It’s not just the new coalition government that’s looking to cut spending, UK’s CIOs are set to embark on a cost-reduction exercise too, according to research from Micro Focus. The company has found that 50 percent of UK respondents expected IT budgets to be cut again in 2010, despite the more favourable economic conditions.

Furthermore, the long-term prognosis is not good, with 43 percent of British CIOs saying that cost-cutting will remain their priority for the next three years – CIOs in other countries are more optimistic, only 26 percent of US CIOs felt the same, while Germans were positively perky, with just 17 per cent  expecting to spend the next three years shaving costs off the budget.

The vast majority of respondents said that application modernisation was their preferred way of cutting costs – this was the choice of 63 percent of the British CIOs.   And of the companies that had completed modernisation projects, 70 percent said that their costs had been reduced.

One surprising factor was the number of companies that still used a mainframe, with 75percent of US companies employing big tin, compared to just 45 percent in the UK. There’s life in the old dog yet.