A mass skills shortage is the biggest risk to the Government Digital Service’s (GDS) attempt to make more than a billion pounds worth of annual savings across Whitehall.

It published its business plan for the 2014/2015 financial year, listing the main challenges and milestones it will face in the next 12 months, and identified the difficulty of recruiting and retaining staff with suitable digital skills as a major risk.

Along with a reduced budget, it said this made it harder to find the employees it needs and make the £1.4billion in savings it requires.

GDS’s budget has been cut from £21.1million in 2012 to £16.12million this year, despite taking on a significant number of new staff in that period.

Under a section titled “Risks to the plan”, the document said: “We have insufficient funding, which could mean we’re unable to hire the people with the skills we need. We will address this by reviewing the business plan and budget quarterly so that the GDS Operations Board can take action if required.

“We have difficulty hiring and keeping skilled staff. We will address this by: making plans and processes to attract and keep the best digital and technology people; defining clear career paths; identifying development opportunities for staff; reviewing compensation and reward packages to meet market expectations.”

GDS employs 425 civil servants, mostly on fixed-term contracts, and 210 interim staff.

The plan said GDS is expected to deliver £700million in efficiency savings, much of which will come from the 25 “exemplars” – high-volume government transactions that are currently in the process of being digitised.

“Annual recurring benefits from the exemplars could be around £607million. Annual recurring benefits from other transactions related to the exemplars come to £372million. That’s a total of £979million from exemplars and associated services,” said the document.

“Across [the eight biggest] government departments, we estimate that by digitising all transactional services we could save £1.4billion every year.”

By March 2016, GDS expects to have delivered 70 per cent of the potential savings from the exemplar services.