Many IT contractors are not happy with the emergency budget proposals which include a huge crackdown on the public sector. It is believed that main IT contractors may decide to look elsewhere for work if the public sector doesn’t provide opportunities.
One IT recruitment company, IntaPeople, has warned that many valued IT personnel will seek work elsewhere, which could be bad news for the public sector. The emergency budget held 22 June 2010 announced a pay freeze for public sector workers as well as the attractive public sector pensions. Many departments in the public sector have seen a reduction in budgets of around a quarter, which will result in severe cutbacks.
Stephen Riley, one of the directors at IntaPeople said that the government should have assessed individuals separately rather than treating the freeze on pay, pensions and recruitment with a blanket approach.
As umbrella company IT contractors play such a huge role in the public sector it could be a mistake withdrawing investment at this time. Martin Ferguson, speaking on behalf of the public sector IT managers group Socitm, said that he thought the budget should have considered the modernisation of technology in order to improve the public sector service.
The public sector may lose valuable resources if umbrella company IT contractors look elsewhere for work, as without up to date technology numerous services provided may suffer. Many contractors provide a valuable, flexible and cost effective service, but the freeze on pay and pensions may drive them away to seek new pastures.
IT developers were also dismayed to hear that the tax relief on video games proposed by the Labour government in March 2010 has been abolished. This relief would have cost £190 million in the period leading to 2014. It is strongly believed that this could cost the UK millions in lost jobs and investment.
