When Buying Solutions, the national procurement partner for UK public services, announced in May that it had signed a new software licencing deal with Microsoft, there was some consternation that the deal was held up as a reinforcement of the Government’s Open Source Action Plan.

The answer was that the agreement allowed “licences already purchased to be transferable within the public sector without further cost or limitation”, which was a proprietary software-shaped hole built in to the action plan.

A bigger question, however, concerned the value of the agreement, which Buying Solutions trumpeted would save the tax payer £75m over the next five years. As Sirius’ Mark Taylor pointed out, “It’s nonsense giving a notional saving without revealing what the actual cost is.”

At last week’s Red Hat Open Source Forum in London Graham Harrop, managing director of Ultris Ltd, a UK public sector software supplier, provided some clues as to that cost.

According to Harrop, the public sector represents a ₤300m a year business for Microsoft UK, while government was a ₤200m a year business.

Harrop was previously responsible for relationships and sales to Central and Local Government for Microsoft in the UK, so he should have some idea.

Harrop left Microsoft in March 2008 so those figures are no doubt out of date. Additionally it is not altogether clear what bodies are able to make use of the Buying Solutions agreement – although it is implied that it applies to “the whole of the public sector”.

Given that, it would be reasonable to suggest that the £75m saving over five years is being achieved against a cost over five years *in the region of* £1.5bn. Both the UK Labour and Conservative parties have touted research that indicates that the use of open source software by central government could save the UK Government at least £600m per year.