Budget 2010: ICT impact remains unclear

Beyond the confirmation of massive cuts across the public sector, the only real ICT element was the official writing off of the so-called 'broadband tax' proposed by the last Labour administration to fund the Digital Britain Plans. “The previous Government's landline duty is an archaic way of achieving this, hitting 30 million households who happen to have a fixed telephone line,” said Osborne. “I am happy to be able to abolish this new duty before it is even introduced. Instead, we will support private broadband investment, including to rural areas, in part with funding from the Digital Switchover under-spend within the TV Licence Fee.”

 

ICT industry experts were divided in their opinions of the long term impact of the budget. In practice, the budget does not go far enough in recognising this and no doubt our expectations were too much. There was an opportunity for bold statements about the multiplier effect of IT investment, especially in the public sector. It was a time to talk about new models of public/private collaboration using IT to drive public sector productivity and lower costs. It was a time to help the technology industry in the UK to modernise and see beyond the lucrative public sector deals on which some have relied in the past.

 

 “IT remains a critical vehicle for the efficient delivery of services to the public. What we are seeing with the immediate reduction announced in May and the subsequent squeeze in the Budget has been to dramatically transform the IT procurement landscape in the public sector,” commented Andy Burton, Chairman of the Cloud Industry Forum and Chief Executive of Fasthosts.

 

“Whilst these spending cuts may at first seem concerning for public sector IT chiefs and IT suppliers, we are confident that the advance of Cloud computing (the delivery of online, secure, scalable and resilient IT services on a pay-as-you-use basis) will be a tremendous enabler to ensure that required IT solutions can still be implemented but without the significant capital costs associated with the more traditional supply models. 

 

“Local and central government have more technical options available to them today than in years gone by, and as such the thoughtful application of Cloud based services offer a credible and affordable way to save costs and scrutinise the ways in which IT is procured and delivered. There is no doubt that the financial constraints imposed today will give added impetus to the adoption of Cloud based computing services.

 

“The economic and innovation implications that arise as a consequence of the Budget are profound for both private sector businesses and public sector organisations looking to deliver a world-class agile and secure infrastructure without the capital expenditure traditionally required. In a nutshell that means cost-savings and greater efficiency, and that in turn will drive Cloud adoption,” he concluded.

 

Meanwhile Matthew Eatough, CEO of outsourcing provider buyingTeam, said:“Public sector spending has, for some time, been a cause for very real concern and it is little surprise that government has decided to implement a programme of cuts and tax rises.  However, changes to the tax regime need to be strategically focused and intelligently implemented.  The entrepreneurial strength that has for so long defined British industry should be nurtured and protected, and I hope that the balance of cuts versus tax rises will reflect this as we move forward.”

 

Tax changes need to be married to a more overarching review of the way public sector funding is deployed, so that it is more coordinated, more intelligently used and so that it reflects the needs and requirements of the taxpayers and businesses it serves,” he added. “A thorough review of the way the public sector deploys its funding will show that there is considerable efficiency to be found, £25 billion a year at last estimate, which will have a more profound and longer lasting impact on efforts to reduce the deficit than swingeing tax rises and spending cuts on their own.”