E-government ballyhoo leaves councils still pulling tight on their IT purse strings

Business Focus is a weekly column providing at-a-glance statistics and commentary on spending priorities and trends in particular sectors. This week we look at local government.

Business Focus is a weekly column providing at-a-glance statistics and commentary on spending priorities and trends in particular sectors. This week we look at local government.

Among large local authorities, the per-desktop annual spending on IT of £4,098 is substantially less than the wider UK business average of £8,455.

And the lack of IT investment in smaller authorities is even more marked, with an annual spend per desktop of just £1,125 against a small-business industry average of £3,132.

What is more striking is that this represents investment of less than 14% of that made UK-wide by all larger firms.

Local government's relative under investment in IT, particularly among small authorities, comes despite five years of relatively generous budgets for IT as a result of Tony Blair's enthusiasm for e-government.

It also stands in contrast to spending in central government, where smaller departments invest more than the national average spend on IT among small and medium-sized enterprises.

There is also relatively little investment among local authorities on IT services, unlike central government, where about 60% of the per-desktop annual budget goes in this area, reflecting government departments' reliance on major service providers such as Fujitsu, Accenture, BT, Capgemini and CSC to deliver services.

Despite these investment levels, there is pressure on local authorities to cut IT costs still further by sharing services over the next five years.

The Transformational Government strategy, published by the government last November, said, "There is significant scope for rationalisation through sharing, particularly if central, local and other public sector bodies can team up."

Ian Watmore, head of the Prime Minister's Delivery Unit, has indicated a particular preference for larger-scale shared service projects across local authorities.

Whitehall has also identified the types of project it believes can be delivered as shared services, including back-office functions such as finance, human resources and payroll, contact centres, technical infrastructure, data sharing, information management, information assurance and identity management.




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