Government IT spending looks set to fall dramatically this year, as local authorities focus on efficiency opportunities after making huge investments in e-government transformation programmes.

According to the IT Trends 2006/7 report released today by public-sector IT trade association Socitm, local authorities’ IT spend is forecast at £2.7bn for the period April 2006 to April 2007. This is a marked decrease on the previous year’s figure of £3.3bn, which Socitm attributed to the end of the main e-government transformation programme in 2005.

To make up for the reduction in resources, IT chiefs in local authorities are focusing on more efficient procurement processes, shared services and outsourcing, the report revealed. However, Socitm found that demand for new hardware will continue into this year as councils plan to purchase more than 240,000 devices, only a slight decrease on last year. Desktops will be the most popular purchase in this area.

Meanwhile, the government announced additional cost-saving measures last week that will see at least 551 of its web sites shut down.

In total, 951 sites have been considered for closure. Ninety of these have already been axed and relevant information from them has been transferred to the Directgov and Business Link portals. In future, more online content will be consolidated onto "supersites" like these, according to government plans.

The move was announced at the launch of the first annual report on the Transformational Government initiative today. At the event, minister for Transformational Government, Pat McFadden, vowed that "the quality of our services will not be affected by these changes”.