Total budget of Estonia's public sector IT organizations has quadrupled in 10 years

Around 1,765 people are employed in public sector IT services, spread across seven institutions, whose total budget has quadrupled over the past decade. According to a representative from the Ministry of Justice, the most significant growth has been in the field of cybersecurity, which now requires considerably more attention than before.
The combined budget of the state's seven IT agencies stands at €265.5 million this year. A decade ago, their total expenditure amounted to just €66 million — more than four times less. The number of employees has also significantly increased over that period, from 722 to today's 1,765. At the time, the Health and Welfare Information Systems Center (TEHIK), established in 2017, and the State IT Center (RIT), launched at the end of 2021, did not yet exist.
Even compared to two years ago, the growth has been rapid. In 2023, there were 1,538 employees in these IT agencies, 227 fewer than today. The combined budget at that time was €275 million, which is nearly €10 million more than the current allocation.
However, adding up the budgets of different IT agencies does not necessarily reflect the actual annual spending. According to agency representatives, some of the funding planned for at least one institution remains in the government's reserve for now.
One of the largest state IT agencies is TEHIK, which manages information systems and databases in the health, labor and social sectors. When TEHIK began operations in 2017, its budget was €8.5 million and it had 69 employees.
These figures have grown significantly since then. As of this year, TEHIK employs 226 people and its budget has been set at €52 million.
"Over the past eight years, TEHIK's budget and staff numbers have increased for various important reasons. The volume of orders from clients in the health and social sectors has risen significantly during this time. Several new information systems have been added, which need to be developed and maintained to support our clients and end users," explained TEHIK's communications manager, Grete Kivi.
TEHIK's services are used by several agencies, including the Medicines Agency, the Health Board, the Social Insurance Board, the Health Insurance Fund, the National Institute for Health Development, the Labor Inspectorate, the Office of the Public Conciliator, the Gender Equality and Equal Treatment Commissioner's Office and the Astangu Vocational Rehabilitation Center.
According to Kivi, the Covid-19 crisis highlighted the need for enhanced data analysis capabilities and the state is increasingly moving toward data-driven decision-making.
"TEHIK plays a key role in this process. Our task is to provide precise and timely data analysis to support decision-making in both the health and social sectors," she said.
Kivi added that the state of cybersecurity has also changed significantly compared to 2017. Current requirements are far more demanding and resource-intensive, requiring investments in IT architecture, development and security testing. Additionally, TEHIK has taken over the management of the Health Insurance Fund's systems, bringing in additional resources.
"In short, the growth is driven by new tasks and responsibilities, which in turn make Estonia's health and social protection systems stronger and bring them closer to the people," Kivi said.
Cybersecurity more in focus
The largest budget among public sector IT agencies belongs to the Ministry of the Interior's IT and Development Center (SMIT), which develops and manages information systems essential for public safety and emergency services. In other words, SMIT oversees the IT systems of the Police and Border Guard Board (PPA), the Rescue Board, the Alarm Center, the Academy of Security Sciences and the Ministry of the Interior.
Ten years ago, SMIT had 253 employees. By two years ago, that number had risen to 370 and at the beginning of this year, it had grown further to 434.
The agency's budget has also changed significantly over the years. A decade ago, SMIT's budget was €30 million. By 2023, it had reached €75 million, including a €10 million carryover from 2022. This year, however, the budget has decreased again to €59 million.
Marie Kukk, SMIT's communications manager, told ERR that the reduction could be attributed to both budget cuts and the fact that part of this year's funding has been initially allocated to the government's reserve.
The Information System Authority (RIA) has a budget of €49 million this year. RIA is responsible for renting and managing the technological platforms of the digital state and ensuring the country's cybersecurity.
Over the past two years, RIA's budget has increased by €9 million. However, ten years ago, it stood at just €10 million. The agency's staff has also grown significantly over time, from 112 employees in 2015 to 307 expected by 2025.
According to Britten Torstenberg, public relations adviser at the Ministry of Justice and Digital Affairs, RIA's increasing budget and workforce have been accompanied by a notable expansion in the range of services provided.
"The biggest growth has been in the field of cybersecurity, as technological advancements have created ever more opportunities for cybercriminals, state-sponsored cyber groups and politically motivated hacktivists," she explained.
Torstenberg added that a decade ago, cybercrime — now the world's third-largest industry — was not a major concern. However, in recent years, Estonia has placed increasing emphasis on cybersecurity in response to cyberattacks linked to the war in Ukraine and the escalating security situation.
"There are also many new tasks stemming from Estonia's EU membership, such as the EU's Single Digital Gateway and cybersecurity directives, as well as national initiatives like event-based services and the implementation of artificial intelligence," Torstenberg said, adding that some of RIA's activities are funded through EU projects and are therefore time-limited.
Number and complexity of service has grown
The State IT Center (RIT) has a budget of €46.5 million this year, placing it in a similar range to the Information System Authority (RIA). RIT currently employs 226 people.
RIT provides computer workstations, server infrastructure and various centralized services to public sector institutions, including IT procurement. The agency was established at the end of 2021, primarily through the merger of other IT agencies. Since its inception, RIT's staff has grown by 38 people.
According to Britten Torstenberg, the growth is driven by the development of new services, such as the state's new workstation service and the establishment of the state cloud, along with integrating government institutions into these services.
The Information Technology Center at the Ministry of Finance (RMIT) has a budget of €30.4 million for this year. The agency currently has 197 employees, nearly 100 more than a decade ago, when its budget was just €12 million.
"The increase in volume is mainly due to the rising number and complexity of services, as well as greater development needs. Additionally, the requirements for these services have increased over time," explained RMIT's marketing and communications specialist, Johanna Mändar.
The Center of Registers and Information Systems (RIK), the IT agency of the Ministry of Justice and the Ministry of Digital Affairs, has been transforming into a specialized development center over the past two years. While its budget is smaller than that of several other state IT agencies — €15.3 million this year — it has a relatively large staff of 274 employees.
Torstenberg noted that RIK now has the full development capability in-house to manage and develop e-services for the justice and business environments. The agency oversees around 120 services and for larger projects, it occasionally engages external partners through public procurement.
"As a development center, RIK has significantly shifted its work profiles. The number of managerial and administrative roles has been reduced in recent years, while the share of software development and information security roles has increased to ensure the delivery of efficient development services," Torstenberg said.
A decade ago, RIK had 209 employees and a budget of €11.3 million. Two years ago, the agency's budget was somewhat higher at €19.2 million, but Torstenberg explained that this was due to the conclusion of a previous EU structural fund support period in 2023.
"As part of that program, disbursements amounted to €2,836,258. Since there are no annual external funding disbursements, this represents a significant additional resource," the Ministry of Justice adviser noted.
The smallest budget among state IT agencies belongs to the Environmental Ministry's IT Center (KEMIT), with a budget of €13.3 million this year. KEMIT focuses primarily on providing IT services to the Ministry of Climate.
KEMIT currently employs 101 people. Over the past decade, the number of employees has more than doubled and the budget has grown even more significantly. In 2015, KEMIT's budget was just €2.73 million.
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Editor: Marcus Turovski