Consultant Tech V2

IT consultant pay increases 17 per cent

New research shows IT consultants have seen pay increase by 17 per cent in the last year.

New figures from the Association of Technology Staffing Companies Atsco and SkillsMarket reveal that average earnings for IT consultants have now breached the £48,000 barrier.

This compares with the average pay for IT contractors of £41,500 last year.

The increase in pay was put down to the increased demand for staff as IT projects stemming from increased merger and acquisition activity across a number of different areas, in particular in the financial services sector.

Ann Swain, chief executive of Atsco, said: "Demand for consultancy skills has surged on the back of the recent M&A boom. Post-merger integration of IT systems can be a hugely complex task, and companies rarely have the resources to manage the process internally."

She added that many consultancies have embarked on "aggressive recruitment drives" over the last six months as the high levels of new business from mergers and acquisitions increase demand for IT contractors.

"Skills are now in very short supply. Rival consultancies are locked in a bidding war for skills, which is creating a wage spiral," Ms Swain explained.

Despite criticism of public sector IT projects running over budget and claims that government departments are paying excess amounts for IT contractors, the report finds that demand and pay is remaining high.

Commenting on the figures, Stephanie Elliott, managing director of Volt Europe, said: "Volt Europe has seen a substantial increase in the demand for both permanent and contract staff during Q4 2006, continuing the trend from earlier in the year and helped by a buoyant financial services sector.

"We expect to see this upward trend to continue in 2007 as the demand for specific skills eg financial services applications development will remain high and contractor rates also increase due to a diminishing candidate pool and, in some cases, large companies moving out of London while continuing to offer similar rates to attract the best possible candidates."

IT recruitment sees staff flow from public to private

IT recruitment patterns for the coming year will see more staff flowing from the public sector to the private sector, according to new research.

A study by recruitment firm Greythorn reveals that in the early 2000s many IT specialists headed towards the public sector as major government projects - such as the NHS National Programme for IT and the £4 billion Defence Information Infrastructure scheme - got off the ground.

However, criticisms of overspending on the government projects along with integration problems have lead many IT specialists to look back to the private sector, the research reveals.

An IT boom in the industry and financial services has also created a strong demand for IT staff, that has seen many specialists opt for a return to private sector pressures.

Mark Verghese, director of Greythorn, said: "Some of the very largest projects have attracted extremely talented IT specialists from the private sector, because of their high profile and the technical challenges involved.

"However, the bad publicity about overspends has meant that there is now increasing pressure from the government to keep project costs down and that"s likely to mean less interesting work and reduced rates of pay, which in turn will make the whole arena less attractive to the best people."

Further research from SkillsMarket shows demand for demand for IT staff and IT consultants in the private sector is due to rise in the coming year.

A poll of IT recruitment firms found 78 per cent expect demand for IT staff to rise in the coming year.

Major IT development highlighted

A new report has highlighted the major projected developments in the IT world for the coming year, with cost optimisation leading the pack as the key area where CIOs will focus.

The 2007 IT Spending Report from SkillSoft reveals that the coming 12 months will see CIOs finding their budgets growing at a slower speed that in previous years, so the need to optimise returns from spending and IT recruitment is high.

Beyond keeping an eye on the budget, the poll reveals that the main areas of focus over 2007 are set to be virtualisation and business intelligence BI.

The report also highlights that IT spending inflation will rise in the small and medium-sized business sectors and in the media industry. However, spending growth will contract in the consumer products sector in 2007, where the steepest decline is expected.

Within the IT security sector spending will grow, according to the SkillSoft report, but at a reduced rate compared with the last three years.

However, a recent study by Forester forecasts IT security spending to increase at a steady rate over the coming two years.

Bill Nagel, Forester analyst, said: "Security spending in Europe will remain healthy in 2007 among enterprises and SMBs alike, with enterprises leading the charge.

"Nearly 80 per cent of those firms that are already using security software plan to upgrade or add to that software this year. This means that the robust spending on security we"ve seen in the past two years will continue."

IT recruiters warned of Web 2.0 risk

IT recruiters can expect some of their young employees to spend at least three hours a week when at work on Web 2.0 social networking sites such as YouTube, MySpace and other blogging cites, it has been revealed.

A survey conducted by content security specialists Clearswift found that 71 per cent of office workers aged from 18 to 29 years of age used Web 2.0 applications at least a "few times a week" - with 39 per cent admitting they accessed them more than once a day.

Alarmingly, over a quarter 27 per cent of 18 to 29 year old office professionals spend more than three hours a week using Web 2.0 applications at work - although this may be tempered slightly by the news that 42 per cent of those polled use this time to discuss work-related issues.

However, Clearswift"s chief operating officer Ian Bowles has suggested this could also be a cause for concern as security measures might need to be taken in order to prevent company secrets being aired.

Despite this, Mr Bowles does stress that Web 2.0 sites could also prove to be beneficial to businesses.

"It"s clear from the research that organisations need to take a closer look at the social media sites that their employees are using at work to ensure sensitive business issues or information is not being discussed," he said.

"However finding the balance between harnessing so-called Web 2.0 technologies for business benefit and maintaining strong security is key.

"For example, it isn"t difficult to envisage an employee posting unauthorised comments about their organisation"s product or service quality issues on a blog - causing major brand damage - but at the same time, banning all blog access is not the answer as it cuts the organisation off from conversations with partners and customers."

PCG deputy chairman calls for abolition of IR35

The deputy chairman of the Professional Contractors Group PCG has called for the chancellor to abolish the IR35 tax legislation.

Chris Bryce believes that only by simplifying the tax system can Gordon Brown hope to cultivate a workforce suited to provide the "new skills for the new jobs in the decade ahead" which he referred to in his Budget.

This assertion has been made as Mr Bryce predicts that over the next few years an increasing proportion of the workforce will be employed freelance or classed as self employed, and as a result he considers employment status needs to be made clearer and a better defined by legislation.

"The confusion surrounding self employed, contractors and freelance status is the single biggest obstacle to the highly skilled flexible workforce that Mr Brown has said the UK needs," Mr Bryce said.

"Tax measures such as IR35 and the MSC rules arise from the confusion around employment status. With this clarified, the tax system can be simplified, starting with the repeal of IR35. PCG members are frustrated that the government fails to grasp this and instead persists with such hopelessly complex tax measures."

However, Mr Bryce did concede that progress had been made by the chancellor in another area of contention, that of the definition of MSCs.

"It is good to see that the chancellor has produced a more targeted definition of a MSC, so that freelancers using limited companies will clearly not be affected," he confirmed.

"The government has clearly taken into account the outcome of its consultation exercise in this respect."

Stress blights IT consultants

Stress and anxiety are becoming commonplace in the IT workplace, according to a new study.

A poll by OpTier revealed three-quarters of IT mangers face stress about the performance of their applications - with two-thirds left with sleepless nights.

A quarter of IT staff - including IT consultants - reported encountering a long list of physical symptoms of stress, with nausea, ulcers, headaches, migraines, weight gain, nightmares, panic attacks and even one near-death experience all mentioned.

One of the sources of the stress was the poor direction given to IT departments, with complexity of the IT infrastructure and poorly defined goals seen as an underlying source of anxiety.

Dr. Terry A Beehr, professor of psychology at the Central Michigan University, said: "To succeed in this type of job, you need to be a highly resilient personality who can respond to unexpected challenges without letting them get to you.

"This is a classic high-stress job, with low levels of control but high expectations from the organisation."

Stress also derives from the very public nature of IT application failures, which can hit an entire organisation.

The pressure to perform also came as many members of IT teams find themselves called back to work a the drop of a hat to deal with crises, with some respondents to the poll revealing calls to sort problems meant they had to leave anniversaries, birthdays, holiday celebrations, movies, funerals and on one occasion hospital.

Offshore locations "losing cost advantage"

IT contractors "should be wary of PSCs"

IT contractors have been warned to be wary of personal service companies PSC who may wish to take advantage of the confusion surrounding the tax changes expected to be announced in Gordon Brown"s latest budget.

The Chancellor revealed in November last year that he intends to crack down on the tax avoidance schemes for UK contractors offered through Managed Service Companies MSCs.

Inland Revenue is pushing for IT consultants to be classed as employees of their client, rather than as self employed - as they are now.

However, Consultant Technologies" Jake Reinders told IT Contractor that while most of the IT industry stakeholders are concerned about the proposed measures and probably have Budget day "marked in red" in their personal calendars, solicitors and tax accountants "will be smiling as their consulting fees take on stratospheric proportions".

Fees are expected to rise as demand for their services will increase.

Mr Reinders therefore advised IT contractors to consider options other than PSCs, including umbrella companies - at least until the dust has cleared.

"We are not advising that contractors shouldn"t consider the PSC solution at all - it could very well be the perfect vehicle," he said.

"But with limited company registrations at Companies House reaching record highs and rumours of the sudden spike in company registration fees charged by several providers to take advantage of the deluge - not to mention the ever present IR35 concern contractors may be well advised to seek out and utilise a reputable, service orientated umbrella company solution, even if this is only a short term arrangement.

"Once the furore has died down, and clear results from the budget are apparent, contractors will be in a much better position to judge the situation, at which time an informed long term decision can be made," he added.

IT consultant pay rises 17%

IT consultants" pay packets have increased by 17 per cent in the last year, according to new research.

Data from the Association of Technology Staffing Companies ATSCo reveals the average salary for an IT consultant stood at £48,383 in 2006, up from £41,500 in 2005,

The increase in salaries stemmed from greater demand, as growth came from merger and acquisitions, more outsourcing and higher public sector spending.

