Apparently the government paid 5 mil to extend support (to them) by a year.
Why didn't they just spend it on updated licenses?
Because we simply can't get off XP as quickly as we'd like: we're gagging to get everything up to 7, but there are big bits of our software setup that are broken for 7 -- for us, mostly specialist medical stuff written a million years ago, but also some single-sign-on software that the vendor swore would be updated but the update plain didn't work. Changing *that* would be throwing good money after bad when we're halfway through its service life.
Large corporates move slowly because of stacked dependency crap like this. Coping with the simmering frustration is a basic job skill (we've had people quit because they couldn't Do Everything Right).
In our place we have about 800 of 3800 PCs still on XP; our slice of that 5.5 mil works out at £16 per PC for a year of security patching. That's actually not a bad deal at all. A year gives us space to move the bulk and pick off the freaky gear bit by bit. Why didn't we get it all done last year? We were finishing up our 7 deployment, and fending off assholes who want 8 or Ipads (GO THE FUCK AWAY). And hiring someone to oversee all this stuff -- I'm just a server monkey. Which reminds me, I have some Win2000 servers to virtualize...
IE6 died years ago in the NHS; IE7 is mandated for some national products so you can't just throw it away until they sort it. And because it was mandated by them, it's the standard to which Bob's Patient Wrangling System was written, and Bob has retired, and the company has been sold... *and breathe*
For home users looking to switch, I hear that Linux Mint is the free-and-nice variant of choice right now.
...which reminds me, that no-screen-bad-fans old laptop I use as a NAS/torrent/sync box is XP. Arse.