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Whitehall devolution threat means IT suppliers "must improve" at selling cloud to local councils

Public sector IT suppliers must swot up on selling services to local councils, as Whitehall proposes devolving more power to them

Public sector IT suppliers must get better at selling cloud to local government, as responsibility for a wider range of IT spending decisions looks set to pass from Whitehall to local councils from 2016.

As set out in the launch of chancellor George Osborne’s 2015 spending review, Whitehall departments have been told to find ways to cut their resource budgets by up to 40% by 2019/2020.

To achieve this, the review puts forward the idea of passing on responsibility for delivering more services to local government, as Osborne and co push on with their efforts to claw back a further £20bn in public spending and eradicate the deficit for good.

If this devolution of powers to local government becomes mandated in the finished version of Osborne’s review, due for publication in November 2015, council CIOs may find themselves having to stretch their IT budgets further to deliver the new services falling under their remit.

Whatever the outcome of the review, Jessica Figueras, research director at IT market watcher Kable, said the mooted spending cuts look set to shake up the entire public sector and its attitude to IT.

“The feeling is that radical transformation will be needed, and all parts of the public sector are going to need to do things fundamentally differently, which does create technology opportunities,” she said.

“Many of the different parts of business done by the government now may not be in the future and this could lead to an acceleration in the pace at which government services become digitised,” she added.

This could pave the way for more local councils to adopt cloud, as they look for ways to free up budget by cutting back on large capital expenditures, according to Chris Farthing, founder of public sector procurement advisory firm Advice Cloud.

“Having worked quite extensively in local government for some time now, we’ve already seen how the government austerity measures have taken hold in this part of the public sector, but some fairly major transformational stuff needs to happen now as they prepare for the prospect of further cuts,” he told Computer Weekly. 

An opportunity for IT suppliers

This presents public sector IT suppliers with an opportunity to win more business at a local government level, particularly those with services listed on the government’s G-Cloud procurement framework, said Farthing.

However, they will need to develop an appreciation of the nuances involved when doing business with local government, which – if they’ve mainly sold their services to central government in the past – may prove a stumbling block, in particular for small and medium-sized enterprises (SMEs), he added.

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Smaller companies sometimes lack the time, resources and experience to build out their knowledge of what specific pressures different departments in local government are under, for example.

But they could stand to lose out in the long-run by not getting to grips with this if, as is expected, responsibility for more central government IT spending decisions end up being passed downstream.

“SMEs don’t always appreciate some of the challenges local governments face, which sometimes means they end up trying to sell them services they already have or offering generic services that make it difficult for buyers to see how they stand to benefit from using them,” he said.

“When a supplier has done some market research, attended some local government events and has a firm grasp of how their technology can actually do to benefit a specific department in a council it really makes a difference.

“Someone who does that marks themselves out as someone who understands the market and the pressures local government is under, and how they can change that,” Farthing added.

In anticipation of this potential shift in IT buying responsibility, Advice Cloud has partnered with former Hampshire County Council CIO and BCS president Jos Creese to help the latter firm’s SME clients develop an understanding of the pressures local government IT buyers are under.

“The local market is growing in importance and value, but it is also complex and diverse and can be hard to deal with without an understanding of its mechanics, drivers and decision-making processes,” said Creese.

“Cloud offers huge benefits, not just in terms of reduced cost, but in terms of integrated and shareable platforms accessible across multiple local public services. That can be essential for joint working and information sharing in areas such as health and social care.”

Farthing said partnering with Creese should also provide clients with a clear idea of what the demands of a CIO working within local government are.

“You can get that from attending events, but people have to be quite circumspect with what they say, whereas Jos is freed from the politics and can use his experience to guide our clients who include suppliers and end users,” he added.

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Not sure the bods in Central Gov or IT sales, understand what is happening in Local Government.
Our budgets are being reduced and although we have limited amounts of capital to spend on items which we have to include maintenance/ongoing costs into. We have reducing revenue budgets and how are cloud systems bought/funded? through ongoing revenue payments or subscriptions. The money for those is disappearing so no wonder cloud take up in Local Government is low and its likely to get lower.
Cheers Paul.
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