ATSCo chief executive Ann Swain said: "Consultancies have embarked on aggressive recruitment drives in recent months to cope with the volume of M&A business, but skills are now in very short supply. Rival consultancies are locked in a bidding war for skills, which is creating a wage spiral.

"Consultancies have embarked on aggressive recruitment drives in recent months to cope with the volume of M&A business, but skills are now in very short supply."

She added that the skills shortage was so great that some IT recruitment consultancies have had to turn work away as they cannot provide staff.

Higher demand was also noted for IT consultants in the public sector as firms aim to outsource more IT development to the private sector.

"The primary driver of this growth is the scale and complexity of public sector IT programmes, which cannot be managed in-house, and often involve multiple consultancies working on the same project," Ms Swain said.

"The public sector is putting more emphasis on transferring skills to project teams in-house, but for the smaller public sector agencies, in-house management is unlikely to be a viable option."

Symantec report outlines growing threat of cyber criminals

Symantec"s latest Internet Threat report has highlighted the growing sophistication of cyber criminals in their attempts to coordinate global criminal networks while remaining undetected.

It also found that the nature of the threat is changing, with data theft, data leakage and information theft the chief methods now used by cyber criminals to make money, and all computer users have been urged to take precautions to safeguard against cyber crime.

"As cyber criminals become increasingly malicious, they continue to evolve their attack methods to become more complex and sophisticated in order to prevent detection," confirmed Arthur Wong, senior vice president of Symantec security response and managed services.

"End users, whether consumers or enterprises, need to ensure proper security measures to prevent an attacker from gaining access to their confidential information, causing financial loss, harming valuable customers, or damaging their own reputation."

Some of the more specific findings of Symantec"s report include the revelation that cyber criminals are shifting away from mass-mailing worms towards Trojans, with Trojans now accounting for 45 per cent of the 50 most potent malicious code samples.

Meanwhile, Symantec discovered that Underground Economy Servers were being used by criminals to sell information, including credit cards, personal identification numbers Pins and e-mail address lists.

Dan Lohrmann, chief information security officer for the state of Michigan, believes the Symantec report is vital for fighting cyber crime.

"Symantec"s Internet Security Threat Report gives our organization a detailed analysis of worldwide Internet threats, helping us monitor security risks and adjust our technology and protection processes accordingly," he said.

"The report"s comprehensive data on the global threat landscape complements our departments security operations."

SMEs lead IT recruitment

Small and medium-sized businesses are increasingly offering opportunities for IT contractors as they up their IT spending to improve business, according to new research.

Data from the Office for National Statistics ONS reveal that the number of small firms with their own websites has risen from 54 per cent to 66 per cent over the last 12 months.

The report stated: "Among businesses in the UK, the pattern in ICT use has changed in recent years. The fastest growth in ICT use has been among smaller businesses, as they have caught up with the progress made by larger companies in the 1990s, though a gap remains."

As well as marketing themselves via websites, Britain"s small businesses are also using the web for sales operations, with growth in this area up eight per cent as sales over the internet rose from £66 billion in 2004 to £103 billion in 2005.

Within firms, IT projects to bring greater efficiency are also becoming more popular, showing the number of different areas open to IT contractors in the UK.

The ONS figures also reveal that ICT business investment more than doubled between 1992 and 2004.

However, the figures additionally show that one-third of UK business ICT systems were infected by a virus or other disruptive software in 2005.

ICT use in the UK is currently above the EU average and the country has the second highest proportion of businesses receiving orders through any form of ICT in the EU after Denmark.

IT public sector growth rate "to slow in next 5 years"

Bosses in the IT public sector have been warned that although their budgets will continue to expand in the next five years, the rate of growth will decline significantly.

Public sector research company Kable has released a 110-page report which claims that public sector IT budgets will increase by around six per cent per annum until 2009, but will then fall back to levels of growth consistent with that of growth of the UK economy as a whole by 2012.

The UK Public Sector Overview to 2012 estimates that this will translate into an overall public sector IT budgetary increase from £15.9 billion in 2007 to £20.2 billion in 2012.

Biggest budgetary increases will be secured by the local government, with the rate of growth set to increase over each of the next five years, while the justice ICT sector will also buck the trend, with double digit expansion predicted from 2008 to 2010.

However, the worst hit financially will be the defence and central government ICT sectors, while health and education departments will also see lower budgetary growth than average.

It is expected that the increased budgets will be spent on improving efficiency - although emphasis will be shifted in comparison with previous years, when efficiency drives were centred on back-office performance.

Front-office efficiency is expected to be targeted in the future, though, with the report stating that this will "have a more profound effect on structures, processes, targets and accountability than performance improvement in the back office - because success depends on changing both public behaviour and organisational behaviour".

Four out of ten CIOs see IT functions lacking agility

Capgemini"s CIO survey 2007 reveals that 38 per cent of CIOs feel business IT does not provide necessary agility and 29 per cent claim IT functions cannot keep track of the changing business environment.

The poll of 300 CIOs with average annual budgets of over 100 million revealed the space available for IT contractors that have the ability to offer the necessary agility.

The need for IT contractors and departments to be readily flexible is heightened as the poll reveals that 97 per cent of firms have experienced major changes to their business environment over the last three years.

A total of 97 per cent of CIOs say that partnering business and IT functions is critical for IT agility where the firm can take a proactive approach to new business conditions and 93 per cent said that IT agility created business value.

However, current management practices were found to stand against IT agility in many cases.

The role of IT contractors is important in maintaining agility as employee attitudes were seen as a much more important element to creating agility than new processes or systems.

Gilles Camoin, Capgemini Consulting global leader of the business & information strategy practice, said: "IT agility enables business freedom. Whilst many CIOs have built an IT function that can work with the business to adapt to a fast changing business environment, a significant number are worried they cannot keep up.

"People are the primary enabler for change and a key source of competitive advantage. However, although most recognise people are the most important function, they are not making enough effort to foster an agile mindset."

He added: "In order to remain competitive in this environment, firms must approach change proactively. By changing their philosophy to one based on customer intimacy and focusing on becoming responsive to external drivers, businesses will become more agile and able to respond to other external change. Those that take control of change will create sustainable competitiveness and those that resist will be forced into change at great expense."

Companies lack BI skills

Companies are lacking cohesive business intelligence BI strategies, according to new research.

A study by Gartner highlights the opportunities that exist for IT contractors with BI skill sets, as firms increasingly look to create coordinated BI strategies.

Currently most firms spend over 70 percent of their time, energy and money that they invest in BI in resolving people, process and governance issues, rather than supporting the technology, the Gartner research revealed.

Betsy Burton, vice president and distinguished analyst at Gartner, said: "Due to a lack of a cohesive strategy, many organisations have created multiple, uncoordinated and tactical BI implementations, which has resulted in silos of technology, skills, processes and people.

"This organisational ceiling limits business and management from achieving business goals and leaves IT people and architects wary of supporting BI efforts. It is not only important to understand why these disconnections happen and the negative impact they can have on realising the value and benefit of BI, but that they can also increase the total cost of ownership of BI for the whole organisation."

An area of growth in IT recruitment is expected to come from Business Intelligence Competency Centres BICC, which the report recommends to firms to aid BI strategies.

In the creation of a BICC, Gartner advises firms to bring together representatives from across a company under someone at the senior executive level. It also advises investments in BI to be measured not only on a return on the investment front, but also from the strategic benefits it gives to an organisation.

EU IT sector "to grow by 2.9% in 2007"

The European Information and Communication Technology ICT sector will experience growth of 2.9 per cent in 2007, according to the European Information and Technology Observatory EITO.

This would value the market at £457 billion at the end of the year.

What"s more, the EITO predicts that this growth rate will remain constant throughout 2008, which would take the sector"s value up to £470 billion.

The claims were made in EITO"s annual report on the European ICT industry.

"The European ICT industry continues to grow steadily, with IT services, software applications and broadband data services as the main drivers," confirmed Bruno Lamborghini, the Chairman of EITO.

"The EITO 2007 Report has confirmed that Europe has entered a new ICT investment cycle encouraged by stronger than expected economic recovery, EU enlargement, the booming Asian markets and new technological opportunities."

Closer analysis of the ICT sector shows that the software and IT services divisions are doing particularly well, with growth of 6.5 and 5.5 per cent respectively.

Moreover, demand for outsourcing, consulting and system integrations also remains high, while the previously stunted hardware market is experiencing a reversal in fortune, with 1.7 per cent growth expected this year and 2.2 per cent in 2008.

The market for desktop PCs is bucking the trend though, as it is contracting rather than experiencing growth.

However, while Mr Lamborghini is generally pleased with the ICT sector"s progress, he believes that the EU needs to be vigilant to ensure that growth is continuous.

"The European Union has to face the global challenge," he said.

"This can be achieved by exploiting the many strategic assets, such as the EU"s advanced communications infrastructures and services, as well as the world"s largest market for education, comprising close to half a billion people."

IT contracting sector "will have disappeared by 2025"

A thought leadership debate hosted by the British Computer Society BCS at the Royal Society in London has concluded that the UK IT contracting sector will have disappeared by 2025.

The event was attended by 40 guests, and the general feeling was that the current generation of IT professionals will be the last.

This is because it is expected that by 2025, the IT sector will no longer stand on its own but will have been integrated into other business sectors as they become more heavily reliant on computer technology.

It was also noted that young people do not see IT as an attractive career alternative, and are choosing other degree options instead.

Some have gone as far as suggesting that the IT sector is losing a propaganda war as other degree programmes are poaching the most suitable candidates.

