This blog first appeared on Policy Exchange’s PolicyBytes.
Just days into the New Year and the starting gun for campaigning for the next election has already been fired.
While the outcome in May is still far from certain, one thing seems sure: the economy and the future of public services will be at the heart of debate. As the parties slug it out to prove who offers the most plausible spending plans and the best reform ideas, the real impact for the public will be felt in how it affects the front-line services on which they depend.
Since 2010, the majority of government departments and the wider public sector have had to find considerable efficiencies as budgets have been frozen or cut. Taking the opportunity to embrace much-needed reform and rationalisation, they have largely coped admirably. The local government sector in particular is worthy of praise, given that central government funding for local authorities has been cut by 40 per cent over the period of this parliament. Yet according to the Local Government Association, though local authorities in England and Wales have already made more than £10 billion of savings, they still face a funding shortfall of £12.4 billion by 2020.
Whichever party wins the next election, further cuts are inevitable. Having made the obvious efficiency reforms they can, public sector organisations therefore face a choice: either they must stop delivering some services altogether or fundamentally redesign how they work. With smarter use of technology and data, they should aim to achieve the latter.
Given the pressing need to do more with less, it is not surprising that digital government has been in vogue over the course of this parliament. The creation of the Government Digital Service, GOV.UK, the Digital by Default standard, exemplar transactions and the Open Data Institute have been among the most significant measures taken. It was positive to see further digital initiatives outlined during the Efficiency and Reform Group’s plan for the next parliament that coincided with the 2014 Autumn Statement. Labour, too, highlighted the importance of digitally-enabled reform in “Making Digital Government Work for Everyone”, an independent report summarising the findings of a public consultation commissioned by shadow Cabinet Office minister, Chi Onwurah.
Yet if technology and data are really going to help public services cope with further cuts, three things need to happen under the next government.
1) Moving beyond the front face: Digital government is too often interpreted as being about creating websites, apps and online services that are easier for citizens to navigate and use. This idea is problematic in three ways.
First, it leads public sector organisations to focus almost entirely on their front face (i.e. their website and apps), rather than the processes that lie behind them. That is a mistake. Billions of pounds will not be saved through channel shift alone. Indeed, while money can be saved by giving citizens the information they require online (preventing the need for them to call or visit), offering better online transactions can actually increase costs by stimulating demand for services. Savings will only be made if the services themselves are redesigned to reduce demand on staff time and resources. Digital government cannot be about bolting new technology on to old ways of working.
Second, to deliver radical reform it is not sufficient to focus on any one aspect of the service, even the user. Though many commentators like to point out how Google and Amazon have been successful because of their relentless focus on the customer experience – and urge the public sector to emulate them – that is not the whole story. Those companies have been successful because every process, both internal and external, has been designed to be efficient. Focusing on only those that interact with citizens leads to the flawed idea that the hundreds of other internal processes do not need to be reformed.
Third, the tendency to think about digital transformation as primarily a technical or web issue can lead organisations to put their IT department in charge of delivering reform. If it is to mean anything at all, digital government is not primarily about IT but about wholesale organisational change. For that reason, it must involve all employees, from the most senior executives to the most junior of front line staff.
2) Interoperability and open standards: The delivery of many public services involves numerous different organisations working together (more than 30 can be involved in supporting a single troubled family). It is therefore concerning that central government, local authorities and other public sector organisations, from the Police to hospitals, are all undergoing their own digital transformations independently of one another, creating similar but sometimes incompatible solutions.
The single most important step to help the public sector work together more efficiently would be to implement open standards for data (commons schemas and formats for recording information) across the whole public sector. Open standards help break down the technical barriers that keep IT costs high, data siloed and public sector organisations from efficiently coordinating their resources by sharing data. The government has indicated its intention to ‘nominate a Government Chief Data Officer to define data standards for the public sector’. They should do so in May, and make sure the first post-holder works together with representatives from local government, central government departments, other public sector bodies and industry to define standards that are proven to work in the field.
3) Collaborative working and shared budgets: If public sector organisations really wish to move to a more efficient model, they must focus on tackling failure before it happens, driving down demand for their services before it is created. Prevention is better than cure. The case study of the Mayor’s Office of Data Analytics (MODA) in New York City has demonstrated that by correlating datasets from numerous different departments and agencies across a city, problems can be predicted – and preventative action taken – before they escalate in severity and cost. MODA’s work has led to efficiency increases of up to 500% in some public services.
UK cities should be strongly encouraged to develop a similar approach. However, there will be little point in establishing Offices of Data Analytics in this country if the insights they derive cannot be used to deliver real efficiencies. This will only be possible if public sector organisations have the budget flexibility to reassign their resources to focus on preventative action. This has traditionally not been possible due to ring-fenced budget allocations, particularly in local government. But a new model has recently been trialled that offers to change that.
Since 2012, pilots for Whole Place Community Budgets have taken place in Essex, Greater Manchester, the Tri-borough (Westminster City Council, Hammersmith and Fulham Borough Council, and Kensington and Chelsea Borough Council) and West Cheshire. The idea is that public sector organisations based in each area work together, redesigning services from the ground up and sharing budgets to tackle problems jointly. Currently, many public sector bodies are not incentivised to invest in preventative action, as the savings that would result from doing so would be felt only by other organisations. By sharing budgets, there is an incentive for all participating bodies to work in the most joined up and efficient manner, designing local solutions for local people. Independent analysis by Ernst & Young suggests that savings of between £9.4 billion to £20.6 billion could be achieved over 5 years were the pilots’ proposals for reform adopted across the country. By using data insights to design better ways of working, Whole Place Community Budgets could become the gold standard for digital government. The next government should seek to seek to accelerate their roll out in the next parliament.
Though the main three political parties are all taking greater interest in digitally-enabled reform, digital government sadly remains a niche interest: the concern of back office officials and a mere dozen or so MPs. It is true that technology-based reform of government services is not the stuff of retail politics. But against the two-dimensional campaign narrative of further investment verses cuts, the electorate deserves to know that there is an alternative.
Follow Eddie Copeland on Twitter @EddieACopeland