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£3 Billion To Be Chopped From Annual IT Budget

A report from VMware Claims that the public sector will need to cut £3.6bn from its annual IT budget by 2013 to meet government targets.

The virtualisation giant's Smart Savings Report examined how the government's forthcoming spending review could impact frontline services by polling 100 senior public sector finance officers.

The report predicted budget cuts which equates to a loss of £3.6bn a year.

Two-thirds of respondents said they believe the anticipated budget cuts will impact the frontline, while over half said they have considered making redundancies to make up for the predicted loss of funds.

Georgina O'Toole, research director at analyst TechMarketView, said that while IT budget cuts are understandable, investing in new technologies will also create savings.

"It is understandable that some ICT expenditure has been targeted for cost-cutting," she said. "However, ICT spend should not be considered in isolation. Technology will also be a key enabler for reducing broader operational costs and, in turn, protecting jobs and services."

Mark Newton, UK managing director of VMware, said IT needs to be seen as a "savings enabler" and not just as an expense. "There is a golden opportunity here for major, almost immediate, cost-savings by looking towards IT."

Newton added that the public sector could benefit from embracing cloud technologies. "Public sector organisations must invest in technologies that can deliver savings without compromising on services, while ensuring their agility to adapt to future changes such as shared service provisioning and the G-Cloud programme."

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