Public sector IT spend to drop – whoever wins election

Public sector IT spending – which represents almost a third of the UK’s total IT expenditure – will fall in the coming year, no matter which party wins the forthcoming general election, according to new analyst research.

That drop will represent the first time the public sector has cut its IT spending year-on-year for over ten years, according to TechMarketView.

Happily for the IT industry, TechMarketView predicts that this decline will be offset by a steep increase in private sector IT spending in the 2010 / 2011 financial year, and overall IT spending will grow for at least the next three years.

There was also good news for outsourcers. The research predicted public sector use of both IT and business process outsourcing is expected to grow, especially in local government.

The rate of IT spending growth during the next four years does depend on which party is in power, the analyst company said. Under Labour, compound annual spending growth between 2009 and 2013 is expected to be 2.9%; under the Tories – currently the bookies’ favourite to win the general election – it could be as little as 0.8%.

Pete Swabey

Pete Swabey

Pete was Editor of Information Age and head of technology research for Vitesse Media plc from 2005 to 2013, before moving on to be Senior Editor and then Editorial Director at The Economist Intelligence...

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