(By Richard Holway) The FT today carries the headline Jobs boom since 1998 ‘fuelled by public sector’. It concludes “The ONS's flagship survey shows that 1.3m of the total jobs created were in health, education, social care and public administration, implying the rate of job creation was twice as fast in the parts of the economy dominated by public sector money than in the rest of the economy”.
Back in 1997, when Labour came to power, the Holway Report at the time showed that 19% of UK SITS spend was from the Public Sector. The dot.com and Y2K booms actually saw that fall to 17% by 2000. But since then, the public sector has certainly been the lifebuoy of the SITS sector. Public Sector spend now accounts for over 30% of all UK SITS spend. See Chart below.
Today we await Alistair Darling’s Pre Budget announcements (it sounds more and more like a real Budget to me). I recently asked John Suffolk (the Governmemt’s CIO) if he thought Public Sector IT spend would benefit from any new spending initiatives. He thought that highly unlikely. Indeed, it might well be cut in favour of other schemes more likely to boost local employment (like building). Afterall further pressure on public sector IT budgets are more than likely to drive more contracts offshore – rather than creating new IT jobs in the UK.
If UK SITS is going to find the Public Sector more difficult, is it likely to get a fillip from the Private Sector? I somehow feel readers could answer that question themselves.
Batten down the hatches.