However, John Leighfield, from Research Machines, emphasised that the City of London provided the IT sector with an excellent base from which to work, and the slide could be arrested through co-operation with universities, the government, and other businesses.

"The City of London is a shining example of a British industry leading the world," the BCS reports him as saying.

"Business people from many other countries come to the square mile to learn from the way it works. Added to this in the UK we have some of the best universities in Europe, perhaps the world."

Mr Leighfield suggested that business partnerships with schools and universities that would teach students IT skills from a business perspective would help the UK stay competitive in the global IT market.

IT recruiters face skills shortage

Skills shortages are the biggest issue facing IT recruitment companies in 2007, new research has revealed.

Software firm Skillsmarket has found that demand for IT staff is set to rise in the next 12 months with 78 per cent of managing directors and directors of the UK"s biggest recruitment companies expecting demand for staff to increase.

The pressure to find staff with the right skills set is leading demand for IT contractors to rise as well, especially as British IT graduate numbers fall.

David Clarke, chief executive of the British Computer Society said: "Amazingly the number of IT graduates entering the UK job market has fallen in recent years and more and more of these valuable places have been taken up by overseas students that are expected to leave the UK when they finish their studies.

"This is doing nothing to help the skills shortage."

Ann Swain, chief executive of the Association of Technology Staffing Companies ATSCo added: "With supply outstripped by demand, IT recruiters are becoming much more inventive when it comes to sourcing candidates, especially as the best candidates no longer respond to advertising.

"Many of the UK"s leading recruitment companies have already built up large databases of CVs and with fewer candidates approaching them, this information is turning into gold dust. It is vital that recruitment companies invest in keeping this information up-to-date."

It is estimated that between seven and ten per cent of the information held on recruitment companies" databases is up-to-date.

EU initiative to encourage women into IT contracting sector

The EU has launched an initiative to encourage more women to work in the IT contracting sector.

With the sector struggling to cope with a skills shortage coupled with increased demand, a boost in the number of women working in IT would be welcome.

However, the percentage of women IT graduates in Europe compared to men is falling - in contrast to the rest of the world - although there are some regional differences.

"Getting more women into ICT careers would be a force for change and a major boost for this key economic sector in Europe," said EU commissioner for information society and media Viviane Reding.

"With Europe facing a skills shortage in this sector, we must encourage more women to study ICT subjects and to take up a career in this field, so as to increase capacity of the workforce and to tap into women"s creative potential."

The gap between jobs and qualified candidates is expected to reach 300,000 by 2010.

As part of the EU initiative to increase the number of women in the sector, six women shadowed a female IT professional for a day, and each made video diaries of their experiences.

The premise of the task was supported by BT, Cisco, Infineon, Motorola and Nokia.

Just 22 per cent of European IT graduates were women in 2006, a fall of three per cent from 1998 levels.

By contrast, 38 per cent of IT graduates in Korea are female.

The IT sector earns Europe around 5.3 per cent of its GDP.

Malware increases 172%

Malware detections rose 172 per cent in 2006, highlighting the increasing need for IT contractors with a security skills base.

The study by PandaLabs reveals that most malware infections are not coming from single viruses - as they have in the past - but from multiple variants of existing viruses that have been evolved into new forms.

The rise of fusions between worms or Trojans and rootkits was also noted making identification and taxonomy of new threats harder.

PandaLabs technical director Luis Corrons said: "The users have a false sense of security, believing there are no dangerous threats. The truth is, however, that there is now more malware than ever. PandaLabs detected the same amount of malware last year as in the previous fifteen years combined."

Spyware and adware over 2006 was increasingly spreading by being concealed as part of legitimate programmes, and the rise of the cyber-crooks was also noted.

The report states: "The motivation of cyber-crooks during 2006 was once again financial. In this sense, the sale of malware online flourished last year. It is now possible on the internet to buy any number of malicious tools, from kits for creating phishing web pages to vulnerability exploits or services for creating Trojans. This black market is now said to be worth more than the entire anti-malware industry."

The new levels of attacks - through P2P networks or concealed on normal downloads, highlights the premiums that those IT contractors with knowledge of security can garner.

Tories pledge more open source IT contractor options

The Conservative party has pledged to use more open source software OSS for IT projects - highlighting the growth in demand for IT contractors in this field.

Addressing the Royal Society of Arts, shadow chancellor George Osborne explained that the state could save five per cent of its annual IT bill, or £600 million, it there was a switch to OSS.

He highlighted a number of areas where OSS was saving money, including the Japanese government switching its payroll system to OSS and the Spanish region of Extremadura saving £10 million by migrating 70,000 desktops and 400 servers.

There were also calls for open source firms to be allowed to bid for government projects.

He said: "The government"s entire approach needs to be overhauled.

Not a single open source company is included in Catalyst, the Government"s list of approved IT suppliers. As it stands, too many companies are frozen out of government IT contracts, stifling competition and driving up costs.
He added: "Looking at the litany of IT projects that have collapsed or spiralled over budget, it"s clear too that this has meant billions of pounds wasted and public service reform being hampered."

However, critics of the Tory rebranding as the open source party have pointed out that whether open source or Microsoft-based projects are being entered into the need for IT developers and IT contractors will remain.

New legislation "opening up" IT contractor sector

New government legislation is ensuring older professionals are being given greater opportunities in the IT contractor sector, according to reports.

Recruitment experts say that job prospects for older workers are even improving for those hoping to work in the City - which is traditionally dominated by younger professionals.

The Employment Equality Age Regulations, introduced by the government in October last year, is forcing employers in the IT sector to become less age-discriminatory in their conscription process, according to S&H Consulting, which recruits staff for key jobs in the financial services, consultancy and technology vendor sectors.

"We recently placed a contractor who had just taken early retirement into a post with an investment bank - historically a younger person"s arena," S&H managing director Alan Summers told Computer World UK.

"He was an ex-chief executive of a leading software supplier."

As proof of IT firms" newfound willingness to hire older workers, the man in question now works full time at the bank as a relationship manager liaising with trading platforms suppliers.

However, Mr Summers believes that the phenomenon could also be explained by a skills shortage in certain sectors which is forcing firms to hire older contractors.

"There are certain skills sets which are in such high demand that employers are having to become much more flexible. It"s the skillsets that matter, not the age - which is in the very spirit of the new legislation." he said.

"It"s difficult to say if its an increasing trend, but certainly theres a willingness among employers to do that if people have the experience," S&H director Charles Rustin confirmed in the same publication.

IT skills study highlights lack of depth in recruitment pool

A survey conducted by the European Union has revealed that an alarming proportion of men and women lack even the most basic of IT skills.

However, this is likely to increase the prospect of recruitment for those with IT skills as there appears to be a shortage of competition, and also boost in demand for IT firms.

Eurostat, the Statistical Office of the European Communities, found that around 40 per cent of women and 30 per cent of men in the UK were unable to carry out "basic" IT tasks.

These tasks included copy and pasting and moving files.

The results were released on International Women"s day in an attempt to highlight the skills gap between men and women in the IT sector.

Worryingly, the study showed that both men and women were short on IT skills, although the gender gap was still pronounced.

Participants in the study - who varied in age from 16 to 74 - were rated on their abilities perform six tasks.

Those who could complete five out of six tasks were ranked at a "high level", while those who were unable to perform any were classed as having no skills at all.

In the EU as a whole, 29 per cent of men and 15 per cent of women were deemed to be of a "high level", while 38 per cent of men and 44 per cent of women were found to have no IT knowledge.

Encouragingly, the UK had fewer people with no computer skills than the European average, although it still lagged behind Denmark, the most computer-literate nation in Europe.

Public sector pays double for IT contractors

New research reveals that the public sector is paying twice the market rate for IT contractors.

Research reveals outsourcing companies on the top of the supply chain are charging as much as £2,000 a day for IT contractors, which are sourced from IT recruitment companies at rates of £700 a day.

Jon Butterfield, managing director of ReThink Recruitment, which carried out the research, said: "The public sector has made huge strides in improving the efficiency of IT project delivery, but one of the drawbacks when project management is outsourced to external consultants is that it can be harder for the public sector to control staffing costs."

He explained that each layer of the supply chain created an extra mark-up so the cost of IT contractors balloons.

"The outsourcing provider sitting at the top of the contractual chain may have several tiers of suppliers feeding skills into it," Mr Butterfield said.

"As these skills are pushed up the chain each supplier adds a mark up, so that the final rate the outsourcing provider bills the client is often several times the original price of the skill at the bottom of the chain."

It is estimated that the cost of a project or programme manager could shoot up from £750 a day to £1,500 a day, while the cost of an IT director could rocket from £700 to £1,500-£2,000 a day.

Mr Butterfield went on to explain that public sector bodies could reduce costs by sourcing IT contractors direct from recruitment firms, so bringing project management in-house.

NHS looks for new IT contractors

The National Health Service NHS in Britain is reportedly seeking alternative software suppliers, following problems with its extensive IT upgrade project.

The £12 billion project has been dogged by problems and officials are becoming increasingly dissatisfied with preferred IT suppliers iSoft and Cerner.

Under the government plans, the NHS would have a single, fully integrated IT system for England, but glitches and lengthy delays could see the initiative fail as hospital trusts lose faith in the project.

The NHS denied reports that it is looking for a new IT supplier, but officials are understood to be drawing up a list of accredited IT companies for NHS trusts that are now seeking alternative IT suppliers. All businesses on the accredited list will be required to ensure that their products are interoperable with NHS systems.

