Local government will spend £600m less on ICT in 2006-07 than it did in 2005-06, as IT directors realise cost savings from both outsourcing and business transformation projects.
The Society of IT Management estimated that councils will spend £2.7bn over the coming financial year, compared with £3.3bn, after surveying more than 200 authorities.
A large proportion of the savings comes from outsourcing or partnering with private-sector companies. Some 75% of councils surveyed used external companies to supply some IT systems. More than 50 authorities had large-scale outsourcing, public-private partnerships or managed services contracts.
John Serle, the editor of Socitm’s IT Trends survey, said, “The e-government programme has been replaced by a new, wider initiative to modernise public services in which technology will play a central role.
“To deliver the customer-centric services that are required, councils will be investing heavily over the next few years in new systems.”
Birmingham, London Borough of Hammersmith, Rochdale and Sandwell all started large outsourcing or partnering arrangements in the past 12 months.
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