Public sector bodies are failing to get the best value from their PCs, laptops and other ICT equipment. The National Audit Office believes that by becoming more intelligent in procuring and disposing of equipment substantial savings can be made. Better management of ICT assets is becoming increasingly important as procurement is forecast to increase from 2.7 billion pounds in 2005-06 to 4.1 billion pounds by 2010-11.
Leading commercial organisations dispose of their equipment typically at around three years of age when it has a residual value and can be resold. The public sector disposes of equipment at just under five years of age when it has little or no value and has to be disposed of at a cost. It is estimated that if public sector organisations reduced the age of disposal five to three years this should increase the financial return from resale by around some £70 million per year. There would also be a reduction in maintenance costs.
Public bodies need to improve ICT asset management practices and their awareness of commercial market values for used equipment. This would enable them to become smarter players in the ICT disposals market and negotiate better deals with the ICT industry, whether in the purchase of new equipment or where they make use of such organisations’ disposal and outsourcing services. Some manufacturers offer discounts on the purchase of new equipment to reflect the likely residual value of returned equipment, but little evidence was found that discounts are taken up by public bodies.
Although most public bodies use the same specialist disposal agents, there is little joined-up disposal activity. Aggregating demand and improving the coordination of public sector disposals activity would help to secure better deals and bring wider application of good practice whilst assisting in realising scale economies to reduce overheads.