On Monday the Treasury released its plans to save £6.2 billion from the public sector budget. One of the planned measures is to cut £95 million from IT spending, which could affect those working through umbrella companies.
Although everybody realised that public sector budgets were guaranteed to be trimmed down regardless of who won the election, the REC has urged the coalition not to cut critical IT investment projects.
Jeff Brooks from the REC said that IT can help the government function more efficiently and that dropping projects could have the long-term effect of adding costs as opposed to reducing them.
In better news, contractors working in the IT sector should be pleased to hear that mergers and acquisition in the sector increased for the 4th month running. Mergers and acquisitions in IT require more consolidation, rationalisation and integration than in any other sector and as they are of a temporary nature, there is currently an increased demand for skilled contractors.
Although activity is rising, the value of deals is falling but this has been attributed to the large number of acquisitions that took place during the second half of 2009.
During the first quarter of 2010 there were nearly 3 dozen social networking deals and almost 2 dozen cloud computing deals. Another forty of the acquisition deals focussed on applications and content rather than infrastructure.
Advances in mobile technology and innovative ways of presenting information are presenting new opportunities within the technology sector and leading IT companies with large cash flows are currently in the perfect position to do deals.
© 2010 All rights reserved. Reproduction in whole or in part without permission is prohibited.
Image: Self Reflection by Jerry Reynolds
