CBI calls for immediate freeze on public sector pay and recruitment

IT departments in the public sector need to start considering pay and recruitment freezes, the director of public services at the Confederation of British Industry says.

IT departments in the public sector need to start considering pay and recruitment freezes, the director of public services at the Confederation of British Industry (CBI) says.

The entire sector will have to consider taking immediate measures to start tackling the UK's budget deficit, Susan Anderson says, and recruitment freezes should be top of the list for the new administration.

"There will be some tough choices on labour costs," she says. "Private sector pay over the last year or two saw no rises, while public sector pay kept rising. And the private sector has had to downsize and freeze recruitment. There are some immediate things that can be done."

The business world is increasingly preoccupied with the UK's budget deficit, and uncertainty around the General Election increased nervousness in the financial markets.

Anderson says immediate, short-term and long-term measures will have to be taken to tackle the deficit, including some short-term investment in IT to make sure longer-term savings are possible.

"Things really need to start happening in the first 100 days [of the new government]. The area where we think there is most potential to save costs is around re-engineering things. If we do not start it now we will not have any savings in three years from now, because there will not be any infrastructure in place," she says.

But the tight budgets that are expected over the next few years might have some advantages - Anderson says she is optimistic they will help to curtail the number of high-profile IT project failures by providing a financial incentive to get them right. But there also needs to be more top-level responsibility for the programmes that go wrong, instead of an organisational structure that rewards "good ideas" rather than an ability to deliver on projects.

"Over the last 10 years there has been plenty of money in the system, so when things have not worked people say they will just do things differently. But there is going to be less money in the future, so we cannot afford to have the failures," she says.

But it is not all doom and gloom in the technology sector - the CBI expects the digital economy to grow to £229bn by 2012 - one of the leading proponents for growth in the UK economy.

"Half a million more technology professionals will be needed over the next five years, and we see it as a real source of competitive advantage," Anderson says.

What needs work, she says, is the ability of UK business and public sector organisations to make effective use of this technology. "We have great people but we are not very good at making use of technology in all aspects of business. We are dragged down by poor application, even in the private sector."

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