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VALUE OF FINANCE CONTRACTING OUT UP 20% ON LAST YEAR

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The annual value of the local government managed services contracting-out market is now£42 million, an increase of...
The annual value of the local government managed services contracting-out market is now £42 million, an increase of 20% on the previous year, according to the ITnet Index Report.

Six contracts have already been signed this year, worth an annual £6m. 'During the rest of 1996, nine London boroughs will market test aspects of their financial services, which will result in additional contracts worth £10m a year by the end of the year,' said Rod Watts, Itnet divisional director. Other new deals were also anticipated, he said. 'We are confident market growth will reach our prediction of £28m for 1996 as a whole.'

Of the six contracts already signed in 1996, three councils were contracting out for the first time. One signed two contracts, the remaining two contracts were renewed with the incumbent supplier.

The £6m value on these contracts is 34% lower than the same period in 1995 where one council signed a contract which accounted for 68% of the market.

Renewals account for 30% of 1996 contract values.

In total, 62% of London boroughs have contracted out managed financial services to date, followed by 20% of counties, 14% of districts and 4% of unitary authorities.

The survey also found the contracting out of IT was growing steadily to an annual market value of £109m. In the calendar year to date, 12 contracts had been completed against 14 for all of 1995.

Eight authorities contracted out for the first time, four renewed contracts with the incumbent supplier.

The Itnet interim report is a mid-year update on the Itnet Index, published in January each year.

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