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The government has surpassed the private sector to become the country’s largest employer of freelance IT specialists.

Over one in four IT contractors in the UK now work in the public sector, according a report by contractor services firm Giant Group.

Since 2003, the government has expanded its lead in freelance IT hires over long-time stalwarts in the telecoms industry, which slumped to fourth place, utilising just 12% of the country’s contractors.

Meanwhile, companies in the financial services sector jumped from third to fourth.

“The public sector has always been the poor relation in terms of its utilisation of temporary IT staff, but efficiency drives and increased scrutiny of major IT projects have persuaded civil servants of the necessity of bringing in private sector expertise,” said Matthew Brown, managing director of Giant Group.

He said the trend looks to continue, as figures show growth in government IT spending are expected to continue to outpace the market.

However, the government may not be on top for long.

As financial services firms look to bolster their security and increase spending on compliance, the report suggested competition with the public sector for talented IT staff could get fierce.

“With the need to control public finances pressing, and the City’s requirements for IT contractors growing, the government could find itself locked into a costly bidding war,” Brown said.

“If key IT personnel are poached by the City, there could be serious consequences for the government’s IT agenda.”

Copyright © 2006, Startups.co.uk

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