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Budget-slash fest shaves 10% off IT mercenaries' day rates

But RBS tech fiasco may shower COBOL mateys in gold

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Cost-cutting at banks and a squeeze in the public sector have pushed IT contractor day rates in the UK down by £38 since 2010.

Freelancing tech bods are therefore taking home £9,000 a year less than two years ago. But the recent RBS/Natwest banking crash offers a silver lining for developers: those skilled in the ancient ways of COBOL and mainframes are likely to see a few more top gigs heading their way in the next year.

The average daily rate for an IT contract job in the UK is now £375, down 9 per cent from £413 in 2010.

The data comes from IT Jobs Watch, which analysed thousands of contract gigs advertised with a daily rate in the three months to September 2012 and compared the average to the same period in 2011 and 2010.

The pay trim since 2010 works out as an average yearly fall of £9,000 - bringing a typical tech mercenary's salary down from £99,120 to £90,000 for a 48-week year. Day rates tend to lie between £260 and £550. Nine-in-ten gigs were advertised at a daily rate of more than £260; only 10 per cent were more than £550, the numbers showed.

But beyond the statistics, this year's RBS IT meltdown, and a raft of new government regulation on banks, has added a silver lining to the metaphorical clouds over tech contractors. Bean counters in the finance industry may have been responsible for much of the dip in day rates - daily fees in the City of London fell 16 per cent compared to last year - but the sector may fuel an uptick over the next year or two.

Jobs site IT Contractor predicts that COBOL, PL/I and mainframe types may be in luck in 2013: shaken up by the RBS screw-up, bank bosses have peered into their big iron systems and are looking for people who know their ACL from their elbow. The website's bods concluded:

The previous attitude of the banks to these old legacy systems, written as far back as the early 1970s was ‘if it ain’t broke, don’t fix it’. However, the fear now is that if the systems do get ‘broke’ the banks don’t have the skills and knowledge to fix them.

Many of the banks (and any company which processes transactions overnight using legacy systems) will now have to bite the bullet and finally rewrite these systems leading to a greater demand for IT contractors in the financial sector which should cut the numbers of available contractors, which should boost daily rates in the medium term.

All good news for the contract guy. ®

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