Government IT spend hit by decentralisation


17 Aug 2005

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The pace of growth of Irish Government spending on IT in 2005 is expected to dip due to confusion caused by decentralisation, it has been claimed. An IDC spokesman said the average spending growth could halve as civil servants curtail spending due to uncertainty caused by the decentralisation strategy.

IDC Ireland sales manager Keith Gaffney told siliconrepublic.com: “We estimate the [Irish] IT market will be €2.2bn in 2005, with about 25pc of that — some €550m — spent by the Government.”

Gaffney explained every year, Irish Government IT spending increases by about 8pc. However, he warned, this is likely to slow this year in the Irish IT market to between 4pc and 5pc due to confusion over decentralisation. Effectively, he explained, Irish civil servants and IT strategists are unsure what technologies or what quantities of hardware to spend their budgets on due to uncertainty.

While the same uncertainty may have gripped IT spending in 2004, Gaffney said this was buoyed up by a surge in Government IT spending in 2004 driven by a hardware refresh made necessary to replace equipment acquired during the last major spending spree on IT equipment during the Y2K crisis in 1999. “IT equipment is required to be replaced every three to four years and it turned out to be four years. There will be less equipment acquired this year.”

Gaffney explained: “We would think the Government has grown slower this year than last year. As a result of decentralisation, nobody knows what it is doing.”

He explained that lack of knowledge as to where specific Government functions will be located is stymieing planning. “Plans for IT require functions and equipment to be in a certain location, but what location would they be required in?”

Gaffney concluded: “We estimate that Government IT spending will grow between 4pc and 5pc this year compared to 8pc last year.” The confusion surrounding future IT investment in government systems is one more headache for the Department of Finance-based Central Management and Organisation Development, which is overseeing the decentralisation strategy. Recent reports suggest as many as 80pc of Government IT workers have yet to agree to move as part of the decentralisation strategy.

By John Kennedy