Friday, May 11th, 2012
OVUM COMMENT Kevin Noonan, Research Director

Tuesday’s Federal Budget delivered a significant cut to overall public service staff numbers. This comes on top of funding cuts already announced through the increased efficiency dividend and cuts to capital expenditure. While these cuts will create headaches for both government managers and vendors, there will also be some big opportunities for IT.

Twenty-first century government is a technology intensive business. Cuts to public service budgets and staff numbers will certainly impact information technology. This will come directly through pressure to reduce IT headcount, and indirectly through efficiency pressures on IT support services. But the cuts will not be felt evenly, as some IT managers will be better positioned to weather the storm.

The coming financial year will see a reduction in overall staff numbers by 3,071, and this this has been compounded by a further reduction on this year’s headcount estimates to the tune of more than 1,000 staff. Funding cuts announced in November’s minibudget leave government agencies little room to maneuverer.

In spite of the rhetoric from both sides of politics, the recent announcements represent the first real inroads into government staff growth in more than ten years. The graph below shows neither side of politics can claim in the past to have successfully arrested the growth in public service numbers.

Government IT, in contrast has already had to deal with a series of cuts, particularly through implementation of Gershon’s review into government IT. Government CIOs have already done the hard yards in delivering internal efficiencies. The big challenge for the coming year will be for IT to support a much bigger challenge in delivering agency-wide productivity savings.


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Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. Our research draws upon over 400,000 interviews a year with business and technology, telecoms and sourcing decision-makers, giving Ovum and our clients unparalleled insight not only into business requirements but also the technology that organisations must support. Ovum is an Informa business.
Jennifer Duraisingam
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Tuesday’s Federal Budget delivered a significant cut to overall public service staff numbers.



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