Monday, 26 January 2009

LA IT spend to reach £3.2bn in 2008/09

Socitm’s annual IT Trends in Local Government report is again essential reading by suppliers to the UK Public Sector. It reports that ICT spending by local authorities is forecast to increase by around 5% in 2008/09 (i.e. around the level of inflation in 2008 – so no surprise). The £3.2bn breaks down to:

44% staff costs
13% external services
12% software
11% hardware
9% data and voice communication
3% consultancy

As in previous years, I would not recommend using the absolute figures as entirely accurate, but use the report - as its title suggests - to identify trends. In this area it is interesting to note that hardware spend seems to be relatively static, whilst expenditure on data and voice communication has reduced slightly – but given the price competition in both these areas, this would suggest that LA’s are buying more in both these areas, but at lower prices. The report attributes this to the need to replace technology bought as part of the e-government programme, but I suspect the price reductions disguise an even bigger increase in procurement than e-government replacements.

External services and consultancy seem to be on the increase, but I suspect that the figures do not take into account the amount of ICT spend that has been outsourced as a result of BPO (Business Process Outsourcing) and departmental initiatives (like BSF – Building Schools for the Future – for secondary schools). Overall, I believe that the real increase in ICT spend (i.e. above the rate of inflation) is therefore even larger than identified in the Socitm report.

Is the increased spend on ICT delivering real benefits for LA’s?

The report suggests that it is - noting that “a range of initiatives are being pursued to deliver efficiencies both at the tactical and strategic level” and “new technologies could offer opportunities to deliver more radical changes in public service provision”. However, I suspect that the comment “ICT is too often regarded as a utility rather than a means to transform public services” reflects more the frustration of IT Directors and Managers that end-user departments are not seeing the full potential of investments in ICT.

John Serle, editor of IT Trends, noted: ‘There remain some big opportunities for ICT to transform local public services. The things that were easy to do have been done. Organisations will need to be bold and ambitious with their use of technology in the next few years. Some of the new emerging technologies can be exploited to transform local public services, delivering better more cost effective customer service’.

I believe that this emphasises the importance of ongoing education of Officers and Managers in departments outside ICT. There is no doubt that ICT is an enabler in the current move to transformation of services and processes. Unlike some colleagues in LA’s, I do not see it as the driver – to be truly successful, that drive must come from end user departments – it is the role of ICT directors and managers to educate those non-ICT staff in the opportunities and benefits offered by ICT.

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