Under the National Programme for IT NPfIT, trusts were told that the central IT system would be rolled out from the middle of 2004 and delayed purchasing new systems as a result.

The Department of Health has urged trusts to remain with the IT upgrade scheme, but many are now starting to look for systems that they can install quickly and that better suit their needs.

MP Richard Bacon told the Guardian that he welcomed the news that a wider list of suppliers was being made available to trusts, particularly those struggling with the NHS basic patient administration system PAS. He argued that trusts should have freedom of choice when it comes to IT upgrades.

ICAS criticises new government tax plan, attacks IR35

The Institute of Chartered Accountants of Scotland ICAS has cast doubts over the viability of new government proposals to counteract tax avoidance by managed service companies, and has called for the plan"s implementation to be delayed by a year.

It is worried that the new proposals would make the tax system unbearably complicated, and cause a lack of transparency.

ICAS also claims that they are only necessary because of the ineffectiveness of the IR35 intermediaries legislation brought in by the government in 2000.

Despite this, ICAS does admit the general need for measures to crack down on tax avoidance, but makes plain that the government should move to ensure the legislation only targets guilty parties rather than affecting the managed service industry as a whole.

"The Government is entitled to combat employment arrangements that have been designed solely to produce savings in income tax and national insurance contributions," said John Cairns, convener of the ICAS Corporate Tax Sub-Committee.

"However, we are concerned that the proposals may adversely affect existing service companies established for sound commercial reasons with no particular focus on tax savings.

"We are also calling on the government to put off applying the new provisions for a further year, to allow innocent businesses and individual workers time to rearrange their affairs.

"Otherwise, the new rules will penalise those for whom they were not intended."

ICAS detailed its concerns in a written response to a document entitled "Tackling Managed Service Companies", which was released jointly by the Treasury and HM Revenue & Customs.

NHS looks for new IT contractors

The National Health Service NHS in Britain is reportedly seeking alternative software suppliers, following problems with its extensive IT upgrade project.

The £12 billion project has been dogged by problems and officials are becoming increasingly dissatisfied with preferred IT suppliers iSoft and Cerner.

Under the government plans, the NHS would have a single, fully integrated IT system for England, but glitches and lengthy delays could see the initiative fail as hospital trusts lose faith in the project.

The NHS denied reports that it is looking for a new IT supplier, but officials are understood to be drawing up a list of accredited IT companies for NHS trusts that are now seeking alternative IT suppliers. All businesses on the accredited list will be required to ensure that they products are interoperable with NHS systems.

Under the National Programme for IT NPfIT, trusts were told that the central IT system would be rolled out from the middle of 2004 and delayed purchasing new systems as a result.

The Department of Health has urged trusts to remain with the IT upgrade scheme, but many are now starting to look for systems that they can install quickly and that better suit their needs.

MP Richard Bacon told the Guardian that he welcomed the news that a wider list of suppliers was being made available to trusts, particularly those struggling with the NHS basic patient administration system PAS. He argued that trusts should have freedom of choice when it comes to IT upgrades.

Tax law brings wave of new companies

The decision by the Treasury to close a loophole that allows temporary workers to reduce the amount of tax they pay has resulted in thousands of new companies being registered in the UK this year.

Under current regulations, temporary engineers, nurses, builders, IT experts, teachers and other workers can claim tax relief of up to 30 per cent if they receive payment through a "managed service company".

Ahead of changes to the UK tax laws, as many as 200,000 new companies have been registered at around double usual rate, as workers attempt to take advantage of the Treasury loophole, the Financial Times reports.

An estimated 250,000 temporary workers use the current loophole and scheme providers are registering companies on behalf of clients because those that become director of their own company may be able to avoid the clampdown. Under managed service schemes, workers receive a large proportion of their pay in the form of reimbursed expenses and dividends, significantly reducing the amount of tax and national insurance paid.

Professional services firm Deloitte and the Institute of Directors IoD have both warned that the registration of thousands of new firms is likely to reduce the additional revenue of £1 billion over three years that the Treasury is predicting and make it more difficult for tax officials to identify people who should be paying extra.

Plans to boost the disclosure regime powers will not apply to offshore operators or advisers with legal professional privilege, meaning that several loopholes to the regulations still remain, and companies are concerned that the proposed new powers will increase the burden of red tape.

SAP wins government software contract

A new memorandum of understanding MOU has been announced between business software providers SAP and OCGbuying solutions, part of the Office of Government Commerce.

The deal, which came into effect on January 1st 2007, will guarantee all public sector organisations will be given preferential prices for software and services provided by SAP.

It is thought that the contract could save the government around £45 million over the entirety of the three year contract.

SAP has offered savings on individual products across the board, as well as granting an additional discount given the overall contribution the government makes to its sales figures.

The move will also help the government"s transition to shared services as SAP will offer full licence transferability to selected public sector organisations.

"I am delighted that we have established this agreement with SAP UK," announced Derek Rothwell, director of procurement at OGCbuying solutions.

"It means that we can supply software licences to the public sector at prices which offer real value-for-money and in a manner that supports the government"s transformational government agenda. The savings that this MOU delivers can be reinvested into front-line public services, where they will produce visible benefits to the taxpayer."

Simon Etherington, director and general manager of public services and utilities at SAP UK, believes that the agreement will greatly benefit the British public.

"The MOU will enable public service organisations to streamline their business processes easily and effectively to better serve UK citizens and will generate efficiency savings which will fund further service improvement," he said.

IT bosses avoid innovation

More than half of the UK"s IT bosses are reluctant to adopt the latest innovations in the field, it has been revealed, prompting concerns that this may impair the growth of IT recruitment.

A study conducted by Fujitsu Siemens computers found that 61 per cent of chief information officers and IT directors in UK firms are reluctant to invest in new technologies, with 37 per cent of those questioned saying they experienced hesitancy in this situation.

Furthermore, 19 per cent described themselves as adverse to investing in innovations in the field, with the same amount describing themselves as nervous.

Most worryingly, only two per cent said that they were eager to adopt new technologies for their business.

"Corporate IT departments have come a long way over the past 20 years.

"From the back office and into the forefront of an organisation, helping to gain a competitive edge," said Steve Kendall Smith, managing director of Fujitsu Siemens Computers UK.

He joined fellow industry experts in arguing that the ideal solution in overcoming this lack of ambition in the sector is for the industry to continually focus on IT recruitment and employ professionals with the necessary drive and enthusiasm for cutting-edge alternatives and even replacing those IT chiefs who have become too complacent in their roles.

The study also found that 23 per cent of IT directors found convincing the board to invest its money was the greatest challenge when seeking to install new systems, while 19 per cent cited the potential disruption to the running of their business as the principal reason for failing to consistently drive forward their IT departments.

PCG responds to government"s IT sector tax proposals

The organisation which aims to guard the interests of UK freelancers has given its official reaction to the government"s plans to deal with managed service companies MSCs - and it includes criticism of suggested changes to the P35.

The overall verdict reached by the Professional Contractors Group PCG was that the outline of the government"s proposals was acceptable, and that it was only the finer details needed working on.

However, there were three main caveats: firstly, that plans must not be introduced for at least another six months; secondly, that debt transfer propositions must be modified so that workers cannot be held responsible by HM Revenue and Customs for MSC debts; and lastly that further changes to the P35 must be scrapped.

"With these changes, we believe the measure will be workable; without them, it won"t," PCG Chairman David Ramsden revealed.

"We must also express our disappointment that the government has sought to justify this measure with reference to disguised employment, which is totally irrelevant: this is a tax measure and will not extend employment rights to anybody."

This last statement is backed up by the Chancellor"s initial statement in the 2006 pre-budget report, when he announced that the government would be taking action in order to "tackle MSC schemes which are used to avoid paying employed levels of tax".

However, the PCG did say that it was happy the proposed legislation would not affect PAYE Umbrella companies and their expenses policies.

The wording of the definition of a MSC in conjunction with "employment income" in the government report means Umbrellas are exempt from changes.

Mixed fortunes for IT sector workers

Project management roles in the IT sector are being awarded improved contracts as it has emerged that the average hourly rates for the role have increased from £39.92 to £42.39 in the last four weeks - an increase of six per cent.

However, a Contractor UK marketing report found that this was the only job position to see any significant change in the past month, as the ten most common jobs in the industry showed little movement.

At the end of February, the average wage in IT was £30.42, which was almost identical to the £30.49 figure recorded at the end of January.

The volatility of the project management sector has been attributed to the inconsistent, off the cuff nature of the work, while the recent wage rise - an increase of 12 per cent has been recorded in the last 12 months - has been brought about by a surge in demand caused by offshoring.

While project managers are doing well, their 12 per cent wage increase in the last year has been mirrored in reverse for those working as desktop support engineers - with their daily rate decreasing from £164 to £144. This is again down to offshoring - while "skilled" workers such as project managers are kept on by UK firms, others that can be more easily replaced are finding that increased competition is forcing down their value.

"Contractors are recognising the need to climb up the skills ladder as lower skilled jobs are be sent offshore," confirmed Matt Brown, managing director of the giant group, to Contractor UK.

"Contractors at the higher end are benefiting from double digit pay increases, whilst IT workers in support roles are seeing their pay stagnate or even decline."

State of IT outsourcing investigated

The performance of IT outsourcing projects and IT contractors is set to be measured with new research.

HDI, the IT service and support association, is launching the world"s largest IT support customer satisfaction study.

The body is currently enrolling firms to take part in the research - that will take place from April 1st to September 30th.

