BUSINESS BYTES

Forget digital bean-counting: let’s go after the golden goose

  • Posted 1 year ago
  • 2 min read

Since 2010 government has attempted to reduce its operating costs with a sweeping programme of public sector reform, with digitisation at the heart. Many claims have been made about the potential of digital government, and I’d like to argue that 2016 – a year of political tumult for the UK - is the right time to re-examine these claims. 

Most of us understand the logic of channel-shift; it seems a reasonable assumption that digital systems should be cheaper to operate than paper-based systems. But when we factor in development costs, transition costs, and the unforeseen costs of failing or late-running projects, evidence of genuine savings – that could be used to pay for better services – can be thin on the ground. 

Indeed, digital may disappoint – badly. Just look at the Rural Payments Agency’s digital CAP service, which was meant to make claims easier for farmers but due to technical failure created huge inconvenience and late payments, as well as unforeseen costs for the RPA itself. 

Business cases built on the assumption that digital projects will pay for themselves are simply asking for trouble, particularly when savings are pencilled in immediately.  I’ve seen one example in which it would take 18 years to pay off the initial outlay, and some digital projects have unforeseen consequences which create direct financial losses – just look at the DVLA’s controversial digital vehicle tax. 

The other sobering lesson of most big government IT projects is that transactional systems tend to set government policy in concrete. Change can be so slow and expensive that, by the time it has been delivered, the world has moved on and the new policy is obsolete. By the time Universal Credit is finally delivered, the policy will be at least 11 years old and on its third government; who knows what U-turns on welfare policy will have been performed by then? 

On top of these existing challenges, Brexit complicates life for many public sector CTOs and CDOs. Government policy on everything from devolution to borders to farm payments could be up in the air for years. Digital and technology projects linked to policy will have to wait for a clearer picture. Brexit is likely to have a negative short term impact on the economy as a whole, as both public and private sector leaders delay investment decisions. 

In this time of uncertainty, therefore, the role of public sector technology could and should be more positive than simply promising cost savings that may never materialise.  Government should be asking which digital projects and reforms are good in themselves. 

Local government has always recognised the strategic importance of procurement that supports local economic value, rather than just the lowest price. Projects which create new open datasets or APIs as a by-product could spur social or business innovation, and improve transparency, for example. 

Well designed digital systems can save citizens and businesses time and money, reduce stress and improve access to services. Unfortunately, the opposite is also true. Which is another reason why politicians and policymakers cannot continue to regard technology as peripheral to the job of governing.