Public sector doors may be closing on contractors specialising in the IT skills market but the are opening in the private sector, as more firms invest in new technologies and seek IT consultants to help get them up and running.

The latest Publishing Trends in UK Consulting report from the Management Consultancies Association (MCA) reveals that total fees paid to IT consultants, including techies working through umbrella companies, have been rising strongly over the past twelve months amongst many British firms. The total spend on IT consulting by firms in the construction and transport sectors soared by 80%, while businesses in the energy and resources sectors increased their spend by 39% over the same period. Manufacturers in search of effective IT management solutions paid 25% more on consultancy fees over the year.

Austerity may be harming contractors in the public sector, but the report finds that it is not preventing British businesses from investing in new unified communications technologies and cloud computing, largely because they can see the advantages: better options and improved efficiency.

In the public sector, however, the picture looks considerably gloomier. According to the PCG, it is not simply austerity that is hampering the use of skilled contractors: it is media-fanned government panic too. Newly drafted guidelines in key public sector departments, including HM Treasury and the Department for Business, Innovation and Skills, look set to completely eliminate contractors who freelance through limited companies from the public sector by insisting that all who are paid more than £220 per day should operate within IR35 or have their contracts terminated.

PCG MD John Brazier condemned the measures as “potentially catastrophic” for the departments affected.

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