IT spending cuts set to increase says survey

According to a new survey, less than half of public sector organisations have implement planned IT budget cuts.
ComRes surveyed 102 Senior financial officers from the public sector across the UK and found that they have only implemented less than nine percent on average of the planned cuts to IT spend while still needing to trim a further £2.6bn from overall IT spending over the next three years.
The reduction in IT budgets is part of the Comprehensive Spending Review (CSR) which was announced in October. The CSR aims to eliminate the UK structural deficit by 2015 and includes an average 19 percent cut over four-year to departmental budgets and a 7.1 percent cut to Councils’ funding. However, only 55 percent of public sector SFOs say that they are making cuts to IT budget and the survey concluded that the average reduction was around 5.96 percent.  It also reveals that the public sector is struggling to make the budget reductions with around two thirds of those surveyed believe the cuts will be difficult to achieve within the three year period.
Shared services
The survey, commissioned by VMware (NYSE:VMW) and announced at an event the St Stephens Club in Westminster this week, is part of its push to promote shared services as a way of increasing the efficiency of IT and making savings. “We’re seeing a major shift in the way IT is perceived in the public sector,” says Mark Newton, UK MD, VMware.
“This research clearly shows that financial decision makers recognise that smart allocation of IT spending and resources can make a fundamental impact on their organisation. Rather than seeing it as a drain on resources, IT has the power to drive positive organisational change.”
Despite high profile public sector IT failures, the majority of respondents now believe IT is integral to cost cutting efforts (73 percent) with an overwhelming majority (83 percent) of public sector bosses believe IT to be essential to the delivering of shared services.
Virtualised infrastructure
Roger Bearpark, assistant head of ICT at Hillingdon Council, believes technology offers real promise for government services: “Our council administration saw the need for cuts long before the CSR was on the political agenda, but without question we are far better placed to deal with the need to find savings because of a virtualised infrastructure.
Not only can we contribute to the overall cuts by keeping our own costs low, but we can also drive efficiencies throughout the rest of the organisation, and because we have such an agile infrastructure, we can make these changes quickly.”
Hillingdon council is currently working on a project to share services with three other councils that also have their infrastructure virtualised using VMware. “Moving government services to the cloud makes perfect sense; it assists with capacity management during peak periods, avoids duplication, increases security and stability of the system and most of all could save billions in IT costs,” adds Bearpark.