Digital Strategy - Policy brief

The Government has the ambition to make the UK a science and technology superpower and to prioritise economic growth. As 99.9 per cent of private sector companies in the UK are small and medium-sized enterprises (SMEs), these ambitions begin locally. As leaders of place and with local government annual spending totalling over £70 billion, digitalised councils are best placed to unlock and lead digitally driven economic growth in their local economies through prioritising innovation, investment, and digital skills development for local businesses. In their leadership role, councils also ensure that digitally driven economic growth is as inclusive as possible and that all have access to the opportunities that digitalisation offers.

The data councils hold also play a crucial role in designing, delivering, and transforming public services to improve outcomes and drive efficiencies. Opening up and sharing data can drive innovation in local digital economies, provided it is done ethically and responsibly, protecting residents’ rights.

For more information, guidance and support on the use of digital to drive local economic growth, please see the LGA’s Economic Growth Support Hub. For more information on procurement guidelines for public authorities, see the Cabinet Office’s Digital, Data, and Technology (DDaT) Playbook which the Local Government Association is currently supporting the update of. Please also see the government’s ten design principles, the Service Standard and the Technology Code of Practice

Objectives

• To strengthen the UK’s position as a global Science and Tech Superpower (as stated as an objective in Global Britain in a Competitive Age: The Integrated Review of Security, Defence, Development and Foreign Policy, 2021) and strengthen the UK’s digital economy.
• Estimates commissioned by the government suggest that an approach to supporting and strengthening the digital economy could grow the UK tech sector’s annual gross value added by an additional £41.5 billion by 2025, creating 678,000 jobs.

There are five pillars to the strategy:

• Robust digital infrastructure: the strategy recognises that every part of the UK needs world-class, secure digital infrastructure to allow people to access the connectivity and services they need (mission four in the Government’s Levelling Up White Paper). The department has a target of 85% gigabit coverage by 2025 and 99% by 2030. With 92% of the UK landmass currently covered by a good 4G signal, the ambition is that most of the population will have access to a 5G signal by 2027 
• Unlocking the power of data: the Government published a National Data Strategy for how the UK could best take advantage of data’s role in innovation and economic growth. The Government is also planning to bring forward primary legislation to reform the UK’s current General Data Protection Regulation (GDPR) regime. Enabling digital identities is also critical to unlocking wider opportunities, allowing public bodies to share data with organisations which follow the rules of the UK Digital Identity and Attributes Trust Framework.
• Light touch pro-innovation regulatory framework: the Government published a Plan for Digital Regulation which committed the government to a forward-looking and coherent regulatory approach for digital technologies. The government is also committed to bolstering digital inclusion by protecting people from mis/disinformation through the Online Safety Bill and strengthening online media literacy through the Online Media Literacy Strategy.
• Secure digital economy: the government is placing security at the heart of the approach because without it, there is a risk that progress, and innovation are undermined. Since 2020, the Department for levelling up, Housing and Communities has run a programme to help local councils improve their cyber resilience – supporting over 120 councils and distributing more than £ 13.9 million in grant funding to address cyber security vulnerabilities. The government is working to ensure Connected Places (‘smart cities’) technology is adopted securely to safeguard data.

The government is supporting universities to develop new ideas and technologies, increasing research and development spending to £20 billion by 2024/25. The government is also committed to incentivising businesses to innovate and to recognise that innovation rarely happens in isolation; networks of information, knowledge and skills are needed.

The digital skills gap is estimated to cost the UK economy £63 billion per year in lost potential gross domestic product and is expected to widen. The government is improving digital skills education in schools and broadening opportunities in universities. Lifelong digital skills are also a vital component of the strategy to address digital exclusion. According to Lloyds Essential Digital Skills Report (2021), around 11.8 million adults in the UK are online but lack the essential digital skills for work.

The UK raised £27.4 billion in private capital in 2021, more than any other European country. The strategy lays out how that success can be built on, including through a mix of tax incentives and funds for early-stage seed and scale-up investment. The Government has funded the organisation Tech Nation, a growth platform providing dedicated support to tech start-ups and scale-ups.

• SMEs adopting digital technologies can make up to 25% productivity gains. DCMS supported the development and launch of Digital Boost, which matches small businesses and charities with a network of digital experts willing to offer pro-bono 1:1 mentoring.
• Improving public services through the ethical use of digital and data is also a vital aspect of the strategy, such as the One Login for Government and the introduction of a Digital Identity. The Cabinet Office’s Algorithmic Transparency Standard and the Data Standards Authority govern the ethical use of artificial intelligence (AI) and data.
• Procurement is also a significant driver to support smaller businesses and encourage innovation. Public sector procurement amounts to £300 billion annually, of which local government spending accounts for £70 billion. Policies such as the Digital, Data and Technology (DDaT) Playbook set out plans to help enable innovative approaches to public service procurement and improve efficiency in our commercial processes around DDaT procurement.
• The Government’s digital ecosystem report identified several regions as digital and tech growth hubs across the UK. Strengthening these regional digital ecosystems could grow the digital sector’s gross value added by an additional £ 41.5 billion by 2025. In 2022, the government released £ 2.6 billion of localised funding through the UK Shared Prosperity Fund. As well as developing digital connectivity, digital skills and access are essential, and Local Skills Partnerships are a way to address this.
• The UK’s global leadership in digital and data provides a solid foundation to address challenges posed by climate change, and digital, and data initiatives can aid decarbonisation. The UK must also continue to support work to reduce the carbon impact of digital technologies, smart devices, and data.

The government is committed to ensuring opportunities posed by the development of digital technologies are governed effectively to strengthen prosperity and security. This includes leading and participating in global partnerships, such as organising the Future Tech Forum in 2021, founding partner of the Global Partnership on Artificial Intelligence (GPAI) and playing a leading role in developing Organisation for Economic Co-operation and Development (OECD) AI Principles. The UK government is now a member of the UN agency International Telecommunication Union (ITU) Council, advocating for worldwide connectivity and bridging the global digital divide.