IT spend continues to fall in UK as companies prepare for possibility of double-dip recession


IT spend continues to fall in UK as companies prepare for possibility of double-dip recession

Kathleen Hall

IT spend in UK private and public sector organisations has fallen since last year, with average expenditure dropping 0.6% per user to £3,275, 2.48% of total spend, research has shown.

But while private sector companies expect IT spend to remain the same or increase marginally, 91% of central government and 81% of local government respondents expect significant decreases in their budgets, according to the survey from corporate membership body The National Computing Centre (NCC).

"For most, investments in IT have fallen year-on-year in real terms," said Steve Fox, managing director of NCC. "The danger with this is that a lack of investment will impede the pace of recovery when the economic climate improves."

Of the 160 organisations interviewed, 44% expected application developments to be postponed or cancelled. Operational spending averaged 39% of total IT spend, but is expected to decline by 6.4% over the year.

"With the threat of a double-dip recession, it is not surprising that spending remains depressed," Fox said. "The situation is a catalyst for widespread take-up of cloud, virtualisation and mobile working technologies, which promise similar levels of service, but can be achieved with less capital outlay, are scalable and enable organisations to save costs in other areas."

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