of the large amounts of money involved, government needs to have a clear strategy on disposal of IT in the longer term, he said.
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"There are lots of different options around procurement and disposal. Government hasn't been joined up in its thinking about that and it needs to be. A lot more analysis needs to be done and it hasn't been," he said.
Although the NAO report is only a recommendation at this stage, there is a possibility that it could lead to a Public Accounts Committee (PAC) hearing. After calling witnesses from groups, such as the OGC, PAC would then write a report, which would be sent to the Treasury and which the government would need to respond to and takes steps to address, according to Varey.
The report also claimed that more than one in 10 central government organisations said they did not know whether data wiping took place on obsolete IT equipment before it was recycled or resold. Also, around 70 percent of central government organisations are not obtaining any evidence that data wiping has been carried out on IT equipment before recycling or reselling.
The procurement of public-sector IT equipment is forecast to increase to £4.1bn by 2010/11, with an estimated 2.6 million units of equipment being bought, according to the report.
The report also raised the issue of distributing unwanted government technology to schools and colleges in the UK — in line with a model developed by the Canadian Computers For Schools organisation. Set up back in 1993, the organisation refurbishes equipment donated from government and businesses to schools and libraries in Canada.
