Budget will increase IT outsourcing spend, say experts

Written by Jessie Richards

Chancellor Alistair Darling's Budget will lead to increased spending on IT outsourcing as public sector organisations and agencies look to reduce expenditure, according to experts.

Georgina O'Toole and Peter Clarke, senior and principal analysts at Ovum, say the £15 billion-a-year efficiency savings demanded by Mr Darling's plans mean that significant back-office and IT cutbacks will be sought.

"There is potential for further outsourcing in some areas of the public sector as departments and agencies look to shift from internal spend to external suppliers in their pursuit of savings," the researchers say.

In particular, police forces and educational establishments are likely to move towards IT outsourcing, as these organisations currently direct a far lower proportion of IT budgets to external suppliers.

Recently, advisory firm Alsbridge said companies can save up to 30 per cent by turning to IT outsourcing, as using an external supplier can free up capital and human resources.