Public sector IT growth set to slow

Budgets are set to fall as work moves from back-end infrastructure to front-office projects

Public sector IT chiefs can expect the growth in their budgets to decelerate over the next five years, according to a major new report from public sector research house Kable.

The 110-page report, entitled UK Public Sector Overview to 2012, was unveiled today and predicts that while public sector ICT budgets should continue to grow by around six percent a year until 2009 they will "then decelerate to levels comparable with growth in the overall economy by 2012".

Despite this slower growth the report estimates that overall public sector spending on ICT will still grow from £15.9bn this year to £20.2bn in 2012.

Local government IT chiefs will be the main beneficiary of this increased investment with the growth of their budgets expected to accelerate. In contrast, growth will be defence and central government IT budgets will be "notably weak" , while spending on health and education ICT will increase at a slower rate than the average.

The report also predicted that the focus of public sector ICT investment will shift over the next five years from pursuing back-office efficiencies to improving front-office performance. It concluded that this shift in priorities will "have a more profound effect on structures, processes, targets and accountability than performance improvement in the back office - because success depends on changing both public behaviour and organisational behaviour".

The study comes days after public sector IT body Socitm similarly warned that local councillors needed to improve their understanding of technology if they are to drive successful IT projects that meet citizens' needs.