Tech sector optimistic for the 2009 Budget


Tech sector optimistic for the 2009 Budget

Rebecca Thomson

Tomorrow's Budget could be the most technologly-focused yet, with the government's recent interest in the IT sector's economic importance leading to cautious optimism that technology will come out of it well.

But there is an acceptance that contracts will be renegotiated in tighter conditions, and that some cost savings may have to come through IT as the government aims for £15bn of efficiency savings.

Richard Baron, head of taxation at the Institute of Directors, says, "We would like to see a commitment to getting the public finances back into balance. Some parts of the IT industry make a good living from public sector contracts, and getting the economy back into balance will mean negotiating these contracts will be tougher."

Despite this, the IT sector is hoping government policy will back up the recent rhetoric, with Gordon Brown speaking out about the importance of the UK's technology sector in bringing the country out of the recession.

And although there is likely to be some pain for parts of the sector, industry experts are emphasising the importance of technology in helping to move the economy on.

William Higham, head of public affairs at IT trade association Intellect, says, "It looks at though the government is ambitious to make this the budget for technology.

"The government has recognised the technology industry as a source of future growth and jobs for the UK economy. But there is fierce international competition to attract international technology investment, so everything lies in the detail."

The public sector may be forced to cut costs through IT and back-office systems in the same way as the private sector, and organisations may look for savings as contracts come up for renewal.

But the important thing to remember, Higham says, is that technology's real power lies in cutting the wider operational costs of government.

Also important, Higham says, will be the government's support of IT skills. "The technology sector is one of the few sectors in the UK economy that is, in parts, still hiring in volume. If the government has set its course towards an economy with a stronger technology base, it is vital that it plans ahead to produce the core skills to fill future vacancies, and ensure the public have sufficient literacy to make the most of it."

Denise Plumpton, director of information at the Highways Agency, says she expects to see pressures on all areas of public spending, along with more scrutiny over new project investments and a move towards a smaller, tighter scope for projects.

She emphasises the importance of seeing IT as a way to increase efficiency and put Britain in a good position to move on quickly from the recession.

"I think that in the current climate, good investments in technology and applications can help all organisations, both in the public and private sectors, gain efficiencies and deliver market competitiveness.

"I really hope that there is continued investment in research into new and emerging technologies so that as we come out of the recession, the UK and its organisations are best placed to steal a march on others."

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