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Decline in ICT Contractor Rates not all Good News for Federal Agencies

by Staff Writers •
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The Federal Government has been warned it risks losing its ability to attract the best and brightest in an ICT market still experiencing shortages in a number of ICT skill areas.

Intermedium's Federal Government ICT Labour Hire Report 2007-08 shows that in the year to June 2007, the Federal Government reported labour hire contracts worth $656 million, but in the 2007-08 financial year, the figure was down to $494m million. That's a fall of almost 25%.

This reflects both a significant fall in spending across the board and uncertainty surrounding the independent review of the Australian Government's use of ICT by Sir Peter Gershon, whose report was recently presented to Finance Minister Lindsay Tanner.

Until late 2007, contractors were coming from other states to work in Canberra, attracted by contracting rates amongst the best in the country. However, this trend is now over.

The downturn in demand has contributed to a reduction in contractor rates, but when activity returns to the market at the conclusion of the current round of reviews, agencies may face a shortage of skills.

According to Tim Conway, Intermedium's Head of Research, the outlook for labour hire will remain soft for the remainder of 2008. However, when program activity picks up following completion of a number of reviews (including Gershon), there is likely to be a significant increase in the demand for ICT skills.

Key findings from the 2007-08 Labour Hire Report include:

  • More than 3,500 labour hire contracts were reported during the 2007-08 financial year
  • Both the number and value of contracts was down on the previous year
  • The average value of contracts was more than $130,000
  • The top supplier accounted for almost 10% of the market
  • The top 5 agencies accounted for almost half of the contract value

Further information about this market is available from Intermedium's Federal Government ICT Labour Hire Report 2007-08, one of Intermedium's comprehensive reports on the Federal Government ICT Labour Hire market.

An annual report is now available for the 2007-08 financial year. It contains information on

  • Size of the market and comparison with 2006-07 financial year
  • Contracts by value range
  • Top 25 suppliers (number and value of contracts)
  • Top 25 agencies (number and value of contracts)
  • Top suppliers in Top 25 agencies

Intermedium also publishes quarterly reports on the current financial year in the same format as the annual report.

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Jurisdiction
  • Federal
Sector
  • Policy
Tags
  • Contract
  • Federal Government ICT
  • Gershon
  • Labour Hire