Public sector sustains UK software and IT services market

The ID card scheme is set to award deals worth £1bn

The public sector will be one of the few bright spots for software and IT services vendors during 2009, according to research by analysts Pierre Audoin Consultants (PAC) and TechMarketView (TMV).

The study suggests that public sector spending on software and IT services will grow by just 3.7 per cent this year – compared to a forecast of a one per cent drop in overall investment across the UK.

The growth will be driven by outsourcing and shared services programmes, particularly in local government where IT managers face pressure from Whitehall to cut costs while improving public services.

Several large local authorities are planning major outsourcing contracts in the next two years, and contracts worth up to £1bn for the National Identity Scheme due to be awarded this year, said PAC.

"The National Identity Scheme alone is set to drive considerable growth in IT expenditure this year. With other government IT programmes also in the pipeline, PAC expects many suppliers to offset pressure in the commercial segment with an increased focus on public sector opportunities,” said the analyst.