Rich Hand, HDI executive director of membership, said: "The Customer Satisfaction Index Service has provided to the IT support industry to finally get a definitive answer to the question, "How do customers and users of technical support really feel about the service being provided"

"This study will be extremely valuable to organisations that are striving to make IT and support a strategic advantage in their organisation. The standard measurement we are using will leave no doubt about where we stand as an industry."

Outsourcers and staff - including IT contractors involved in projects - will be assessed on courtesy, technical skills and knowledge, timeliness and quality of the service.

Commenting on the previous research, Gina Montague, technical support centre manager at Dorsey & Whitney, said: "The ability to capture customers" feedback when a ticket is closed is invaluable. I look forward to running monthly reports so I can show off the excellent feedback to management."

The research highlights the growing trend for firms to monitor the performance of outsourced services and those working on them.

Recent studies from HDI revealed that in 2006 57 per cent of IT service organisations outsourced some aspect of their support operations, an increase of nine per cent on 2005, with the area most likely to be outsourced being hardware support.

BT Global Services names single IT contractor agent

BT Global Services has named a single master vendor for its external contractors.

The role of master vendor for external contractor resources for the next five years was given to Manpower and the deal will see BT Global Services consolidating its contractor agency relationships into a single supplier.

The deal will also see Manpower taking on the responsibility for the migration of BT Global Services" current contractor workforce, as well as supplying future contractor workforce requirements in more than 100 countries.

Gary Bullard, president of global business & services at BT Global Services, explained that the move was part of the firm"s move to simplify its supplier base for contractors and mobilise resources to support customer requirements in new and existing areas.

He said: "BT Global services needs access to the best resources - in terms of skills, experience, flexibility and cost.

"Combining this with our own capability and assets, we can provide customers with the best service possible. In addition, we needed to simplify our current supply chain and with Manpower we have found a partner with the global reach and local know-how to help us achieve this quickly."

BT and Manpower have now worked together for 18 years, although the recruitment firm has only worked with BT Global Services in IT contractor recruitment since 2004.

Barbara Beck, Manpower president of Europe, Middle East and Africa, said: "We"re very pleased to extend our relationship with BT. We are confident this approach will deliver a greatly improved service and we are committed to helping BT Global Services deliver the best possible service to their customers."

Western European IT sector "to be worth $406.5bn" as more contracts awarded

The Western European IT sector is set to be worth over 406.5 billion by the end of 2010, according to a new report.

IDC, the IT companies and markets research firm, has predicted that the industry will expand by an annual compound growth rate of around 4.3 per cent between 2006 and 2010 as vertical market firms spend more on contracts to the IT sector.

The software segment is reportedly leading the way, with IT services close behind, although the hardware division is only expected to register weak growth.

The study found that the manufacturing industry is still the greatest earner for IT firms - despite a slight downturn in growth in 2006 - and accounted for 22 per cent of total IT spending.

Elsewhere, sector growth was strong for IT firms in the discrete manufacturing sub-segment, and this is set to continue to 2010 with a 3.9 per cent expansion rate forecast.

The retail sector is also expected to invest heavily in IT in the next four years, with the UK, Spain and Italy the driving forces behind an expected 5.4 per cent increase in spending.

"Western European companies" attitude towards IT spending remains rather cautious," said Nina Bonagura, senior research analyst with IDC"s European Vertical Markets.

"Nonetheless, improved economic conditions, reflected by increased business confidence, are expected to moderately impact IT spending, which appears to be gradually recovering.

"This is especially true for stable and expanding economies such as the UK and Spain, though the overall impact is positive across the whole region."

Public sector organisations - especially the local government and healthcare providers - typically spend the most on IT, while the education sector is seen as the most resistant to the IT sector.

Western European IT sector "to be worth $406.5bn" as more contracts awarded

Super IT professionals needed

A new breed of "super IT" professionals with comprehensive business, leadership, and communication skills to meet the challenges of the 21st century are needed, claims the British Computer Society BCS.

At a Skills Framework for the Information Age SFIA event in London last week, BCS chief professional development consultant Mike Chad explained that IT professionals that were willing to take on new skills would find themselves influencing the strategic direction of companies.

Mr Chad said: "Demand for IT workers has shifted from the basic ability to automate business processes, to those who have a strategic view of the world, and can deliver innovation which transforms the business."

He went on to cite the example of how technology has taken a major role in retail from customer interface to the whole supply chain.

"IT workers must have a professional attitude, and accept full accountability for the consequences of their recommendations. HR departments and senior managers need to respond to this trend by assessing their staff according to nationally agreed standards," Mr Chad added.

"We are seeing IT becoming endemic, in the sense that everybody in business is using it, and needs to understand it. The demand for the IT professional who can build bridges between the business, and the providers of commodity technical skills, has never been greater."

BCS chief executive David Clarke added: "IT has become integral to the success of business in the way that legal and accountancy professionals have over the past 20 years. It is crucial that those working in IT across the numerous disciplines and industries are recognised and developed to professional standards."

Significant savings for businesses which outsource IT infrastructure

Savings of over 25 per cent can be made by firms which choose to outsource IT infrastructure, according to a new report.

There are four main areas in which companies can subcontract IT infrastructure - infrastructure, application development, application support and help desk.

An Impact Research study by Info-Tech Research Group found that outsourcing infrastructure offered the best returns, with savings of 27 per cent.

Meanwhile, 20 per cent can be saved if application development is placed externally; 16 per cent for application support and 13 per cent for sub-contracting the help desk.

Jennifer Colasanti, research consultant with Info-Tech Research Group, believes that outsourcing IT infrastructure is extremely worthwhile, and is something that all companies should consider.

"Every enterprise should evaluate their infrastructure, both server and network, for an outsourcing fit," she said.

"It has the highest average return, low variability of success, and few risks."

However, she also points to the availability of a greater pool of knowledge and the opportunity for management re-structuring as factors which make the case for IT outsourcing even more convincing.

"In a third of the organisations studied, increased IT efficiency was the key motivator for outsourcing," said Ms Colasanti.

"In these instances benefit drivers like access to more expertise, repurposing of employees and the reduction of management overhead and internal training bring greater benefit to the business than cost savings alone."

For the purposes of the investigation, Info-Tech defined outsourcing as "any engagement where a third party has ownership over a deliverable".

Telecoms face shorter IT skills gap

The telecoms sector is half as likely to face IT skills gaps as any other sector, according to new figures from e-skills UK, the Sector Skills Council for IT & Telecoms.

According to the council"s Telecoms Bulletin, one in ten telecoms employers reports a skills gaps among their IT and telecoms professionals and IT users.

This compares with 17 per cent of firms in all sectors reporting IT skills gaps.

The figures highlight the recruitment opportunities that exist for IT contractors and other IT professionals in the telecoms sector and across the economy.

The bulletin also highlights a number of other trends in the telecoms sector for IT staff. It reveals that one third of telecoms company employees are female - compared with 47 per cent across all sectors.

However, the gender imbalance is not as pronounced as in the IT industry as a whole, where only 21 per cent of staff are female.

The south-east is the home to the largest concentration of the telecoms workforce, with 17 per cent of all staff based in the region. Twelve per cent of telecoms staff are located in Scotland.

Telecoms companies were found to have a high number of staff at management, senior or professional positions - a total of 42 per cent, compared with the UK average of 28 per cent and the IT industry"s average of 71 per cent.

Average earning in the telecoms sector were at £16 an hour, £2 above the national average of £14 an hour.

BA in IT recruitment push

British Airways is to launch a new IT recruitment programme as it looks to expand its IT staff levels.

The IT Professional Programme will see the airline provide intensive training in IT support, development and delivery and business analysis.

BA"s head of resourcing and skills Bill Francis said: "The new recruitment campaign offers a great opportunity for candidates, who will receive tailor-made training in a cutting-edge environment."

He added: "From leading edge technology such as Linux and web 2.0 to being involved in world class projects such as the development of Heathrow Terminal 5, this is an opportunity that any prospective IT professional cannot afford to miss."

After the initial 18-month training period, those taking part in the scheme will be given permanent roles within BA, at Heathrow or Newcastle.

At first, the IT recruitment drive - the first in six years for British Airways - will take in 20 people.

The scheme will include practical and classroom-based training and will cover topics such as rostering programmes, yield management, website design and check-in processes.

The airline"s move is being seen as a direct response to skills shortages in the IT sector.

Paul Coby, BA chief information officer, explained that the firm needed members of staff who were able to use technology to solve problems in business and public administration.

Earlier this month, the airline reported a fall in operating profit of £47 million to £129 million. Worldwide the firm employs around 50,000 people and it flies approximately 36 million people each year.

GB IT skills fall behind EU

Britons" basic IT skills are falling behind European standards, according to a new report.

At the Microsoft Government Leaders Forum Europe 2007 in Edinburgh, a new study published by IDC revealed that less than 60 per cent of staff have the necessary IT proficiency in the UK.

This compares with staff IT proficiency levels of 80 per cent in Poland, 75 per cent in Portugal and 65 per cent in Romania.

The report also highlighted the problem that future IT skill demands will go "beyond just basic proficiency to advanced and e-business skills".

Speaking at the conference, chancellor of the exchequer Gordon Brown said: "The best economic policy is a good education policy and the challenge today is to move from being above average to being at all times truly world class.

"It is vital because across Britain and the advanced industrial economy, globalisation is creating a crisis of unskilled work. Of 3.4 million unskilled jobs today, by 2020 we will need only 600,000. So unless you have skills you are at risk of being unemployed.

"Highly skilled jobs must and will replace lower skilled jobs. The nine million highly skilled graduate jobs of today must become, by 2020, 14 million: instead of 25 per cent of jobs, 40 per cent of all jobs."

