Public sector IT contractor ‘confidence collapses’

Confidence in the public sector to create IT jobs for contractors has fallen to an all-time low; unsurprising when many computer programmes and projects are still being shelved or scrapped.

Revealing what it called a “collapse in confidence”, Giant group found that only 9% of IT freelancers expect public bodies to hand out the most IT contracts over the next year, compared with 17% in March.

Underlining the deterioration in prospects, the payroll group said the same second quarter poll found the public sector had almost 30% of IT contractors backing it as their jobs engine when it ran in 2008.

But since then, pay for workers in non-private roles, as totted up by agencies of the Recruitment and Employment Confederation (REC), has fallen continuously – in the run up to the Spending Review and ever since.

Giant blamed the chancellor’s statement entirely, saying the budget cutbacks announced in October last year reflect the current lack of confidence that contractors have in the state’s ability to provide IT work.

Two online recruitment indexes of the public sector, although not specific to IT openings, suggest there are firm grounds for the contractors’ pessimism.

Monster UK counts the supply of public sector job opportunities to have dropped by 15 per cent against this time last year, with last month seeing the steepest decline over the 12-month period other than in May.

Meanwhile another jobs site, Reed, says that demand in July for new public sector staff came in flat, yet it is not even half the level it was when the index was first launched (in December 2009).

But out of all the readings of public sector recruitment, Reed’s is the most positive, for it shows intake of workers has recovered from an effective freeze in December 2010 which, although probably seasonal, failed to begin to thaw until February 2011.

In part, this is because a lot of projects that would have ordinarily created opportunities for IT contractors, and other workers, “have been put on hold indefinitely, or even axed altogether.”

Giant’s director Matthew Brown added: “Many public sectors IT projects, such as the national identity card scheme, have been scrapped, and with the government still wielding the axe, job opportunities for IT contractors are expected to be scarce for the time being.” 

The only potential upside for temporary IT staff is that pressure on public bodies to keep permanent IT headcount down “may mean more opportunities arise in the medium term for contractors,” he said, thanks to unavoidable spikes in workload.

IT recruitment agency SQ Computer Personnel said contractors in the public sector could notice this impetus over the next few months. 

Managing director Bernie Potton reflected: “I think it will begin with more ‘project-based’ staff where staff will not be required after the implementation of whatever the specific project is, rather than them being expected to be used on future projects.

“Therefore it will start with project manager and business analyst vacancies moving from perm requirements more towards contract requirements.”

However, contractor headcount is not immune to the same hiring restrictions, and even if temporary workers are used in lieu of taking on staff full-time the motivating factor - “budget constraints” - threatens to drag pay levels.

Such pressures are most prevalent for public sector clients, the REC explained, in line with the sector’s temporary workers reporting increasingly slim pay packets or, at best, “constrained” rate increases.

Still, Sid Barnes, executive director at Computer People, confirmed that the public sector’s contract IT professionals may be better positioned than their full-time counterparts.     

“Contractors may fare better in the coming months than those seeking permanent IT roles. Despite their higher daily costs, contractors are popular as a more flexible resource that can be used to deliver specific priority projects and then leave, without having an ongoing impact on budgets,” he said.

“Many organisations are looking for these interim contract solutions. In the public sector and indeed across the IT sector as a whole, analysts, developers and managers are the roles most in demand.

"Businesses are [also] looking for core developers, business intelligence specialists and project managers that can design, build and deliver new and innovative products to boost numbers of new customers”.