The swingeing cuts of Chancellor Osborne’s spending review will be felt by everyone connected with the public sector, including IT contractors. However, the added value and flexibility of freelance IT workers puts them in a strong position.
Flexibility puts freelancers on front foot
John Brazier, managing director of freelance membership organisation PCG, pointed out that since public budgets first came under scrutiny earlier this year the Government has used freelancers more. “It will be some time before we can directly assess the consequences of the review for our members. What we can say with confidence is that the public sector has increasingly engaged freelance workers throughout the UK because of their flexibility, skills and value for money.”
Brazier added that a vital economic fact not to be forgotten in the debate over the CSR is that freelance workers contribute some £21bn in added value to the UK’s GDP every year and can adapt and adjust to changes in the market place. Another freelancers' body, the Freelancer and Contractor Services Association, agreed, saying contract workers appear better placed than their full-time counterparts to navigate the cuts.
Short-term boom for contractors
Contractors could even see a potential increase in demand for their services the short term, according to Thomas Fuller, senior manager in IT effectiveness at Deloitte. “The recruitment freeze means that hiring contractors is the quickest way to acquire hot skills – particularly through agencies. In the long term, I expect their numbers will be minimised: this will be driven by a surplus of jobs and a push to use system integrators where better deals and offshore rates can be acquired.”
In the meantime, advises Fuller, day rates need to be carefully pitched as departments will continue to have to justify every individual contractor. Local government will probably be flexible, he predicts. “Temporary injections of skills and capabilities will remain in demand as local authorities tend not to be able to pay real market rates for permanent jobs.”
Word from local government
Commenting from the coal-face of local government, David Tidey, IT manager of Wandsworth Borough Council and committee member of the BCS, confirms that contractors will continue to play their part. Tidey’s budget will be cut by around 7% per annum in order to achieve cumulative real savings of 30%. However he said the new austerity era would be treated as a time of opportunity by the IT department and contractors would play a key part in providing skills.
At present, around 50% of Wandsworth’s IT crew are contractors, and Tidey reckons the flexibility of contractors would ensure a continued existence, especially for junior contractors. The losers, he predicted, would be the consultancies who put expensive consultants on site and measure them by the bus-load. “A four bus project was considered to be a very good deal in the past by the big management consultants” he said.
New role for IT
Tidey said the key to survival was to position IT not less as a cost base but as a means to add value to the way that councils deliver services. “We have to stop fitting projects around organisations but instead restructure organisations around IT projects that make a real difference.” Additionally, IT analysts, the Gartner Group, has highlighted potential savings to be made through incremental process improvements and standardisation of hardware and software configurations.
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