The current UK technology skills gap highlights the difficulty that some firms have in their IT recruitment programmes and the premium that IT contractors with the correct skills set can garner.

MiFID to be new "Wars of the Roses"

With MiFID - the Markets in Financial Instruments Directive - set to come into force in November, its implementation is already being described as "EU"s Wars of the Roses".

A new white paper from EU financial services thinktank JWG-IT Group finds that there are widespread gaps in financial institutions" infrastructure that must be plugged in order to meet key MiFID changes, in particular transaction and trade reporting, customer data management, best execution and record keeping.

JWG-IT director Jitz Desai said: "The EU"s Wars of the Roses have started and we are using the framework in this report to analyse the "known unknowns" which the implementer must monitor to ensure that the job gets done."

David Seacombe, JWG-IT director, outlined the strategy that firms affected by MiFID should take.

He said: "The industry is already behind the game with fewer than 200 work days left, so firms and vendors need to be very careful about where they focus precious resource. Testing of new processes should start within the next two months but it will be very difficult to meet the required timetable, because many small firms still have no access to agreed architectures.

"A lot of the detail needs to get sorted quickly."

MiFID will replace the existing Investment Services Directive ISD. Both aim to set out some basic high-level provisions governing the organisational and conduct of business requirements that should apply to firms and to harmonise certain conditions governing the operation of regulated markets.

However, MiFID takes into account developments in financial services and markets since the ISD was implemented and makes significant changes to the regulatory framework.

One area that will aid MiFID implementation is technology.

Nigel Woodward, director of financial services at Intel, said: "Technology is a key enabler to the financial services industry but also exposes the slower movers to competitive threats.

"Assembling the right combination of vendor capability with new business demand is one of the key challenges of MiFID."

He added that while 2006 was the year of analysis, 2007 should be the year for implementation.

IT recruitment opportunities exist for "astute players"

Key growth opportunities are available to astute players in the IT industry, as the sector heads to a period of innovation and disruption, according to IDC.

IDC"s Directions 2007 conference on March 17th in San Jose, California, will examine how globalisation, convergence, service-oriented architecture, Web 2.0, compliance and other changes to the IT sector are all "conspiring to rapidly change the industry landscape".

Under the pressure of these changes, IT users, investors, vendors and workers are urged to adapt.

IDC chief research officer John Gantz explained that the aim of the conference is to "develop a road map for those traversing the new landscape in search of opportunity" and examine the potential unintended consequences of the new trends that are affecting the industry.

Business strategist Don Tapscott, who is addressing the conference, said: "Technology and social change are propelling us into a new age where people participate in the economy like never before.

"This is changing how goods and services are invented, produced, marketed, and distributed on a global basis."

At the IDC conference, Mr Tapscott will also explain how companies - both the customers and suppliers of IT products and services - can take advantage of the new collective capability to spur innovation, growth, and success.

The changing patterns in the IT industry are creating many new recruitment possibilities in the industry and IT contractors are warned to remain as flexible as possible and keep their skills levels up-to-date so they are not left behind.

IT visas up by third

Foreign workers gaining work permits for the UK in the IT sector rose by a third, new official figures reveal.

Figures obtained under the Freedom of Information Act by the Association of Technology Staffing Companies ATSCo from Work Permits UK show the number of IT workers issued with permits rose 32 per cent to 33,756, reports Silicon.

This figure compares with just 1,827 IT work permits issued in 1995.

A total of 79 per cent of all IT-based visas last year were given to Indian workers.

ATSCo claims the rise in Indian IT recruitment in the UK was due to a process of "onshore offshoring", where companies bring in cheaper labour from India, rather than offshore projects to India.

The body also claims that such workers are being used as a cheaper alternative to UK-based IT contractors and workers, as firms try to cut costs.

Firms recruiting from India, however, claim it is only necessary to look abroad to as Britain is currently facing a skills gap in the industry and there are not enough people to fill the empty positions that they have.

ATSCo chief executive Ann Swain said: "This is being driven by cheap labour costs, not necessarily skills shortages within the UK. The Home Office should vet applications much more thoroughly but it needs additional resources."

She added: "The irony is that while low-skilled IT jobs are being shipped to India, highly skilled Indian IT professionals are coming to the UK to take up managerial roles."

Stale rewards fail to grab high calibre IT staff

Stale and aging reward programmes will make it harder for IT firms to recruit and keep high calibre staff, find a new report.

Analysis from Gartner reveals reward initiatives need to keep employees highly engaged and not solely rely on financial bonuses.

Lily Mok, research director for Gartner, said: "Although monetary rewards are very important, they are no longer the only important reward factor when it comes to developing a compelling employer value proposition.

"Non-monetary rewards, such as career development, recognition, and work/life balance, are increasingly effective in helping to create a more personally rewarding total work experience and contributing to a more engaged and satisfied IT workforce."

The research advises employers to involve staff in the creation of reward packages and identify any cultural changes required to support a new work experience rewards initiative. Managers should also be used as key link to successful initiatives.

The Gartner EXP Quarterly Trending Report also finds that meeting the needs of employers and employees in a rewards scheme that looked beyond plain financial gains was "balancing act".

"Regardless of the difficulty, a thoughtful and rigorous approach to measuring and optimising return-on-investment in work experience reward programmes can help an organisation effectively allocate reward dollars as elements of the total rewards model that are proven to be drivers of performance, employee satisfaction and retention," Ms Mok added.

"This, in turn, can help better enable an organisation to attract, retain and engage desired talent to create value for the company, its customers and shareholders."

Freelancing becoming more popular

Government statistics suggest that more workers than ever are choosing to develop their career by moving into freelancing with IT contractors forming a major tranche of this pattern.

Figures from the government"s Economic and Labour Market Review indicate that from July to September last year, around 40,000 people became self-employed.

Around 3.8 million people in the UK are now working from home as employers recognise the need to give their employees more flexible working conditions.

Working from home often allows people a greater flexibility within their working day and minimises time and money spent traveling across the country.

However, only 39.8 per cent of these people spend a typical week of between 31 and 45 hours on their occupation.

A worrying 32.6 per cent of respondents are pushing themselves harder and working more than 45 hours per week.

Wasted commuter time can be spent with family or in catching up on necessary tasks around the house, adding hours to people"s days.

A recent survey from Kensington Mortgages showed a hopeful outlook from self-employed respondents.

Around 32 per cent were very confident about their job prospects for the coming year and almost half expected that they would increase their annual turnover in 2007.

Few businesses thought they would need to increase their turnover in order to achieve these results, and were cautious about increasing business outgoings.

IT firms fail to cut costs

IT companies are failing to effectively cut costs and are being too hesitant when it comes to imposing essential measures to save them case, a new report suggests.

A study by professional services business KPMG found that profits for many firms are being damaged because of a reluctance to impose tight cost reduction measures.

A total of 79 senior executives from top technology, media and telecoms TMT businesses around the world were polled, with 60 per cent claiming to set cost cutting targets of below three per cent each year.

Despite meagre targets, just 11 per cent of those quizzed said that they had managed to reach or exceed cost cutting targets and over 50 per cent admitted that their processes to reduce costs were inadequate.

Tim Jones, partner at KPMG Advisory, warned: "Executives around the world admit that the more successful a company becomes the more likely it is to lose control of costs. Basically, increased profits and revenues are masking a bloated cost base that could leave a company at risk of hostile takeover."

Lack of ambition and awareness of what drives costs up and profitability down in companies is curbing profits by at least ten per cent each year, with firms advised to look at shifting certain operations to shared services centres and working harder to retain and recruit top talent.

SMEs look outside for IT integration

Small business IT support is increasingly becoming managed externally along with other services, according to new research.

Analysis by market research company Forester finds IT services are being implemented and managed by outside providers over integrating technology in-house, thus highlighting the area where IT contractor demand is set to rise in the coming year.

Over the next five years the report predicts that IT service firms and IT contractors will have to alter they way they work to deal with the shift to outsourcing.

Andrew Parker, vice president at Forrester, said: "The underlying drivers of commoditisation, miniaturisation, industrialisation and globalisation outlined in our report aren"t new, but their convergence will accelerate this market shift and make it stick."

He added: "We"ll see stable operations farmed out to third parties, new IP sourced from open communities and solution brokers, emerging technologies going to market wrapped in process bundles and new software investments based on subscription rather than ownership."

The Emerging IT Ecosystem report also states: "Outsourcing used to be seen as a salve for failing organizations, but now 53 per cent of respondents consider business process outsourcing or IT outsourcing as key to their company"s strategy.

"Even among those who don"t outsource, one in four feel that outsourcing will increase in importance for their business during the next two years."

A shift in where company"s IT strategies are hailing from was also noted. Sixty-three per cent of firms say that IT strategy is now more led by leaders outside the IT organisation than two years ago and 64 per cent of business leaders say they have more control over the direction of IT in their companies than two years ago.

Demand for IT contractors high

A skills gap in the ICT services sector is leading to a growing demand for IT contractors in the UK, according to a new report by the Sector Skills Council for IT and Telecoms.

The e-skills UK survey found that one fifth of companies in the country"s IT industry are suffering from a shortage of skilled contractors, which is having a negative impact on both their IT departments and their end users.

As a result the demand for IT contractors is growing fast as companies seek talented individuals to help them compete in what is an increasingly competitive global market.

It is believed that the skills shortage in the UK IT sector is caused by a decline in the number of young people choosing to study technology-related subjects.

