UK public IT spending to surge

UK public sector spending on technology will grow by 9 percent a year until 2005, according to a new report from Ovum Holway

The report which is previewed in the Financial Times, notes that the commercial market for software and services will grow just 0.3 per cent a year between 2001 and 2005, a poor showing compared to the buoyant public sector.

In all, Ovum Holway predicts in "The Public Sector 2003" report that the public sector software and IT services market will be worth £7 billion in 2006.

The report from the research firm breaks the UK's public sector market into six segments for analysis: central government, local government, health, education, defence and criminal justice.

The paper notes that the criminal justice sector has been tipped as the strongest prospect for companies seeking to sell into the public sector; the criminal justice software and services market is expected to grow by an astonishing 25 per cent on average between 2001 and 2006, while the health market should grow by 20 per cent on average. Spending on software in the education market, meanwhile, is actually expected to decline over the term.

The Ovum Holway report is the latest research to prove the strong trend upward in government business for technology companies in the UK. The Management Consultancies Association, an organisation of the biggest management consulting firms in the UK, said in its annual report that earnings from public sector work for its members rose 53 per cent between 2000 and 2001 to £509 million. Fees from work with the central government alone rose a tidy 73 per cent to £420 million. The association said that public sector work in 2001 represented 13 per cent of total fee income for its members, up from 9 per cent in 2000.

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