Science: Electoral packages in poll position: A two-man software company is helping local authorities to keep track of election rolls and results. Lynne Currie reports

From a farmhouse near Weston-super-Mare a two-man company liaises with 63 local authorities all over the country, providing them with computer software to collate and organise their electoral rolls and elections. Simon Noblett, founder and partner in Pickwick Computer Services (PCS), prefers not to talk about turnover, but a simple calculation reveals that pounds 300,000 is a very conservative estimate.

PCS is not typical of software in the public sector - the dominant companies are large in terms of staff and turnover - but illustrates the rewards of being first to find a niche and develop it with acumen. He and his partner, Philip Henson, started providing software packages to councils in 1987 and have successfully ridden the wave that has delivered more and more public sector work to private companies.

The software industry is rubbing its hands in anticipation. By 1996 local authorities will be obliged to put all their information technology (IT) functions out to tender. Central government has been following this trend for several years.

Putting both factors together, it is not surprising that commentators say government will be the biggest software growth area over the next few years. Projections suggest a 12.5 per cent growth between 1992 and 1996, pushing the market's value to pounds 2.3bn.

The software trade body, the Computing Services Association, has had so many inquiries from local government departments that it has published a guide to suppliers. Considering the affluence of the software industry, with high earnings and conspicuous wealth, and the relative poverty and parsimony of government departments and local councils, the assurance that the public will not end up paying more is not the easiest to accept. But according to the industry, competition will keep a bridle on costs.

Rob Wirszycz, the CSA's marketing director, says the public will get a better deal and it will cost them less. 'Competition is everything. People are outsourcing fundamentally generic activities so they can be done by several suppliers. Other industries, such as the media and construction, have had years of handling outside contracts and we're now at a stage where industry is learning how to manage IT. We believe in competition and choice and one leads the other.'

Tasks from managing trees to monitoring air quality are performed either totally by outside companies (outsourcing) or with software engineered outside. In both sectors, the dominant company is American-owned ICL, whose strength is in business solutions across several fields, including central and local government. Software and services earn ICL more than pounds 300m a year, and its total revenue is more than pounds 2bn a year.

But British names perform well in the public sector. Logica, Capita, McDonnell Douglas Information Systems and Admiral are among them with Logica, which remains independent, the longest established. Its founder, Philip Hughes, was managing director until 1990. Sixteen per cent of Logica's annual turnover ( pounds 217.4m to June 1993) is derived from government.

One of its high-profile projects is running the UK's air quality information service on behalf of the Department of the Environment. It evolved a system to package information from various monitoring networks and tailor bulletins, which are sent by automatic fax at scheduled times. It also developed a search and rescue planning system, reducing the time taken to calculate the drift, search area and search plan for maritime casualties. The system was used in the Piper Alpha disaster.

John Coleman, Logica's group manager for civil government, said the company expected to benefit from the move towards outsourcing and private tendering. 'Logica has always been a pre-eminent developer of systems. Our greatest strength is building new systems for companies and providing them with consultancy and support in deciding what systems to build and making sure those systems are a success.'

Mr Coleman said it was a 'management problem' to ensure that government departments did not end up paying more if the company it dealt with managed to squash the competition. 'I'm sure that government will ensure competitive practices remain. There has to be a balance between awarding a contract sufficiently long for an outside supplier to make cost savings and improvements but not so long that you can't have effective competition.'

TV licence fees are now collected by outside companies, which also run the commercial operation of Companies House and the vehicle licensing division of the Department of Transport. Hoskyns, British-founded but now American- owned, runs the council tax administration for Grampian and Moray councils in Scotland and is processing parking tickets issued in two London boroughs. In anticipation of more of the same, it has built a pounds 3.2m business processing centre in Forres, near Inverness. Hoskyns now also runs Operations West, an administration centre for the Ministry of Defence in Devizes, Wiltshire.

Hoskyns has an impressive list of clients: the DSS (a sub-contract from ICL) for management information on benefits payments; a Home Office major inquiry system developed after the Yorkshire Ripper investigation; command and control systems for the police and data systems for hospitals.

But despite the increasing presence of private companies in the public sector - a principle not conceded to be beneficial by displaced internal divisions in the civil service - some local authorities have rallied. Reigate and Banstead's IT department successfully bid to keep its own work, and has produced guidelines for other authorities to follow suit. Epping District Council entered the Computing Services Association's 'raising standards' competition with its own electoral management system, which it has been selling to other authorities.

But Simon Noblett and Philip Henson in Weston-super-Mare remain dominant in this field with their electoral package, followed by a second system for committee administration. PCS was certainly shrewd when it decided not to sell the systems as a package. Instead it gives annual licences and maintenance agreements for annual fees ranging from pounds 4,000 to pounds 7,000, depending on the population size - a technique Mr Noblett learnt from working at McDonnell Douglas after leaving his first job in local government.

'It's regarded as the Rolls-Royce of systems. We've spent a lot of time and effort in getting it to produce election notices to typeset quality,' Mr Noblett says. 'Where before councils had to have prints made up, our system produces them for a few pence off a laser printer. That's a big selling point for us which the competition has yet to catch up with.'

PCS sees its mission as one to convert those authorities who have rival systems or are still using their own, which Mr Noblett says are usually quite basic. Westminster, Bradford, Solihull and Durham councils are among those who have taken the system and he sees no end to the project. 'We are snowed under with work. We've done 15 new sites this year and it shows no signs of abating, so we can still see a future for the next two or three years.'

(Photograph omitted)