This chapter considers the key characteristics of cloud computing, which is defined as a scalable network infrastructure where consumers receive IT services such as software applications and data storage through the Internet on a subscription basis. It reviews what are considered to be the general benefits to client organisations of utilizing cloud supplied IT services. These include long-term cost savings, simpler client owned IT infrastructure and reduced energy consumption through utilisation of more efficient supply-side infrastructure. The chapter then focuses on the potential for use of cloud based services in Central and local government in the UK, and to what extent these are already being considered. As part of this appraisal by government, concerns have been raised over issues such as security, access, data protection and ownership, and this chapter seeks to interrogate the perceived positive and negative drivers to local government cloud utilisation using a conceptual framework and case studies of four London borough councils. It reveals that the concept of cloud computing is new and not clearly understood within UK local government. Local authorities, who face further cuts in government funding despite the wider economic recovery, welcome a cloud-based IT infrastructure which may lead to considerable savings. Yet government is institutionally conservative with a risk-adverse attitude, so local authorities are more likely to adopt a hybrid approach to the implementation of cloud computing strategies. Concerns over data security and privacy may be overcome through careful compliance with relevant laws and standards.