Oxygen Finance

Hybrid Working Leads to Increased Local Authority Spend on Technology

More than two and a half years after global businesses were forced to alter their working patterns because of the Covid 19 pandemic – shifting from office-based working to a hybrid of home/office work practices – disparity still remains regarding the productivity of home working. Oxygen’s Jon Pugh looks at what this means for local council investment policies.

A recently released link major survey by global IT giant Microsoft highlights that although “people are working more than ever”, an organisation’s leaders “are questioning if their employees are being productive”. The survey, which quizzed 20,000 people in 11 countries, adds that although 87% of employees believe they are productive when home working, around the same percentage of managers (85%) say that the shift to hybrid working “has made it challenging to have confidence that employees are being productive”. In pre-pandemic days, managers would use visual cues to assess an employee’s productivity as they could observe workers at their desks and have a good gauge on their output; however, in today’s working environment, managers now have less visibility of their employees and their work, with interactions now based on email/messaging tools and meeting platforms such as Teams and Zoom.

How our own experience stacks up

Oxygen Finance is no different in this regard. We initially switched to home working practices in March 2020, which have since been phased out and a more hybrid working model introduced as the pandemic/its restrictions eased. The company’s Chief Technology Officer Rob Parker agreed: “The post-pandemic world has forced managers to trust employees and measure success based on outcomes rather than attendance. As a company focussed around data, Oxygen have always operated in this way and are now seeing further improvements in employee satisfaction and productivity due to hybrid working”.

An explosion in ICT spend by local authorities

This approach has no doubt been reflected not just in the Midlands but across the UK, especially for the organisations that serve a key public function – local authorities. Data obtained from Oxygen’s Insights Spend, which categorises expenditure across various business modules for UK councils, the NHS and Central Government, shows how Tier 1 councils’ (London Boroughs, Metropolitan, County and Unitary authorities) spend on three specific IT categories (ICT Infrastructure; ICT Support Services & Systems Integration; and Network & Comms Services) rocketed in the early months of 2020, almost doubling from nearly £68M in February 2020 to more than £107M in March 2020. This trend continued throughout 2020-21 and 2021-22, reflecting the pattern of the national lockdowns and subsequent easing of restrictions throughout the course of the pandemic.

Who were the big winners from this increased spend?

The local authorities spending the most during this period were Kingston upon Hull, Lancashire and Essex (2020-21) and Kingston upon Hull, Camden and Essex (2021-22), of a total all-council spend during the two financial years of £1.1Bn and £977.3M respectively. Unsurprisingly the obvious suppliers during these periods were communication providers including British Telecom, Insight Enterprises UK Limited and Virgin Media, as well as contributions from Agilisys, Capita, Civica and Vodafone.

This trend showed no signs of letting up in the first few months of the 2022-23 financial year either, with monthly spend by the Tier One councils, on the three IT categories noted above, going over £70M for April and May 2022.

Moving forward, this new mix of hybrid and office working is likely to become the norm across the globe in the coming years, and if this is the case, it appears that a resolution will be required between managers and staff. And everyone’s reliance on new forms of communication technology will, more than ever, ensure that connections are maintained no matter how people choose to work.

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