Vodafone allows government savings to be made public


The telecommunications company Vodafone is the only major government supplier which has agreed to the release of data about how much Whitehall has saved through renegotiation of contracts.

For the last financial year, the government and Vodafone agreed that the state could save £5.3m on its payments to the mobile phone company.

This was one of a number of renegotiations with large suppliers pursued by the coalition after it came to power.

In October 2010 the Cabinet Office Minister Francis Maude told the Conservative party conference that the new government had saved "several hundred million pounds" in one year by modifying contracts with its biggest suppliers.

He said this was based on "dealing with them as a single customer instead of letting them play one part of government off against another".

But the Cabinet Office refused to provide a breakdown of this figure by supplier, in response to a freedom of information request from the BBC.

It did provide a departmental breakdown, which showed that the Ministry of Defence and the Department for Work and Pensions accounted for over half the total of the overall government savings target of £671m.

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Private companies that do business with the state will increasingly have to face up to questions of openness”

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The Cabinet Office argued that releasing company-by-company details of savings would damage relationships with suppliers and jeopardise negotiations with them.

The BBC appealed to the Information Commissioner, who last month upheld the government's refusal, except where suppliers themselves consented to the release of the figures.

The only company to agree was Vodafone.

"We believe in being as transparent as possible in our dealings with the Government," said a Vodafone UK spokesperson.

The company denies that the savings agreed indicate that government departments were previously being overcharged.

"Our dealings with central government are now far more about helping government find a better way of working," the spokesperson said.

Campaigners hold up "tax dodger" signs in a protest against Vodaphone The communications firm has faced protests

"We strongly believe that using our technology and expertise will save many hundreds of millions of pounds in areas such as property, energy and fixed-line communications. We are prepared to make an investment in providing services to the public sector to help the government secure the much bigger gains that can be made by working smarter."

Vodafone's financial relations with government have recently been highly controversial because of the company's tax affairs - and the sums involved in this dispute are much greater than the £5m savings - but in the context of these contract renegotiations, Vodafone has been more willing to be transparent than any other large Whitehall supplier.

It illustrates how private companies that do business with the state will increasingly have to face up to questions of openness and freedom of information.

The willingness of public sector suppliers to accept greater scrutiny of their contracts is going to grow in importance as an issue, in line with the pressure for transparency in value for money in public spending.


The Cabinet Office has got in touch to say that since the Information Commissioner's decision, another government supplier has agreed to the release of details of savings - the IT services group Capgemini. In its case, the savings agreed through contract renegotiation total more than £200m, although this figure is over several years until 2017.

The savings agreed with another supplier are expected to be announced later this week. This new policy of disclosing such savings represents a change in approach from the Cabinet Office since the commissioner's ruling.

The Cabinet Office argued that the BBC's FOI request should be rejected even when the companies themselves were happy for the information to be released, because by a process of elimination it could lead to other companies who were not so willing being identified. Now the government does seem keen to publicise some of the company-by-company savings it has agreed.

Martin Rosenbaum, Freedom of information specialist Article written by Martin Rosenbaum Martin Rosenbaum Freedom of information specialist

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  • rate this

    Comment number 1.

    The state could save 5.3million in payments to vodafone?Just what exactly is the overall bill then and for what?My mobile bill costs me £12.00mth and I get web,free calls and txts for that.

  • rate this

    Comment number 2.

    Wonder if the contract includes extra security to stop certain parts of the media intruding, or are they in the contract like "inclusive hacking minutes" or "multi media manipulation"

    "You have reached the voicemail of DC, please make your donation after the tone, remember to have your credit card on hand"

  • rate this

    Comment number 3.

    Somewhat insulting really when you consider billions in tax Vodaphone have dodged to offer such a paltry reduction.

    How much of this is simply no longer charging for services no longer required because the people using them have been made redundant so just a reduction in profiteering by these firms?

  • rate this

    Comment number 4.

    Given the way Vodafone has dodged £6 BILLION of tax liability, this is - as #3 says - an insult and a revolting PR stunt. Vodafone are an ethics-free organisation.

  • rate this

    Comment number 5.

    Release of information may have been inevitable because of proposed merger: Telefonica UK & Vodafone UK - joint venture. EU is on fact-finding mission which may lead to formal antitrust proceedings. EU Commission says its request does not necessarily mean it has competition concerns YET.

  • rate this

    Comment number 6.

    EU Commission asked Deutsche Telekom, France Télécom, Telefónica, Vodafone & Telecom Italia to explain discussions over last 2 yrs. Commission has requested information from 5 large telecom operators + GSMA, mobile operators' association. The requests for information relate to the manner in which standardisation for future services in the mobile communications area is taking place.

  • rate this

    Comment number 7.

    Deutsche Telekom & France Télécom are co-owners of Everything Everywhere, which runs under the T-Mobile & Orange brands in UK. Telefónica is parent of O2, & Vodafone also has British customers, leaving Telecom Italia as only 1 of the 5 without presence in UK. Citing confidentiality, GSMA refused to comment, except to acknowledge receipt of correspondence from regulators.

  • rate this

    Comment number 8.

    I heard they got a discount on thier iphones.

    Now thats "power"

  • rate this

    Comment number 9.

    Great we saved £5.3 million. However as we lost up to £7.8 Billion in lost tax due to the HMRC fiasco.

    Thanks Vodafone sooo... generous, I don't think so.

  • Comment number 10.

    All this user's posts have been removed.Why?

  • rate this

    Comment number 11.

    I wish Vodafone could show them how to communicate with the people who fund the Government in taxes.

  • rate this

    Comment number 12.

    A saving of £5.3 Million on a spend of what?

  • rate this

    Comment number 13.

    4 Grimble
    Vodafone are an ethics-free organisation.

    Seems to be the norm for big business and political parties just now.

    Trough, trough, trough....

  • rate this

    Comment number 14.

    @BluesBerry: The Telefonica UK & Vodafone UK joint venture is not a "merger". It is, as it says, a "joint venture": to get their foot into M-Commerce services - that is, ways and means of making payments and making purchases with mobile devices.

    However, I totally agree with the implication that this venture will be anti-competitive and may be against the best interests of the "M-Consumer."

  • rate this

    Comment number 15.

    And onto topic: that Vodafone can offer services to one body for a different price from another is something that has affected me in particular. I was part of a venture to bring unmetered web access to UK consumers in 1996 and we failed because we were told it broke OfCOM competition rules to offer a service to subscribers of one telephone network for a different price from another.

  • rate this

    Comment number 16.

    No doubt the communications budget is a stupidly large as the education system's computer budget. Whenever the Government gets involved with tech they normally pay 8-9 times the going rate. Schools buying £400 computers at £3500 is a classic.

    For what the Government pays these tax dodgers they could have their own communications network.

    Who's 'legitimately' fiddling the system this time?

  • rate this

    Comment number 17.

    . . . presumably all this savings are on contracts negotiated by the previous government . . . makes £250,000 to chat to Dave seem pretty insignificant!

  • rate this

    Comment number 18.

    Got the attention of every body this one has eh !

  • rate this

    Comment number 19.

    @BluesBerry I can't imagine Vodafone and Telefonica in a merger. In fact that was the first I heard of it. There would be too much hassle in terms of anti-competition law. Vodafone is an outstanding British company that does a lot for the citizens of the UK as well as on a global platform. Imagine what the country would lose if Vodafone relocated to another part of the world!


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