Comment from Kate Craig-Wood, CEO and founder of hosting company Memset
As expected, there are big cuts for central and local government. They said one third for central government, and that will certainly have an impact on IT spending as they look to make the savings. However, I think there is good scope for efficiency improvements within central government IT, and am hopeful that this will finally end the large incumbents stranglehold on government big IT by forcing public sector to look to agile, efficient SMEs and new innovations in cloud computing and shared services to deliver those services.
The 28% cut for local government is going to be challenging for them though, I think. The local councils I have engaged with outside London are already pretty lean. There too, though, there are savings to be made in ICT. The G-Cloud should really help there; if they can spool up a number of generic line of business software as a service solutions that can be used across local government it will certainly cut the IT budgets – there is a huge duplication of systems at present.
It’s not all bad news though. IT was mentioned as a way to make savings in the fight against tax evasion; £900m for Inland Revenue I think, to save £7bn, so there is still some faith in IT’s ability to improve operational efficiency.
In summary, I expect ICT budgets to take part of the brunt of the required savings, but there are also opportunities for those able to bring the flexibility and efficiency modern IT (for example, agile development and cloud computing) into the public sector.