Just 12 per cent of UK public sector CIOs are banking on a budget increase for the 2014 fiscal year, CRN research has revealed.
As part of our recently launched Public Sector Report, we quizzed more than 200 IT leaders from local and central government, healthcare, emergency services, education and various arm's-length bodies on their technology needs, priorities and spending plans. Some 43.6 per cent of respondents are bracing for a budget decline of at least five per cent this year, with 5.3 per cent expecting to reduce outlay by more than a fifth.
A total of 37.6 per cent believe their FY14 will stay more or less flat, while nine per cent are planning to increase spending by between five and 20 per cent. Just three per cent are anticipating an increase of upwards of 20 per cent.
Elsewhere in our research, two thirds of CIOs report that they outsource at least some of their IT function to a third party, with 13.3 per cent revealing the vast majority of it is outsourced. But among those who use outsourcers or plan to, a resounding 61.3 per cent claim they would not be prepared to use an offshore provider.
One IT chief explained that a lack adherence to service-level agreements (SLAs) from suppliers has led to a number of functions being taken in-house again. The survey respondent outlined a belief that their organisation will be better served by investing time and resources in developing internal staff and systems.
"We have withdrawn from some SLAs, taking or returning those functions in-house, because of falling levels of support in response time or skills shown," said the respondent. "In some cases, the rising costs compared to the support offered has made the SLA unattractive. In other cases, equipment reliability and in-house staff skills have improved to such an extent that the SLA becomes uncompetitive.
"We have rationalised the equipment and software used, while growing our capability and capacity. We have made major purchases for key software and have been able to improve our in-house services by unifying communications and collaboration software. All in all, we are able to do more through continued commitments to staff development and maintenance of the in-house systems."
Another offered a succinct piece of advice to anyone considering a big-ticket outsourcing deal: "Beware a 2e2 experience and do not put all your eggs in one basket."
The core research at the heart of the Public Sector Report is based on Freedom of Information requests made to 95 councils covering the length and breadth of the UK, with annual IT budgets ranging from £22,000 to £50m. Authorities provided us with data on how much they have spent on IT in each of the past two years, and with whom they have spent it.
Total spending across all 95 councils fell 2.675 per cent in FY12 to £643.2m, with some big investments offsetting a broad trend of decline. Some 56 councils reduced spending during the year, with 38 increasing tech outlay. More than one in three reported a double-digit budget decline.
BT was listed as a top supplier by 49 councils, with a total of £87.2m spent with the telco giant. Capita won £32.2m of business, while SCC snaffled £21.4m in local government contracts.
To read the full 32-page report, which features much much more research, spending and supplier data, alongside analysis and interviews with leading suppliers, analysts and vendors, resellers can register to receive their free copy here. We hope you enjoy the inaugural CRN Public Sector Report, and we look forward to hearing your feedback.
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