There is no evidence that upgrading away from the latest fully patched versions of Internet Explorer to other browsers will make users more secure.
The statement does make it sound more like a budgetary decision, however:
Also, the cost-effectiveness of system upgrade depends on the circumstances of the individual department’s requirements.
It is not straightforward for HMG departments to upgrade IE versions on their systems. Upgrading these systems to IE8 can be a very large operation, taking weeks to test and roll out to all users. To test all the web applications currently used by HMG departments can take months at significant potential cost to the taxpayer. It is therefore more cost effective in many cases to continue to use IE6 and rely on other measures, such as firewalls and malware scanning software, to further protect public sector internet users.
So, that's that. If you want your website to be viewable within the metaphorical walls of Whitehall, you'd better do IE6 testing.
Further reading: Her Majesty's Government Response