IT consultants are enjoying a time of plenty, according to the latest report from the Association of Technology Staffing Companies (ATSCo).

Its analysis shows that pay rates for IT consultants have soared by over 17% in the last year, fuelled by a flurry of mergers and acquisitions which has driven up demand for those with skills in integrating disparate IT systems. The average pay for an IT consultant in 2006 was £48,383 – up £6,500 from a year earlier.

Demand for consultants has also been stoked by the continuing appetite for outsourcing. Consultants with expertise in managing this process are highly sought after, reports ATSCo.

In particular, the public sector has increased its use of outsourcing deals, as government departments look to multiple external partners to help manage large-scale IT programmes. Consequently, public sector expenditure on external IT consultants hit £2.8 billion in 2006, representing an annual rise of 33%.

According to ATSCo, these developments have led many consultancies to launch aggressive recruitment drives during the past few months, and many are now locked into bidding wars, in an attempt to secure staff.