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Now public sector prepared to slash contractor rates

Published on Apr 2, 2009 | | Contract Rate Checker

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Following on from cuts at many of the UK's largest companies, now Leeds City Council has decided to slash 10% its IT contractor bill.

Over the past year, we've seen rates slashed at most of City investment banks as well as a growing number of non-financials.

Recent additions to the rate cut list include BP, Capgemini, HSBC, and inevitably many others who have not been reported by the media.

In February, BP asked its 900 contractors to accept a 10% cut (and to agree to the new terms within 48 hours).

Later in the month, Microsoft's US IT contractors were subjected to a similar reduction in rates, although its UK contractors were spared on this occasion.

Although it may not affect a large number of contractors, the Leeds City Council cuts are significant in that they show the willingness of public sector bodies to make radical contractor cuts.

A spokesperson from the Council told The Register:

"Because of current budget pressures all suppliers on the framework have been asked to provide a ten per cent reduction on the rates paid for existing and future ICT contractors. The suppliers concerned have indicated that this is typical of what is happening across the ICT sector at this time."