The public sector cut an estimated 1,000 IT staff last year, and the job losses are due to continue in 2011, according to a study from Socitm.
Staff numbers in IT sections at governmental departments are continuing to drop due to budget pressures, with public authorities relying on outsourcing and service sharing to compensate, according to the IT Trends in Local Public Services 2010/11 report, published on Thursday.
Public authorities cut IT jobs by an estimated four percent, according to Socitm. However, the public-sector IT body argued that the current period of instability is actually strengthening IT operations at the authorities.
"With tighter financial controls in place and with stronger governance overseeing ICT spend, there should be greater accountability and transparency in decision making across organisations," wrote editor John Serle in the report.
Job cuts have continued into 2011, but the numbers of people employed in some IT functions have risen, according to Serle. "Perversely, our survey shows that the number of staff employed by the central ICT function has risen slightly," he wrote. "This suggests that ICT is going through a period of further consolidation."
Socitm predicted "modest growth" in communications and central IT spending for 2011, with capital spending forecast to fall by eight percent and departmental spending by 14 percent.
Perversely, our survey shows that the number of staff employed by the central ICT function has risen slightly.– John Serle, Socitm
Serle said outsourcing is used "selectively" by almost all sizes and types of organisation, and service sharing is also a growing feature of IT sourcing. About 10 percent of local councils are actively sharing services, with the rest considering such arrangements.
"The number of organisations who claim to have joint strategies with other organisations remains fairly low," he wrote. "This is an area for concern, particularly at this time when pooling resources and joining up services is being used to deliver benefits from their collective strength. It is expected that organisations will make better use of shared service arrangements in areas of service desk and network support."
Last year's 2.6 percent drop in IT budgets was "much lower than expected", Serle said, coming on the heels of a decline of 11 percent in 2009. "Borrowing to finance ICT schemes has also doubled since 2009, indicating revived confidence in the benefit of investing in ICT," he added.
IT skills crisis
The report found that public authorities are struggling to recruit staff with certain key skills such as business analysis and business process re-engineering. This conclusion echoes other studies that have indicated a looming IT skills crisis in the UK.
In spite of the cuts, Serle noted that public authorities actually managed to achieve higher service levels in 2010. Also on a positive note, Socitm found that IT functions have come to be well integrated into service planning.
"ICT is no longer just about supporting or automating the 'back office'," said Socitm president Jos Creese in a statement. "It is being recognised as a delivery function in its own right, through contact centres and self-service, both internally and externally."
In March, Socitm said that the G-Cloud, the government's cloud-computing initiative, may be made obsolete by the Public Sector Network (PSN), a government networking project combined with private-sector cloud services.
In the report on Thursday, Socitm said interest in PSN is still greater than in the G-Cloud, but that the G-Cloud could still take off in the coming year, "assuming it becomes a reality rather just a concept".
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