The UK Government Digital Service (GDS) is planning to establish a new Crown Hosting Service in a bid to merge hosting services across Whitehall departments, which would also save about £530m per year by the next five years.

According to GDS’ latest quarterly progress report for the government digital strategy, the Crown Hosting Service would be set up by the end of 2013, while it is being worked out to submit an outline business case seeking approval in January 2014.

During March-July 2014, a public tender would be issued to pick one or more dealers to support the new service, according to ComputerWeekly.

The briefing paper said once a number of viable solutions have been developed, it is proposed that a broader number of departments will be profiled to ensure scalability and broader fitness for purpose for transition to the proposed solution at a later point.

"Consolidation and migration to a single Crown Hosting Service would result in savings of £530m by 2018/19, with the payback on the initial investment being achieved in less than two years," said the paper.

GDS also revealed that the central government had invested about £1.6bn in the 2012/13 financial year in awarding contracts for hoisting services across Whitehall departments.

The new service is anticipated to be launched to all government departments by September next year.