IT workers get rich in the City

Public sector organisations are losing out to booming City institutions in the increasingly fierce war for IT talent.

The share of IT contractors working in the public sector has dropped for the first time in three years to just over a quarter (26 per cent), according to a six-monthly market report by Giant Group.

This has coincided with a rise in the share of contractors working in the financial services industry by two per cent to 26 per cent over the last six months.

Financial services is now the fastest growing sector for the use of IT contractors in the UK, on the back of booming profits and regulatory compliance initiatives that are driving a new wave of IT investment by investment banks and hedge funds.

Top IT workers in the City can now command pay rates of £1,000 per day on the back of this increased IT investment in the financial services sector.

Matthew Brown, managing director at Giant Group, said in the report: "As the volume of deals increases the need for faster and more reliable IT systems grows. New platforms also need to be developed to process the growing array of financial instruments in areas like derivatives."

Another reason for the drop in public sector IT contractors, according to the report, is the completion of many e-government projects that utilised temporary IT skills to meet the December 2005 deadline for putting services online.

However, the share of IT contractors in the public sector is still significantly above the 13 per cent level recorded in the Giant Group's first market report in 2003.