Are ICT suppliers feeling the Age of Austerity chill?

With the Age of Austerity now well underway and the first twinges of cutback pain being felt, how are the ICT providers to the public sector faring?

The Coalition has made much of the efforts by Francis Maude and the Cabinet Office to rein in existing contracts and the ‘put up or shut up’ approach to securing better deals for the taxpayer.
But are the boom times really over for the public sector providers who have made hay for so long? Or is it a case that the economic imperatives have changed, but there is still money to be made for the canny provider that’s ready to adapt to the changes enforced upon it?

The answer is – life seems to be rosy for the bigger suppliers

Last week Capita, which earns around half its revenues from the public sector, said since the start of the year it has won contracts worth £244 million – nearly a third of the total value of orders booked in 2010 – and is bidding for £4.7 billion of new contracts, compared to £3.7 billion a year ago.

CEO Paul Pindar saw the cuts as a positive sign.

“The need for our public sector clients to achieve substantial cost savings and for private sector clients to increase their efficiency to remain competitive offers significant opportunities for the group going forward.

“There is much more interest in how outsourcing can help save money in central government. What we’re now looking for is implementation. What we’re expecting is a flow of contracts. We’ve given ideas of areas where savings can be made. One of those is travel administration. It’s a great opportunity for the government to save literally hundreds of millions of pounds through procurement.”

Logica is also upbeat about prospects.

CEO Andy Green said recently “The contract win of recent weeks with the Serious Organised Crime Agency (SOCA) in the UK demonstrates our ability to compete successfully on some of the largest deals awarded so far in 2011,” he argued, while Craig Boundy, UK CEO at Logica, said: “It was a very difficult year in the public sector with the build-up to the election and the change of government. But I think the present government is committed to use technology to drive some of the savings.”

These upbeat assessments show that Public Sector ICT spending was unlikely to go away and the mantra is very about about spending better as much as spending less

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