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Public Sector ICT Investment To Remain Steady Despite Cuts

Public sector investment in ICT is set to remain steady over the next five years despite government spending cuts, new research has revealed.

Conducted by Kable, the research shows that cost saving efforts and the redesign of many services will offset any spending cuts to other areas.

The UK ICT sector is currently in marginal decline, but Kable reckons this will be reversed to give a slight growth by the end of financial year 2015-16. Total spend for the industry is expected to slip from £17.99 billion for 2010-11 to £17.75 billion in the next financial year, but is set to hit £18.27 billion by 2015-16, an increase of 1.5 per cent.

Kable found that, although the cuts are affecting the spend on custom software, system integration and the associated consultancy and training services, the efforts made to slash operational costs have allowed the public sector to maintain spending on outsourcing and managed services.

The recovery of the industry will be led by health services, Kable said, but defence, criminal justice and transport are expected to lag behind, and Whitehall is expected to be the last to come out of decline.

Kable's research director Stephen Roberts said: "The overriding coalition priority is public service reform and the approach to suppliers has been tough but pragmatic.

"However, even with a clear roadmap, many public bodies lack the capacity for multiple change programmes. The data in this report can help suppliers to get the timing right and to link their offerings to each customer's pace and priorities."