: February 4th, 2015

Councils across the UK could make savings by checking how many expensive software licences are actually being used and what each costs, according to new research.

Many local councils are paying out huge sums unnecessarily every year to ensure they are not breaking licensing agreements, research by Professor Ashraf Labib of Portsmouth Business School and The Business Software Centre, in Basingstoke found.

In one example, a single council was found to be paying £1,200 per user for certain software licences whereas similar councils were spending just £100 per user per year with the same supplier.

Professor Labib said: “Comparatively small amounts like that, when amplified across an entire council workforce, means some councils are paying far too much for licensing in a bid not to fall foul of licensing agreements.”

Many IT managers were so concerned about non-compliance that they were over-compensating by buying too many licences, he said.

“Software licensing is a bit like the tip of the iceberg. One can observe the cost of the licenses but it becomes harder to quantify the hidden costs such as maintenance, support staff, security, hardware and software updates, procurement and so on, when one purchases assets that are not used.

“If software usage is optimised it will lead to a greater cost-effectiveness throughout the IT of any organisation.”

The government announced last month that it was cutting funding to councils in England by up to 6.4 per cent for 2015-16. Some councils criticised the move, saying any further cuts to already heavily reduced funding from Central Government would take them to ‘breaking point’.

The research examined councils in the UK and how much each paid per user for software licensing was carried out in the same month. Responses were sought via a Freedom of Information request to 158 local councils, to which 129 councils responded.

Phil Hames, from The Business Software Centre, said the problem of over-paying for licences could be solved if more councils conducted a thorough audit of their usage and compared this to how many licenses they are paying for.

Professor Labib said: “There appear to be no metrics or benchmarking in software licensing costs across the local government sector. The annual cost of software per computer user in similar councils varies dramatically. With common metrics and benchmarking councils could apply best practices and save millions. About a third – 40 councils – in our sample didn’t even have the tools to measure their software usage against the number of software licenses they pay for.

“Put simply, most councils are spending more on software licenses than they need because they have no way of knowing who is using what and, as a result, most are over-estimating how much they have to pay.”

The researchers estimated that 434 councils in the UK could collectively save up to £168m a year on software procurement costs by learning and implementing the best practices of the top performing 20 per cent of councils.