Those who do are therefore in high demand across the whole of the IT industry. Indeed the e-skills report reveals that IT contractors are more than twice as likely to be employed by a business that specialises in IT than they are by an organisation that focuses on telecoms.

Medium to large ICT services businesses are particularly in need of skilled IT contractors, the report shows. Such companies are now the largest providers of employment opportunities for IT professionals because they have the largest skills gaps.

And Northern Ireland is also seeing increasing demand for IT contractors, with over a quarter of businesses saying they have employees who lack the everyday IT skills necessary to carry out their jobs successfully.

Scottish Executive gives £1m technology support

The Scottish Executive has awarded almost £1 million to a total of 19 research and development projects.

Designed to boost the fortunes of new and existing businesses with fewer than 50 employees, the awards have been granted under the Smart Scotland programme and should increase IT recruitment to smaller firms in the country.

The funding, totalling £950,000, rewards innovation and is intended to improve the competitiveness of recipients by enabling them to develop hi-tech new products or commercial processes.

Deputy enterprise minister, Allan Wilson, said: "Innovation is critical to Scotland"s ability to compete in an increasingly global market and it is vital that our small companies have access to meaningful research and development resources to bring innovative products and services to the marketplace."

Companies receiving awards under the Smart Scotland programme include, Codestuff in West Lothian, a firm working on CCTV breakthrough technology, AIMS of South Queensferry, which is producing a new digital subscriber line access multiplexer DSLAM simulator, and Calscience International, conducting an analysis of a plant extract to determine its potential as a therapeutic intervention.

Also included in the latest round of Smart Scotland funding are Dundee-based Dynamo Games, which received funding to work on a new Connected Content Update system for mobile phone games, Frances Flood in Glasgow, for a new enterprise productivity suite, and Stirling-based Funky Moves, currently working on a low power wireless communication platform.

There are three rounds of judging each year for Smart Scotland awards, with application closing dates in January, May and September. The Scottish Executive meets 75 per cent of project costs for businesses with the maximum award payable set at £50,000.

IT skills shortage threatens industry

A fall in the number of students choosing to study IT could cause a major shortage of skilled graduates in the coming years and affect the competitiveness of the UK IT industry, according to a new report.

Research by the Engineering and Physical Sciences Research Council EPSRC reveals that there has been a 40 per cent fall in the number of students commencing higher education computing courses since 2001.

However, the demand for demand for graduates in computing has remained strong.

The report states: "The worlds of ICT, and the career opportunities in ICT, have expanded enormously over the years as ICT has become in many cases the "nervous system" of enterprises, government and social systems."

Areas of the economy that could be affected by the fall in the number of IT graduates include the rapidly expanding finance and media sectors. Furthermore the added competition of IT staff, the public sector is predicted to unable to compete with those areas where pay can be higher.

Responding to the report, Professor Nigel Shadbolt, president of the British Computer Society, said: "We welcome this report which yet again shows Britain"s strength in international computing research.

"It also highlights that the future of this important field is in doubt unless current trends are reversed. Dramatically fewer students are choosing to study computing which threatens the research community, the IT industry and wider economic and social goals."

He added: "We want policy makers, industry and academia to work together to understand and find a solution to the problem."

Staff demand strong in January

New research has found that the demand for jobs among employers remained strong across the UK in January.

Figures released by KPMG have revealed that there remains a buoyant labour market and this has been backed up by recent figures from the IT sector, with IT jobs driving this growth. Demand for IT professionals has grown substantially in recent months and this was reflected in KPMG"s survey, with employers taking demand for staff to a 27-month high.

It is anticipated that this demand for staff will soon translate into higher wages for employees, with IT contractors being one area set to see the benefit. Recent studies in the IT sector have reported that wages are likely to rise over the course of 2007 for IT contractors and that appears to be backed up by the KPMG report.

Michael Carter, people services partner at KPMG, commented: "With wage inflation at the top of the Monetary Policy Committee"s worry list, settlements will be watched closely over the next few months to see if these pressures are translating into pay increases more generally."

Marcia Roberts, chief executive officer at the Recruitment and Employment Confederation REC, added: "The continued demand for staff once again highlights the important role that temporary workers have to play in helping employers fill vital gaps in their workforce."

KPMG"s study also suggested that the skills gap narrowed somewhat during January, because although the availability of candidates for both permanent and temporary roles continued to decline, this occurred at a slower rate than in previous months.

HMRC survey nears completion

A survey of HM Revenue and Customs HMRC is nearing its final stages, meaning it is the last opportunity for IT contractors to register their views.

The Professional Contractors Group PCG has been carrying out the survey, which is now due to close at 17:00 on Monday February 12th, giving IT contractors only a few days more to show their opinions on the performance of the revenue and customs organisation.

Among the issues being considered by the PCG study is IR35 and the way in which tax inspections are conducted, along with the reforms currently taking place within the HMRC. The PCG has carried out the research in order to highlight areas of concern among the contractor sector and believes that the results will provide the government with plenty of food for thought.

Chief executive at the PCG, John Thomas, commented: "We have repeatedly warned HMRC not to underestimate the difficulties it faces in regaining the trust of small businesses in the UK."

He went on: "With this survey we aim to quantify exactly how the freelance community views the tax authority and what can be done to remedy the problems."

IT contractors will no doubt be eager to discover the final results of the survey when they are published and will also be hoping that the HMRC takes note of some areas likely to be raised. The issue of IR35 is likely to be one area of interest and the outcome of the survey is expected to reflect views on this and on the recent changes to the tax regime announced by chancellor Gordon Brown in his pre-Budget report last November.

IT jobs set to soar

The UK is set to see a major increase in the availability of IT jobs in the country, with a number of new developments set to take place in the near future.

2007 is likely to result in a boom in the IT sector in the UK, as firms begin to recognise the importance of implementing an IT infrastructure within their operations. A new report from the Chartered Institute of Personnel and Development CIPD, in conjunction with the Cranfield School of Management, has revealed that an integrated IT infrastructure can significantly improve the running of human resources departments.

The opportunity for IT contractors to help develop such integrated IT strategies within companies are set to grow over the course of 2007, with more companies looking to develop an improved approach to their operations. CIPD"s research shows that IT jobs are likely to be an important consideration for large companies during 2007.

Meanwhile, another development means IT contractors are likely to be in hot demand across the UK and the whole of Europe over the course of the year. It has been announced that several European mobile operators, including France Telecom, Deutsche Telekom and Vodafone, are planning to develop a mobile search system.

The companies are hoping that the development will rival the likes of Google and Yahoo and the move demonstrates the increasing prevalence of IT initiatives currently underway across Europe. With increasingly innovative projects being set up, the demand for IT contractors looks set to continue to grow over the coming 12 months and beyond.

IT jobs set for strong wages

Wages in the IT sector are set to increase over 2007 as the skills shortage continues to bite in the industry.

According to figures from a new study, the demand for IT contractors will increase, but with a lack of skilled workers able to carry out the jobs, wages will be pushed higher.

Computer Economics has carried out a survey which found that the active IT market means there will be a great demand for IT professionals. However, the skills gap means there will not be enough IT contractors to fill the jobs, pushing up the amount that many contractors will be able to charge for their services.

"As one might expect, IT salary trends have closely mirrored IT staffing trends over the past several years," explained the report.

Computer Economics also suggested that there would be an increase in the number of IT professionals changing jobs to find a better deal during the course of 2007.

Senior management IT jobs and technicians are areas in which the largest wage increases can be expected, according to the research, because these are the areas in which the IT skills gap is currently most acute.

The government is working with the IT sector in an effort to tackle the skills gap and bring more young IT professionals through the education system, but until such efforts begin to bear fruit, IT contractors are likely to see their wages continue to increase.

It was revealed in January that IT recruitment over the internet is becoming more popular, demonstrating the increasing availability of IT jobs in the UK market.

IT jobs set for Wales

The IT jobs sector in Wales could be set to enjoy a massive boost if plans under consideration by Oracle are put into practice.

The computing giant is understood to be considering rolling out a major IT integration scheme that could revolutionise the use of digital technology and considers Wales to be a perfect fit for its plans. That is because the country has a relatively small population, but thanks to an aggressive broadband campaign it already has the necessary infrastructure in place on which to build the technology.

According to the Western Mail, Oracle believes that Wales would be an ideal place to test out its plans for an integrated IT approach that would bring together the principality"s public sector databases and computer systems under one umbrella to improve their efficiency.

Such a move would have a significant impact on the IT jobs market in Wales, as it could substantially increase the demand for IT contractors and professionals to maintain the work carried out by Oracle.

Steve Killoran, senior director of Oracle Wales, explained: "To meet its full potential, Wales needs widespread collaboration between authorities across its length and breadth."

He added that Oracle is keen to implement such a system, adding: "Quite simply, Wales has everything going for it - its vision, its policy, and a history of IT innovation. That"s why Oracle believes we can make a difference."

Public sector officials and IT industry representatives have already met to look at the future of the IT sector in Wales and its future, with the Oracle concept at the forefront of their thinking.

Eastern Europe threatens UK IT jobs

UK IT jobs are under threat as a direct result of nearshoring to Eastern Europe, a report claims.

Outsourcing operations to Eastern Europe can significantly reduce costs for businesses and fill skills gaps, while offering a low-risk location for investment, a new study reveals.

Research by management consultancy McKinsey shows that cities such as Moscow, Krakow and Chisinau are becoming centres of software outsourcing, with over 130,000 jobs expected to offshore to Eastern Europe by the end of 2008.

