Responsibility for government IT procurement has been moved from the Treasury to the Cabinet Office as part of a shake up of UK public sector spending.

Purchasing agency Buying Solutions, which manages IT project procurement across government departments, will become part of a new Efficiency and Reform Group, which is charged with improving accountability and reducing waste.

Three senior UK business leaders will be involved in the running of this new group. They are Tate & Lyle chairman Sir Peter Gershon, Tesco executive director Lucy Neville-Rolfe and Dr Martin Read, a non-executive director for insurer Lloyd’s. Read was in charge of a 2008/2009 review of back of government back office and IT operations.

"We want a slim but strong centre that can drive down the cost of government, so protecting as best we can the crucial front line services on which our citizens depend," said Cabinet Office minister Francis Maude in a statement. "By taking this really tough stance on inefficiency and waste, we can tackle Britain’s massive budget deficit and bring order back to the country’s finances, whilst protecting vital frontline services."

Last month, chancellor of the exchequer George Osborne announced that the coalition government would be cutting £95 million from public sector IT spending this year. Osborne has also implemented a freeze on ICT projects valued at £1 million or more and scrapped Becta, the non-departmental agency tasked with promoting government use of IT.

The previous Labour government has come under tough criticism for the amount it spent on large-scale IT projects, with former Public Accounts Committee chair Edward Leigh claiming in March that "departments had wasted millions". The long-serving Tory MP specifically criticised a failed £7 billion Ministry of Defence project administered by EDS, now HP Enterprise Services.