In the past, individual departments paid different amounts to either build their own centres or outsource the service as part of their own locked-in IT contracts. This deal will, for the first time, provide a cross-government approach to buying data hosting services and will save up to £105 million for the taxpayer by utilising the government's combined buying power. It will also allow government to tap into the latest advances in industry and improve energy efficiency – using data centres that are equipped with the latest technological advancements such as real time dynamic cooling and unique monitoring systems, all within secure compounds.

The new service will be available to the whole of government and the wider public sector. The 3 initial customers are the Department for Work and Pensions, the Home Office and the Highways Agency (operations), and each will be able to use the service on a 'pay for what you use' basis which will avoid the risk of being locked into long-term, inflexible contracts.

Minister for the Cabinet Office Francis Maude said:

"As part of this government's long term economic plan, we're determined to utilise our unique buying power and become a more intelligent customer. It doesn't make sense for departments to host their servers in different ways and at different costs, and in the past Whitehall wasn't even sure how many of these centres there were."

"With this new joint venture, we will save millions and be able to access the necessary commercial and technical skills in the market to create a thriving new business that will deliver better services and allow government to share in its future success."

Steve Hall, CEO at Crown Hosting Data Centres said:

"The joint venture company will simplify the data centre services selection process in government and further drive the unbundling of large legacy contracts."

"It provides publicly-funded, mandated and regulated organisations with a pre-approved contract that leverages the buying power of the whole of government for the fastest, simplest access to secure data centre services."