Companies such as Deutsche Bank, Cable & Wireless are creating large nearshore facilities in Eastern Europe, particularly for CRM customer relationship management, drawn by strong levels of technical skills and similar systems in place to Western Europe, according to Computer Weekly.

The offshoring, or nearshoring, trend is growing as companies find that eastern Europe offers a short distance to travel by plane to locations, a small time difference, low wage inflation and high levels of graduates with computer and programming skills.

Former Eastern bloc countries, such as Russia and Poland, reportedly offer companies a fairly close cultural and geographical fit and are likely to remain competitive for the next 15 years, with reliable existing infrastructure providing blue chip companies with low cost IT options.

Countries that have joined the European Union since May 2004 are increasingly becoming popular places for companies to outsource their operations.

It was reported recently that European firms are increasingly looking to boost their IT spending, meaning that the IT jobs market within Europe is now in a strong position.

TfL agrees temporary IT outsourcing deal

Transport for London TfL has announced that it has agreed a new temporary IT outsourcing deal following payment disputes.

The London transport organisation negotiated an early release from desktop services contract with provider LogicaCMG following payment and service level agreements problems.

An interim desktop outsourcing deal has been agreed with CSC on a temporary basis for the management of core desktop services, such as security and licensing support, VNUNet.com reports.

TfL expects the temporary agreement to last around a year and the company will start tendering for a replacement contractor within the next few months.

The multi-million pound TfL contract with LogicaCMG ended last month after the company failed to meet service level agreements. Experts have suggested that the boundaries of the deal had not been properly established, leading to problems further down the line.

TfL and LogicaCMG will continue to work together on a range of other outsourced functions, despite the decision to end the desktop services deal early.

It appears that there are lessons to be learnt for all IT contractors from the experiences of TfL and LogicaCMG. Nigel Roxburgh, research director at the National Outsourcing Association, explained: "Making the distinction between which outsourcing company is responsible for a problem can be difficult."

Speaking to VNUNet, he added that such failures can result in "issues with response times and service level agreements".

It was recently reported that the IT jobs market in London is improving and the organisation chosen by TfL to replace Logica CMG could help to further enhance that marketplace.

European firms increasing software spending

European companies are set to "significantly" increase spending on new software initiatives and projects, according to new research.

A study by Forrester Research highlights application integration, business intelligence BI and enterprise resource planning ERP projects as main areas for increased investment and upgrades in 2007 and so the areas where demand for IT contractors should also grow.

Other areas where firms are forecast to invest include upgrading security and adopting service-oriented architecture along with minor upgrades to messaging, email and collaboration software.

The report predicts interest in software-as-a-service SaaS will continue to grow among enterprises, with human resources applications heading growth.

Within the infrastructure software field, investment in security software application life-cycle management ALM is expected to be most common in leading-edge technologies, while larger businesses are predicted to focus on software-related outsourcing, although the popularity is expected to diminish for the levels set in 2006.

The increase in software projects is set to up demand for IT contractors, but they start to demand higher rates of pay due to skills shortages.

A separate Forrester study reveals that the number of students enrolling in computer science courses in the UK, Germany and Holland over the last five years has fallen by as much as 40 per cent.

The fall in skilled workers entering the labour market is expected to place a premium on those with programming skills. Shortages in the numbers of managers working between technical staff and business management are also predicted.

London jobs market strengthens

Demand for IT contractors in London has helped the capital"s job market to strengthen in the last month, according to new research.

The Bank of Scotland London Labour Market report for December shows that permanent job placements rose at the fastest pace for over two years and noted the increased call for IT contractors.

The poll of over 100 recruitment and employment consultants revealed that pay rates for contract, temporary and permanent staff also increased.

Tim Crawford, group economist at the Bank of Scotland, explained that the data reveal the good state of the capital"s property market, despite fears of the effects of the recent interest rate rises.

He said: "December"s survey data painted a buoyant picture of labour market conditions in the capital to end 2006 with employment growth accelerating and salaries rising as firms look to attract quality candidates.

"The data also suggests that so far rising interest rates have not yet impacted businesses hiring intentions."

Across all sectors demand for contract and temporary staff rose - in particular in IT & computing, engineering and nursing sectors. The demand for permanent IT staff was also high.

Pay rates for contract staff rose at the fast paces in over two years - in part helped by increased number of vacancies and reduced staff availability.

Across the nation the lowest unemployment rates were recorded in the south-west and the north-west and the West Midlands posted the highest jobless rates at 4.4 per cent and 4.0 per cent respectively. London"s unemployed rate stood at 3.5 per cent.

UK IT contractors look to management

IT contractors are increasingly looking to take on roles where they can flex their management muscles, according to a new poll.

Although there is increasing demand in certain areas for IT contractors, the competition from offshoring is leading many to consider management positions and positions where they can develop higher value skills.

However, the poll by Giant Group also revealed that when choosing contracts, IT contractors are now less focused on income and job security.

Posts that allow skills development, provide levels of responsibility and give brand status are becoming more popular.

Matthew Brown, Giant Group managing director, said: "UK contractors are increasingly recognising the need to climb up the skills ladder and acquire more management experience as lower skilled IT functions continue to be sent off shore."

The poll of 2,500 IT contractors also revealed that those with the higher skills base are seeing bigger pay rises, as their skills earning them a premium.

Mr Brown said: "Contractors at the higher end of the skills spectrum are benefiting from double digit pay increases, whilst IT workers in support roles are seeing their pay stagnate or even decline.

"Contractors motivated principally by income neglect developing their skills at their own peril."

A recent poll by the National Computing Centre highlighted knowledge of Microsoft .NET, Java and SharePoint along with SAP and Oracle would garner the most demand for IT workers.

It also revealed that IT salaries should increase by 3.6 per cent in 2007.

Online IT recruitment increases

Half of people interviewed for a job apply to online adverts, according to new research.

A poll of 27 recruiters found by the National Online Recruitment Audience Survey Noras revealed that CVs remain the most popular way to apply for a job - with 38 per cent of applications - followed by filling in online application forms.

Sixty-two per cent of online jobseekers are looking for permanent work, 18 per cent for contract, or temporary positions and 13 per cent for part time roles.

Tim Elkington, managing director of Enhance Media, that runs Noras, said: "Online recruitment is more successful than ever before. More people are applying for jobs and getting interviews and of these, over half are now going on to get a job. Analysis of the results shows the market is maturing."

He went on to explain the feature in recruitment would see mobiles phones taking a greater level of importance.

He said: "It"s interesting to see the large number of jobseekers who have mobile phones with internet access. The next challenge for employers will be to make sure they keep in touch with these jobseekers by taking advantage of the latest technology."

While the use of the internet is being ubiquitous, separate research shows that women are failing to sell their IT skills effectively.

A poll of female IT professionals by The Training Camp found 54 per cent felt they need the proof of qualifications to back up experience, while men can get by on the gift of the gab.

Rob Chapman, chief executive of The Training Camp, said: "Whilst women may have exactly the same industry experience they feel they often lose out when applying for new jobs or projects as they dont have the paper to prove it."

The value of qualifications was also borne out as 35 per cent of female IT professionals said they found qualifications could boost salaries by as much as 40 per cent.

Self employed to claim more business expenses from home

Self employed people working from home will be able to claim more business expenses under new tax guidelines.

The updated Business Income Manual from HM Revenue & Customs HMRC allows for the self employed to claim a proportion of telephone line rental, cleaning bills and repairs.

The manual now states: "The home has a dual role for many self-employed people. It is where they live and also where they carry on some or all of their business.

"Even if they carry on most of their business elsewhere they are still entitled to a deduction for the part of the household expenses provided that there are times when part of their home is used solely for business purposes."

The manual explains that where there are single bills for both business and private use it does not mean the whole of the expenditure is disallowable but the part of the cost attributable to business use is allowable.

With repairs or redecoration, proportion of the expenditure for outside work could be claimed back - but a no claims could be made for a room with little or no business use.

The manual also contains warnings over the calculation of phone bills when domestic phone bill bundles - including TV and broadband as well as line rental - are used.

Key questions that HMRC suggests that people ask themselves when working out what expenses can be claimed back include: what proportion of the house is used for business, how long is it used for business purposes, and how much electricity is gas is consumed.

Taxman"s daily £130k IT contractor bill

HM Revenue and Customs HMRC is currently spending around £130,000 a day on IT consultancy fees for contractors to cover staff shortages, a parliamentary committee has heard.

Paul Gray, acting chairman of HMRC, told a treasury sub-committee yesterday January 24th that the spending was heading towards improving IT systems in its Southend office. The bill per IT contractor was put at £650 per day.

He went on to tell the committee that the HMRC was aiming to train in-house staff to become less dependent on consultants and IT contractors in the future.

The current investment in IT is aimed at helping to create long-term efficiency savings of up to £500 million - which stem from the merger of Inland Revenue and HM Customs and Excise Departments in 2005.

HMRC is also planning to create a separate large business IT organisation within its structure.

Speaking last week, Cabinet Office minister Pat McFadden outlined the government"s plans for IT projects in the coming year and made it clear there were no plans for a new supercomputer or a new government database.

He told the e-Government National Awards in London that there should not be a "national defeatism" on the issue of IT projects.

He said: "If things go wrong with government IT we should hold our hands up, fix the problem or learn the lessons. But it would not only be factually wrong to say this was the case for all government investment in technology - it would also represent a damaging national defeatism about the future.

"The government has a duty to invest taxpayers" money wisely and it is fair that we be criticised when -government gets it wrong but we must never let creativity and ambition be defeated by the default nostalgia that says things were always better in the past and it"s not worth trying to do things better in the future."