Public services fuel growth

Double-digit growth in IT spending this year and last in the public sector will drive it to overtake the production sector in...

Double-digit growth in IT spending this year and last in the public sector will drive it to overtake the production sector in 2005, according to the latest Computer Weekly IT Expenditure Report. The services sector is set to remain by far the largest spender on IT, with an expected £47.9bn spend in 2005.

Planned projects at the Ministry of Defence, the Department for Work and Pensions, and in the criminal justice system, as well as the NHS national programme, are factors behind the increased spending in the public sector.

"Although business surveys show increased activity in manufacturing, the growth is not enough to hold back the tidal wave of investment in IT for public services," said Kris Wicka, managing director of Kew Associates, who produced the report.

Richard Steel, head of IT at Newham Council, said although the figures surprised him, the increase in spend by local authorities was driven by central government's efforts to provide local services electronically. "IT is now so much part of the strategic agenda that it is used to drive down costs in other areas," he said. "In any kind of service improvement you have to invest up-front to achieve efficiencies."

Overall, the report predicts that 2004 will see a rise in IT expenditure of 8.4%, the strongest since 2000.

IT spending growth to double >>

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