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INFORMATION TECHNOLOGY TRENDS IN LOCAL GOVERNMENT 1998/99

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The Society of Information Technology Management (SOCITM) has published its 12th annual survey of trends in the app...
The Society of Information Technology Management (SOCITM) has published its 12th annual survey of trends in the application of information and communications technology (ICT) in local government.

The report is based on an extensive questionnaire sent to IT managers of the 442 local authorities in England, Wales and Scotland - around 50% responded. In addition, subsidiary questionnaires were used to gather the views of chief executives and heads of principal services on the importance of ICT to their departments and authorities, and on the quality of the ICT services they receive.

The Society is pleased to acknowledge help and financial support from a number of organisations with interests in local government - Data General, Deloitte & Touche, ICL, Oracle, Sun Microsystems and Ultracomp.

Main Points

1. Local government budgeted to spend£1,020m on ICT in 1998/99, around 2% of gross revenue expenditure. This covers all expenditure on equipment, staff, software and services but excludes conventional telephony.

Spending on ICT is about the same as last year (£1,019m) although in real terms it represents a further squeeze on budgets and is 19% lower than the peak reached in 1992. In practice the reduction is less dramatic in that the cost of technology (about a third of the total) is falling.

There is a wide variation between authorities with broadly similar numbers reporting increases and decreases in their budgets. Decreases were attributed to removal of mainframe computers, downsizing as a result of Local Government Reorganisation and savings from outsourcing contracts - in addition, budgets were decreased as part of general budget cutting exercises. However some authorities budgeted to spend more on ICT for reasons which included LGR (districts achieving unitary status), additional money for Year 2000 work and, not least, demand for new applications. This suggests that there are widely different attitudes in authorities towards the value of investing in ICT.

2. 28% of authorities applied for external funding for projects involving ICT in the last year.

Common sources were EU, lottery, SRB and PFI. Authorities reported a 90% success rate in obtaining funds ranging from£30,000 to£4.5m. Indications are that some authorities may be losing out due to lack of knowledge of the application procedures and an inability to undertake the projects.

3. Demand for IT staff is increasing but many authorities report high turnover and increased problems with recruitment.

Numbers employed rose last year by 500 to 18,000 after several years of decline from a peak of 21,000 reached in 1994 - a reduction explained partly by the transfer of IT staff out of local government through outsourcing contracts. Many authorities now want more IT staff to cope with Year 2000 and new ICT initiatives and a further increase is predicted this year.

Unfortunately this demand coincides with similar demand in other sectors of the economy. This is reflected in the statistics:

- staff turnover has increased from 5.5% in 1996 to 9.3% in 1998,

*52% of authorities reported recruitment difficulties this year compared to 20% in 1996,

*only 14% of staff left for reasons of retirement or compulsory redundancy this year compared to 46% in 1996 - the rest left on their own accord, usually achieving significant pay increases.

Some authorities are resorting to practices, last seen at the end of the 80s, of attempting to enhance the pay and conditions of skilled IT staff. However, it is possible that the predicted slowdown of the economy, coupled with completion of Year 2000 work next year, will see another reversal of the trend.

4. More than a quarter of local authorities have outsourced parts of their ICT services.

Outsourcing continues to be seen as an option with a further 7% of authorities considering it for the first time. However 'contracting out' is being used more selectively and the pace appears to have slowed.

Most of the authorities, who have outsouced, say that they are well satisfied with the services provided but many contracts are due for renewal in 1998 and 1999. It will be interesting to see how many are re-let to the same supplier.

5. The 'mainframe computer' is disappearing fast.

Nearly 40% of authorities no longer have a mainframe and 80% of the remainder plan to remove theirs over the next few years.

They have been replaced by midrange machines, which are simpler to operate, and by PC Servers. These have proliferated in recent years but the survey indicates that some consolidation is now taking place on fewer more powerful machines.

The report contains estimates of the market shares of the main suppliers.

6. The numbers of computers on desks continue to grow but there are signs that saturation point is approaching.

We estimate that there are now around 640,000 devices on the desks of staff, as well as of many chief officers and Members. Over 80% of these are personal computers, most of the rest being fast disappearing VDUs connected to mainframe computers. Numbers are still growing but the rate of growth is slowing. The prediction is for 670,000 devices by 2000, around two for every three white collar staff. Since some will never need access to computers, and sharing is acceptable to others, we believe we may be approaching saturation point.

As always we include our 'top ten' of PC suppliers.

7. Over 80% of PCs are now connected into networks within authorities, a percentage expected to reach 94% by 2000.

This is essential to enable staff to use Email and access information from within and outside their authorities.

8.Email is being used in almost all authorities but the number of staff having access, is limited many of them.

Over half the non-manual staff in 60% of authorities can use an internal Email system but in only 27% can they communicate with people outside their authority. In the rest there is even more selective access.

9.The IS/IT function manages the data networks in most authorities but telephone networks in only half.

Traditionally telephone systems were managed by departments of administration or similar whilst data networks have always been the province of the IT function. Since recognition of the increasing convergence of voice and data, many authorities have transferred responsibility for telephones to IT. At present this is the situation in 53% - convergence has not yet come to the others.

10.73% of authorities currently use electronic systems, in addition to conventional telephony, to communicate with their citizens, customers, local businesses and other organisations. A further 17% are planning to introduce such facilities.

