This week’s issue of the Economist (April 11th -17th) had some interesting things to say about the state of local governments: “after a binge of bail-outs, lifelines and fiscal stimuli, public borrowing is soaring. And if things look bad in Westminster, pain will be felt in town halls around the country.” With over 75% of their budget stemming from central-government grants no one doubts belts will be tightened sooner rather than later. Indeed, the current economic malaise is making local authorities review their spending and investment plans. Local authorities will also be under ever increasing pressure to deliver on savings especially if their revenue is drying up. Paradoxically, public services from these same authorities will be under even more upward pressure, making ‘value for money’ mean just that.

However, a follow-up article in the same issue of the Economist outlines how local authorities can and have cut costs and still maintain service levels by outsourcing. John Cridland, deputy director-general of the CBI has said that “local authorities deliver better value for money” by bringing in private or third sector providers. That is good news. News that can become great if local authorities understands that that should most definitely include outsourcing and spending on ICT (an area many predict will get the biggest squeeze). ICT spending that can both generate cheaper, better services and create savings in other areas (front and back office shared services for example) should be more widely promoted.

Much of the outlook for local authorities this and coming years, especially for the ICT industry were identified at the March session of the Intellect-Socitm Local Government Supplier Forum. The financial pressure put on local authorities are giving way for rationalisation, efficiency drives, and savings, and a key challenge in 2009 is for the ICT industry to demonstrate that ICT is the main driver for achieving these, or face the axe.

The delivery of ICT needs to be accompanied with an understanding on how to optimise the use of ICT. There is also a need for clarification of what efficiencies and savings ICT can generate. A deeper engagement and collaboration between the ICT industry and local government can help bridge this gap – an engagement Intellect can help facilitate. The ICT industry clearly needs to do its part for both parties’ sake. With a market worth close to £4bn a year and which presents many opportunities for the ICT industry we cannot afford to forget local government and we cannot allow local government to forget ICT.

Technorati Tags: Economy, Local Government

Tags: Economy, Local Government

This entry was posted on Wednesday, April 15th, 2009 at 2:14 pm and is filed under Public Sectors, Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.