Reform within austerity: UK public sector ICT overview and forecast to 2016–17

Tuesday 19 February 2013, Amsterdam

Two years into its programme of government the coalition continues to wrestle with economic challenges and is already experiencing its fair share of “events”. Recovery of the economy has not been as sustained or as marked as the government hoped. Government forecasts for growth did not materialized as planned, and instead the economy hit a double-dip recession, which resulted in the chancellor or the exchequer announcing an extension of austerity measures.

The intended reforms of the NHS within the Health and Social Care Bill continue to be opposed by a majority of clinicians and their professional bodies, which has kept the government in an energy-sapping battle of wills with the very doctors they seek to support. The events that triggered the Leveson enquiry into phone hacking and into relations between the press, politicians and civil servants , together with the proceedings of the enquiry itself have exposed the actions of individual ministers and the prime minister himself to forensic scrutiny.  While the coalition remains stable, it is under pressure and the strains between the coalition partners are beginning to tell.  In the circumstances, the coalition’s appetite for headline-grabbing far-reaching reforms is diminished, and for large-scale ICT programmes it is virtually non-existent.

These challenges and pressures have influenced ICT expenditure across the public sector.  In 2011-12 Kable estimates the public sector spent a total of ￡17.2bn on ICT products and services.  Total external spend (including hardware, software, services and telecoms) is valued at ￡14.1bn, which amounts to an 82% share of total expenditure. This is somewhat down on previous estimates, primarily because public sector bodies managed to cut back faster and farther on their spending than they themselves anticipated, and deferred some transformation programmes due to the double-dip recession prolonging the austerity timetable.  Project activity slowed down after the coalition came to power and activity levels have remained relatively lower compared to previous years.