Government expenditure on shared IT services is expected to top $1.27 billion by 2012, due to the growing burden on government departments, says market analysis firm Datamonitor.

According to Datamonitor, growing demand from constituents and the burden of an aging population is forcing governments to consolidate common services into a shared organisation. Shared services models enable public bodies to improve the efficiency of technology deployments and will potentially reduce the duplication of efforts of back-office staff, say the report’s authors.

The report, Outsourcing and Shared Services in Government IT Management, predicts that IT revenue from shared services projects in the US and Europe will grow at around 6% from $57.4 billion in 2007 to $76.2 billion in 2012.

Kate McCurdy, a government technology analyst with Datamonitor said in a statement: “By consolidating these services into one organisation to serve many agencies, governments will reduce the costs of maintaining multiple systems, ensure consistency of service to internal stakeholders and disseminate best practices while also allowing individual units to focus on their core responsibilities.”