Headlines: June 3rd, 2005

Britain is leading the way in Europe in overall public sector spending on ICT and we are near the top in terms of per capita spend and spending as a proportion of gross domestic product, according to new research.The study – ICT Spend in the European Public Sector – has been produced by Kable and details spending across the 25 member states of the European Union as well as in Norway and Switzerland. The report estimates that total expenditure on ICT in the European public sector will be in excess of 87 billion Euros this year and that it will reach 94 billion by 2007.

Kable highlights the UK government’s commitment to using technology to modernise its processes. The UK total spend this year is estimated at just over 20 billion Euros, which is more than 40 per cent larger than the figure in either Germany or France. Our spend makes up 23 per cent of the European total compared with just 15.8 per cent of European GDP and less than 13 per cent of the population.

Kable analyst Scott Bryan, said, “There are other countries spending similar amounts per capita or as a proportion of their GDPs, but they have smaller economies than the UK. From the larger countries the UK is by far the biggest spender, and has emerged as the leader in the breadth and diversity of its investment in public sector IT.”

The UK’s high spend is largely due to the big investments in e-government and back office infrastructure and access tools, including big projects such as Connecting for Health, the joined-up justice system and putting PCs into school classrooms. There are other differences between how Britain spends its money and European patterns. The largest share of Britain’s national total – 37 per cent – goes to external services such as consultancy and outsourcing. The European external services average is only 16 per cent. This, the report says, illustrates how far the UK has gone in using the private sector.

The report questions how ICT investment is helping to improve public services in the UK and says its impact is notoriously difficult to measure, even in the private sector. The benefits of much of the ongoing big project spend have not shown through so far as the projects are either in their early phases or not operational yet.