Efficiency and security are the issues that top local government IT chiefs' agendas in 2008, according to Socitm.
The Society of Information Management's annual IT Trends 2007 survey also showed that IT spending is forecast to increase by 9% to £3bn following a fall in spending last year.
Many local authorities are focusing on the need to increase efficiency in the face of a tighter financial climate, and according to Socitm, and IT is set to play a key role.
The Society said IT is well placed to help alleviate pressure placed on councils by the Comprehensive Spending Review 2007. The "toughest financial settlement in years" means local authorities need greater efficiency and Socitm reports that "ICT functions are in fact well set up for this task".
IT leaders see business process re-engineering and partnership working as the best strategies, followed by channel switching and shared services.
However the survey suggests that many organisations are still insufficiently focused on using IT to improve business performance.
Security was also top of the agenda, with IT leaders showing a growing awareness of the implications of security failures. Organisations identified over 180 security concerns - from careless use of passwords to data centre disasters - and the cost of securing information held on local government computers has dramatically increased.
John Serle, editor of the report, said, "Traditional concerns of ICT management, such as choosing the right technologies, supplier management and staff recruitment and retention, have become less important in recent years. Efficiency, shared services and benefits realisation are the new buzzwords. It's also encouraging to see that notwithstanding an overall more difficult financial climate in local government, ICT functions have more resources in 2007/08 than they had one year ago."