Analysis: Expect sweeping public sector changes

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Analysis: Expect sweeping public sector changes

The public sector has been bread and butter for many in the channel, but change is coming, regardless of who wins the General Election. Simon Quicke reports

The state of the economy demands that moves are made to reduce budgets in the public sector, which has ­remained largely unaffected by the recession, and the knives are sharpening.

Research from TechMarketView anticipates that public spending cuts will come into effect regardless of who wins the election, with central government and the police taking the brunt of the cost saving measures
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Over the past decade, spending on IT software and services by the public sector has risen to 28% of the entire UK technology spend, but that is not going to be sustainable.

If elected, the Tories are expected to be more severe in making cuts than Labour, and the widespread ripples of any change in government will spread out to resellers who sell into the public sector.

The advice is clear: find new customers so the reliance on the public sector is not so acute, and users may have to put up with a drop in quality.

Consequences
"With a change of government expected later this year, IT suppliers to the public sector need to be prepared to adapt to new market conditions. The public sector has been the life­buoy of UK IT for quite some time, so such a significant cut will have far-reaching consequences," said Tola Sargeant, research director at TechMarketView.
 
"Cuts to IT spending could h ave a significant impact on the delivery of public services in some areas," she added.
 
This is almost certain to be felt in the £12bn National Programme for IT in the NHS, but for those targeting education the hopes are that budgets will remain largely intact.

For the first time in several years those quizzed at the annual BETT educational IT show said they expected education budgets to be cut. However, one education specialist told Micro­Scope that not only was there a question of investing in the future of Britain, but there was a momentum that had built up which would be difficult to stop.

"Interactive whiteboards are in most classrooms and children have started to get used to using technology to learn, so taking that away or scaling it back is not really an option," he said.

TechMarketView agreed that there are going to be areas in which the public sector cannot stop spending.
 
"Numerous high-profile data leaks within the public sector in ­recent years and the government's commitment to make government ICT carbon-neutral by 2012 will make data security and sustainability key priorities over the next few years," said Sargeant.
 
But whatever happens in the General Election, it looks like there is a widespread resignation that public sector cuts have to happen, so resellers will need to quickly identify the ring-fenced projects and development areas while looking for private sector opportunities to offset the cuts.

This was first published in February 2010

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