By Steve Ranger, 17 January 2006 15:00
NEWS
One in four IT contractors in the UK is employed by the government, making it the biggest user of freelance IT consultants in the country. But the public sector could soon find itself in a bidding war with the banks for the most talented contractors.
The government has more than doubled its share of usage of freelance IT consultants over the last two years, according to research from contractor services company Giant Group.
Its survey of 2,500 contractors found that 27 per cent now work in the public sector.
The financial services sector is the second biggest user of contractors, with 24 per cent of the market - up from 19 per cent in 2003. In contrast, the telecoms sector has slumped from second to fourth place, now using 12 per cent of the contractors compared to 21 per cent in 2003.
Giant Group's managing director Matthew Brown said the willingness of the public sector to use external consultants "has surpassed all expectations".
He said in a statement: "The public sector has always been the poor relation in terms of its utilisation of temporary IT staff but efficiency drives and increased scrutiny of major IT projects have persuaded civil servants of the necessity of bringing in private sector expertise."
As demand from government continues and the City ramps up spending on security and compliance, the two sectors will be going head-to-head for the best staff, he predicted.
Brown added: "With the need to control public finances pressing, and the City's requirements for IT contractors growing, the government could find itself locked into a costly bidding war.
"If key IT personnel are poached by the City, there could be serious consequences for the government's IT agenda."
He said mergers and acquisitions, spending on Basel II and data security will boost demand for temporary IT staff from financial services organisations.
The rollout of new networking technologies, such as voice over IP and 3G mobile services, could also create a "long-awaited" boost in demand for consultants in the telecoms sector, according to Giant.
Comments
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1. Stuart Fawcett
Why is the Government increasing dependence on both consultants and contractors.
Government will always be a major IT user with unique requirements so should have a core talent pool to address this requirement throughout the country.
Can organisations such as the SOCITM not help in creating the Government's own IT consultancy - a dedicated team that takes the best systems to all government departments and thus also facilitates simpler integration.
2. misceng
Stuart Fawcett is right that the government should have its own IT experts but government departments don't work that way. They are run by administrators with no IT knowhow. These people are steeped in the tradition that experts should be on tap not on top. They cannot recruit IT at salaries paid for junior staff so they have to get round the system by paying the going rate to consultants. They are then in the position of trying to specify their requirements without knowledge of computing so the brief given to the consultants is wrong and is changed without adequate change control until the system is late over-budget and does not serve the purpose. Having been in the Civil Service I have seen it happen.