UK Gov's Digital Britain Implementation Plan calls for 'Establishment of G-Cloud'

We've been discussing the very same thing at work over the last couple of weeks. A dedicated government-scale private cloud which could support most agencies.

More details:

The Government’s Chief Information Officer (CIO) and CIO Council has consulted with high tech industry trade body Intellect and has commissioned a strategy study to investigate the use of cloud computing in Government, which will be called a ‘G-Cloud’.
“The strategy study has established a route-map towards the creation of a G-Cloud, as part of the rationalisation of data centres used by Government and the wider public sector,” it said. “This would both allow Government to benefit from the core attributes of Cloud Computing e.g. enhanced user experience, flexible pricing, elastic scaling, rapid provisioning, advanced virtualisation while also maintaining the appropriate levels of security, accountability and control required for most Government systems, and lead to substantial savings in costs.”
“The establishment of a G-Cloud will however require investment in technical development and physical facilities, and the CIO Council and the Intellect Public Sector Council are now developing the strategic business case to justify funding the G-Cloud,” it said.
The Government said that if the business case is proven then it would expect a G-Cloud to be saving money in procurement and IT projects within three years.