A new report by UCL and Arup reveals that UK city authorities spend an average of £23 million a year each on IT, which is 6% of their total expenditure.
The study, ‘Delivering the Smart City’, released today was produced on behalf of the Smart City Expo World Congress. It analyses the spending patterns of eight major UK cities to gain an understanding of how much money cities are paying for technology, as well as considering whether this expenditure is ‘smart’.
The research, carried out with an open data research consultancy, Spend Network, reviewed the eight city authorities’ IT spending habits over the last three years and found that they are almost double the amount the utility (3.6%) and transportation (3.6%) sectors are spending, and are comparable to the amount spent by the financial services sector.
The Square Mile (courtesy of Michael Garnett on Flickr)
Financial services typically have significant IT governance structures in place and IT leaders (Chief Information Officers and Chief Technology Officers) who are directly responsible for aligning IT with business needs. The report found that UK city authorities do not tend to have comparable governance structures in place to join up investments across different city siloes, meaning that despite significant investment, they may not be reaping the benefits they should.
Dr Ellie Cosgrave, Research Associate at UCL Science, Technology, Engineering, and Public Policy (STEaPP) in Engineering Sciences, said: “Our research shows that cities are comparatively ahead of the curve in viewing IT as an essential part of their annual expenditure. Although this is very positive, we also see that cities aren’t benefitting fully from their existing investments in smart technology and could improve this through more strategic oversight. This can be achieved by sharing innovative ideas and lessons learnt within and between cities, and by creating governance structures that enable efficient cross-department working.”
“Our research shows that cities are comparatively ahead of the curve in viewing IT as an essential part of their annual expenditure. Although this is very positive, we also see that cities aren’t benefitting fully from their existing investments in smart technology and could improve this through more strategic oversight.”
Dr Ellie Cosgrave
Lean Doody, Smart Cities Lead Consultant at Arup, said: “Smart technology does not need to be a new cost item on the balance sheets of city governments. Rather than adding to the city’s existing technology expenditure, smart technology can enable cities to get more value from their IT investment. Cities do not need to start from scratch to realise the opportunity of smart.”
The report also explores a further eight global cities, including Rio, Barcelona and London, to assess the challenges faced by city governments. The report takes learning from these case studies to outline seven principles for smart city investment that provide city authorities with key indicators on how to successfully spend, monitor and manage their technology to create more liveable cities.
Lean Doody added: “Smart city initiatives need to be about more than creating a few apps or a city information portal, but the techno-utopian ideal often portrayed is an unrealistic view of what we can, and need, to achieve. Cities need to be interconnected and information rich and IT is the enabler of this. City authorities need to approach investment in smart technologies and IT strategically and tie that investment to the long term vision of their cities.”