Public sector IT body Socitm has estimated that around 1,000 local authority ICT jobs were cut last year.
Speaking at an event today to launch Socitm's IT Trends in Local Public Services 2010/11 report, editor John Serle said the reduction in staff could be attributed to the growth of shared services and outsourcing.
Some 10 per cent of local councils are actively sharing services and the rest are "thinking about it", according to Serle.
There has also been a significant increase in outsourcing. Roger Marshall, the City of London IT chief, said: "We actually see more activity in this area than shared services because the politics of the latter can get in the way. For example, where should a shared datacentre be housed? All parties will want it located nearest themselves."
Searle and Marshall were both fairly sanguine about the job losses.
"There are currently 29,000 people working in an ICT capacity in local government; we have always considered this to be too many," Marshall said.
David Hopkins, an elected member of Milton Keynes Council, argued that the G-Cloud initiative, which was a hot topic last year, looks to have been kicked into the long grass. However, he said that the development of the Public Sector Network (PSN), which would see a WAN shared by local service providers and bodies from the third sector, was alive and well.
"The PSN will deliver what could be described as a Milton Keynes cloud or similar local clouds, but there will not be a central cloud," he said.
Other trends cited in the report include moves towards self service, although this requires surmounting "an initial investment hump", according to Serle.
Similarly, the move towards virtualisation is increasing apace, although green IT is considered less important than it was a few years ago.
The authors of the report were generally positive about the direction of IT, with Serle arguing that during the economic challenges of 2008/09, IT showed that it was able to "do more with less".
The report found that uptake of new technologies is being driven by rising costs in areas such as stationery, travel and salaries.
It also noted that there has been a move towards increased accountability and transparency within government, and argued that the coalition's Big Society agenda could push uptake of the PSN.
One potential area of weakness within local authority IT is that of security, according to Serle, with the cost of dealing with data breaches increasing and compliance with standards cited as a big financial burden.