Outsourcing and shared services bridge tech budget gap

Outsourcing, shared services and open source software are some of the ways local authorities plan to bridge the IT budget gap that has opened up following the end of the e-government push of recent years.

According to research by local government IT user group Socitm, at a predicted £2.7bn for 2006/07 council tech spending is back to just below 2004 levels. Growth in IT staffing has also come to an "abrupt end" with reduction in the number of consultants employed accounting for most of the change.

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As a result authorities are looking at getting more out of their budgets - for example squeezing more value from better procurement of technology and using shared services to boost efficiency.

But, because local authorities need to squeeze the ROI out of their existing infrastructure before moving to a shared environment, this is unlikely to happen overnight. Sharing staff resources between authorities may also offer further large savings, as well as building a system once and sharing the knowledge with the whole of the government sector, the report said.

Socitm said partnerships and outsourcing are the other strategies most mentioned by IT managers thinking up ways of bridging the resource gap, with open source another option, although not one that is currently being used much by local authorities in the UK.

Socitm president Peter Ryder said the research shows that on key issues such as shared services, IT managers have a "demonstrably positive and open-minded approach".

Standardisation and consolidation will be key themes in government tech spending over the next couple of years as the public sector looks to reduce operational costs and improve service delivery, according to separate research by analysts at Government Insights, part of IDC.

It also predicts that new business models including collaborative service delivery and technology disruptions, such as open source software, service-oriented architecture, are impacting government tech choices.