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Federal cuts to public service budgets and staff numbers to impact IT: Ovum

Federal cuts to public service budgets and staff numbers to impact IT: Ovum

Move expected to translate into pressure to reduce IT headcount and efficiency pressures on IT support services

The Federal Budget recently announced significant cuts to public service budgets and staff numbers. While the news was negative on many levels, it came as no surprise to many, with Ovum research director, Kevin Noonan, counting himself among them.

According to Noonan, this decision had been foreshadowed in the mid-year financial estimates, also known as the mini budget, last November, when there were significant cuts to agency running costs and capital budgets.

“This was always going to have some sort of an effect on staff numbers, but the big surprise is where the cuts landed and how government agencies are going to deal with them,” he said.

As for what effect this development may have on government IT, such as headcount and support services, he sees it coming down to two areas.

“One is agency head count, as the more staff you have, the more PC hardware and support services are needed,” Noonan said.

“The second is government programs, because they need more IT applications, services and the like.”

When looking at the budget, Noonan describes it as a “bit of a patchwork of activity,” as on one hand there are big cuts that have "come through and are washing through the system" to create cuts to IT.

On the other hand, he points out that there is “quite a lot of money” in new government programs.

“So the agencies delivering new or changed government programs will still see quite a lot of activity, whereas the agencies that are not involved with that will just have to weather the cuts and deal with it in some way or another,” Noonan said.

While he admits that cuts to agency running costs are going to impact their “ability to support business as usual,” at the same time it pushes them “even faster” to deliver government programs.

As for whether he expects things to get worse before they get better for the budget, Noonan concedes that is something that is “hard to foresee.”

“On the face of it, it is all bad news, because the bottom line is a downward movement in agency dollars,” he said.

As such, Noonan sees it coming down to a question of how the agencies are going to deal with this development, as well as whether they have decided to use technology as part of their way of finding better efficiencies for the agency as a whole, as opposed to simple cuts.


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