More than 60% of public sector organisations have no dedicated internal communication budget or one that is very restricted, according to a new study.

Focused on the public sector, the 2011 State of the Sector survey was conducted by internal communication consultancy Gatehouse along with the Institute of Internal Communication (IoIC).

It found that over a third of respondents had no dedicated internal comms budget and a further 27% had less than £10,000 to spend on it – a figure that falls well short of the average in other sectors the researchers have studied. Despite the huge number of employees in the sector, half of respondents predicted that internal comms budgets will be cut further in the coming year.

Encouragingly, only 6% of organisations surveyed had no dedicated internal communications function while half had a team of between one and five communicators; 21% said there were more than 20 internal communicators.

Meanwhile, the research pointed to a number of other key challenges faced by communicators. Almost 60% of respondents rated understanding of organisational strategy as, at best, average – which suggests public sector employees are unclear and uncertain about the future. Nearly 40% of respondents identified reengaging employees as their number one professional challenge, with communicating strategy and direction a close second (30%) and communicating cost cutting ranking third (20%).

However, almost three quarters of respondents said senior management site visits were used to communicate with staff, which may suggest that organisations are adopting a more strategic approach to leadership communication.

IoIC chief executive Steve Doswell said: “It’s good to see face-to-face and leadership communication leading the way in the public sector, as despite all the developments in digital technology, these still lie at the heart of effective internal communication programmes.”