Headlines: January 26th, 2010

The capacity of councils and other public bodies to make efficiency savings will be compromised by cuts in ICT budgets and staffing levels according to the ICT Trends survey report from the Society of IT Management.

The report, based on a survey of IT professionals in local government and other local public services, predicts councils ICT budgets will be cut by 11 percent in 2009/10 and that capital spending will fall by 20 per cent. Staffing levels are likely to be cut by 10 per cent. The survey also revealed that budgets have already been cut, staff numbers reduced and that these reductions have already impacted on services.

This situation is in sharp contract to last year’s survey findings, when for 2008/09, ICT spending by councils was forecast to increase by 5 per cent, and councils were planning to spend over £3.2bn on ICT in 2008/9, overtaking the record levels achieved in 2005.

This reduction in resources has moved the focus of ICT developments towards strategic transformational initiatives aimed at cutting costs. These include flexible working and rationalisation of accommodation together with business process improvement and document management. More effort is being put into driving self-service through the website while also reinvesting in customer relationship management.

The report calls for a radical rethink about how technology can be exploited for the public’s benefit. The worldwide infrastructure, communications and technology services available today offer an outstanding opportunity to public service providers to exploit the potential at the pace demanded.

Ovum, a global advisory and consulting firm, has predicted that the IT services market in the UK will grow by less than 2 per cent in 2010, but that less than a third of this will come from the public sector which is facing trenchant cuts. By 2012 the report projects that the public sector IT services market will be growing slower than the private sector, which is an inversion of the historical pattern.