More local authorities will outsource business processes and ICT in the next five years. This is a key finding from a report by Kable, a provider of public sector research.
Local government is the largest area of public sector ICT spend in the UK. It is estimated that the spend will reach 3.7b pounds in 2008/09, representing 22 per cent of all public sector ICT spend. Over the next five years spending is predicted to grow at 2.8 per cent to reach some 4.3b pounds by 2013/14.
The report identified a number of reasons for this growth. Local authorities are adopting new approaches to procurement. Education and healthcare organisations and third sector bodies are also entering the outsourcing market. Partnership working with cost sharing is making outsourcing more affordable and at the same time making the contracts more attractive to suppliers. The development of local education partnerships to implement the Building Schools for the Future programme is already providing a model for this approach.
Kable researchers collected data from 200 local authorities and interviewed some 100 senior managers. The report notes that organisations that have rejected outsourcing solutions for the last 10 years are unlikely to be won over by the same old arguments, no matter how much pressure they are under. It describes the challenge for suppliers as finding ways to engage profitably with smaller customers, and deliver more than just efficient ICT services.
ICT in UK local government to 2013, cost 2950 pounds, is available from Kable. http://www.kable.co.uk/kabledirect/index.php?option=com_content&task=blogsection&id=3&Itemid=107