The State of Digital Government Review, the case for change underpinning the Blueprint, identified over £45 billion per year, 4-7 per cent of public sector spend, in unrealised savings and productivity gains the public sector could make by utilising the £26 billion annual spend on technology and staffing more effectively.
As acknowledged in our State of Digital Local Government (SDLG) response, it is particularly challenging to assess the current state of digital transformation in local government, given the diversity of experience, resources and lack of consistent data collection on digital transformation and technology estates. Yet, in this review we have seen a comprehensive assessment of the state of the sector and welcome the findings which reflect the opportunities and challenges that the local government digital community is facing every day when seeking to build the next generation of public services.
As the review highlights, satisfaction with public services is dropping, productivity has fallen and the public sector is facing a number of challenges and opportunities related to service delivery, technology infrastructure, data access, centralised co-ordination, skills and in the supply chain. While the review showcases the challenges councils experience are not novel to the sector, specific recognition is given to the independent and pronounced challenges that councils are facing and calls for digital reform to address them, these challenges include:
- Market concentration: some services are highly concentrated with a small number of suppliers dominating the market which without appropriate mitigations can often lead to higher prices, greater barriers for SME entry, lower levels of innovative products, and a lack of data and system interoperability that enables digital transformation.
- Digital resourcing: local government has the lowest proportion of digital and data professionals in the workforce.
- Supply chain dependency: due to a lower proportion of digital and data professionals there is an increasing dependency on outsourcing and a concentration supply chain, challenging compliance assurance.
- Cloud adoption: is lower in local government than central government due to a lack of capacity and skills.
- Sector fragmentation: the inherent structure of local government increases fragmentation of talent buying and systems.
- Citizen proximity and digital inclusion: there is a particular need to ensure services are inclusive as local government services feature so prominently in citizen lives.
Innovative and sustainable solutions are needed to address the identified issues facing digital transformation and deployment across the country. Local government stands ready, with our experience, expertise, and connections to communities, to work with Central Government and the private and voluntary sectors to deliver them.
Services
The review finds that public sector services are under-digitised, and whilst councils and the wider public sector are making it easier for residents to access services and engage with their council online, overall digital services are not keeping pace with the rising citizen expectations driven by private sector standards. This is in part, the review cites, due to the fragmented nature of the public sector and archaic UK policy, such as the need for physical signatures. Overall, the review finds these missed opportunities are hindering productivity, life standards and the ability for public sector authorities like councils to prioritise communities effectively.
Technology
It is outlined in the review that spending on technology in the public sector is well below peers with council funding shortfalls identified as the most pronounced. The impact of which is increased costs and a sector heavily reliant on maintaining legacy systems. The cautious approach to spending on technology the review finds is hindering the adoption of emerging technology such as AI, holding back gains in automation, productivity and service delivery across the sector. In addition, the fragmented nature of the public sector, something we see within and between councils, is creating inefficiencies, with many organisations lacking standard integration frameworks and resulting in the need for costly bespoke point-to-point integration.
To add to this, the review finds that while cloud adoption has been well taken up by central government, other public sector bodies are not keeping pace. Councils in particular have low levels of cloud adoption, due in part the review finds to lack of skills and capacity. Those that have adopted a cloud first approach are increasingly reliant on 1 to 2 providers the review finds, increasing risk and something the review notes needs to be addressed by central government.
The review also finds that under-investment, the duplicative and inefficient technology landscape, and increased risk from cloud servers is driving increasing cyber risks. As is being experienced by councils across the country, cyber risk and attacks on the public sector are growing. The review concludes that the public sector is under-prepared for the current and evolving threats, and that the lack of co-ordinated effort to support and tackle this issue is hindering resolve to deal with incidents.
Data and AI
The review finds that councils have some of the lowest maturity in the public sector for using and managing data, in part due to technical limitations, risk averse cultures, unclear regulations, and different governance standards. This is replicated across the public sector and is not helped by strong sense of data ownership and reluctance to aggregate personal data. As the review recognises, work and legislative frameworks to tackle these problems have had limited impact. Despite examples the review lists, public sector data remains underutilised holding back AI, machine learning and advanced analytics potential.
Central and shared capabilities
The review highlights how various attempts have been made to drive digital transformation in the public sector through central teams and shared capability. While these efforts have had impact, they have been focused on specific areas within the sector rather than on the broader public service reform. For example, the review points to the success of the Service Standard in supporting performance across 75 priority service areas run and administered by central government. Our own research into the use of a common service standard across local government shows that adoption is inconsistent due to various barriers. Our ongoing research will inform a series of recommendations for promoting and supporting the wider adoption of a common service standard that works across local government.
People leadership and skills
Highlighted in the review is the stark figure that only 2 per cent of council workforces across the country are digital and data professionals the lowest in all the public sector. The review notes that there is a consistent lack of digital skills in the whole sector, and the sector lacks training, and leadership needed to sufficiently deliver tech enabled programmes. Simply digital leadership and skills are not a priority. As a result, findings suggest that the public sector is not an attractive place to work for digital or data specialists due to dissatisfaction with pay, career progression, long tenure.
Digital Supply Chain
The public sector digital supply chain the review finds has not evolved to the modern technology market. Across the public sector it notes, organisations are heavily reliant on external providers to support digital and data capabilities, have not adopted co-ordinated digital sourcing strategies, and funding for digital is not up to date with the sustained investment needed for supporting subscription-based services such as SaaS and Cloud, or funding continuous improvement of tech-estates, instead favouring new programmes and priorities.
Root causes
The review identifies 5 root causes of its findings and challenges to public sector digital reform these are:
- Leadership: There is a lack of incentive for prioritising digital services, reliability, or risk mitigation. Leaders are not rewarded for focusing on these aspects.
- Structure: The public sector is fragmented, making it difficult for organisations to collaborate and share resources.
- Measurement: There is no consistent way to measure digital performance across the public sector.
- Talent: The public sector cannot compete with the private sector in terms of compensation and career progression, especially for senior leaders.
- Funding: There is a lack of funding necessary to invest in digital transformation