Around 70% of authorities have set up a site on the World Wide Web, typically providing information about the authority and other public services, leisure and tourism, and economic development. The quality and value of sites varies but many are moving from pilot applications, usually run by the IT function, to becoming an important service and vehicle for communication.

Some authorities have installed terminals for public use in council and other public buildings and a minority has set up call centres and uses video conferencing.

Few authorities have allocated a specific budget for developing and maintaining these facilities. Many said that the greatest barriers to developing their web sites are money and staff time as well as the commitment of senior officers.

11.40% of authorities use Internet technology as an intranet for internal communications and to enable staff, and Members, to access the council's information systems.

The survey indicates that the most common types of information, available through intranets, are electronic manuals and guidelines, telephone directory, staff vacancies and other general information. They also facilitate communications using Email and provide convenient access to specific systems. The latter is particularly useful where access is required from remote locations (e.g. from officers/Members' homes or local offices).

12.The survey contains a 'Which' type report on corporate finance and human resources software.

We report on the main suppliers, age of systems and authorities' satisfaction ratings.

13.Year 2000 is a major problem on which it is expected that local authorities will collectively need to spend£260 million.

Over 60% of authorities had, at the time of the survey in June 1998, carried out an assessment of the work required on all their systems and had made substantial progress with coding and testing. Others were further behind, particularly in respect of departmental systems. 20% of total predicted expenditure had been spent by the end of the 1997/98 financial year.

Most IS/IT managers are confident of meeting deadlines for their authorities' main systems but are more worried about equipment containing embedded processors.

14.The next problem is the Euro - so far the IT implications have received little attention.

There is uncertainty about its immediate and longer-term impact on local government yet 50% of authorities said they had done nothing and most of the rest said they had undertaken no more than 'an initial awareness and assessment' exercise. Just four authorities claimed to have developed plans for replacing, or modifying, their financial systems yet only 29% of authorities currently have finance suites which support, or are scheduled to support, multi-currency facilities.

15.The survey looks at criteria by which the 'health' of an authority's use of ICT might be judged and of its preparedness for a 'Best Value' regime.

We take the view that authorities need to show that they realise and use ICT to its full potential in all areas rather than simply demonstrating that they have efficient providers of ICT services. The criteria are:

- Measures of the efficiency of the IS/IT function.

Authorities were asked to state which, of eight performance indicators, they monitored and used as a basis for action. They were not asked for the value but the number and spread gives an indication of the level of concern with performance. The average is four but there is considerable variation between authorities.

- Standards in place

Nine were chosen including methodologies for project management and investment appraisal. Again the number used is indicative of good management practice - the average is five.

- Recent contributions of ICT to helping the authority to achieve its objectives

Actual achievement is an important measure of the effective use of ICT - the report contains an analysis of responses.

- Service performance - customers' views

The views of customers are an important measure of service performance. On average chief executives rated the performance of the functions providing ICT services in their authorities at 2.8 on a scale 1 (poor) to 4 (excellent). Heads of service were slightly more critical rating it at 2.5. Views differed considerably across authorities but there were slightly more 'good' and 'excellent' ratings than 'satisfactory' and 'poor'.

- Influence and involvement of the IS/IT function

The extent to which the IS/IT function influences and is integrated into the policy and operational processes of the authority is likely to be related to the authority's success in using ICT. The IS/IT function has some influence in many authorities but scores poorly in a few as evidenced by:

- 14% of IT managers feel they have hardly any influence in their authorities,

- 36% of chief executives said that the IS/IT function should 'perhaps be involved more often than actually happens', and

- 8% of chief executives think that the ICT work programme is not well linked the council's business objectives.

*Senior officers' understanding of the role of ICT in local government

Most chief executives and service heads believe that ICT has an increasing role to play in their local authorities in delivering services and dealing with issues such as social deprivation or transport policy. However responses varied - we suggest that a crude measure of 'understanding' of the potential of ICT is the extent to which individual responses differ from the average, either very high or very low.

We encourage authorities to measure themselves against the average responses set out in the report.

Conclusions

The report provides statistical and qualitative evidence of the state of information and communications technology in local government today. It shows that the majority of policy makers and senior managers believe ICT to have an important part to play in delivering services, improving the democratic process and in meeting councils' business objectives. Furthermore, they believe its importance will grow.

It also shows that, like most other parts of local government, the providers of ICT services are working under pressure to reduce costs and do more with less. The difficulties are enhanced by a return to problems of recruiting and retaining skilled staff, and the need to cope with an overhaul of all systems to ensure that they will not fail in the new millennium.

Despite these difficulties, the survey provides encouraging signs that authorities are benefiting from the introduction of new ICT based facilities such as the internet, document management and email. With them, they are finding new ways of communicating, of giving and receiving information, and of providing the services for which they are responsible.

The report is a summary of the position. We believe its value to authorities is in enabling them to assess their own position, both input and output, against the norm.

In addition to the printed report, the society is this year offering a CD Rom containing the individual responses, albeit with names of authorities omitted. This will enable further analysis to be carried out to meet particular needs.

Brian Westcott, Editor 'IT Trends'

Further information from Brian Westcott (01244 675431), bw@chester-uk.demon.co.uk or Jon Serle on (0152 255 3807). jms@lincolnshire.gov.uk

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