2015 spending review predictions

Jos Creese takes a look at what local government ICT professionals can expect from next week’s spending review.

On 25 November the government Comprehensive Spending Review will be published.

Speculating about a government announcement just before it is made is always dangerous because everyone will remember what you said. But like weather forecasting, whether right or wrong, predictions and speculation helps us to prepare.

There is at least one certainty: government spending will continue to fall and the impact public delivery will be profound – far more so than anything we have seen so far.

But what does this mean for the way we use IT in local government? Here are my predictions:

1. Reform in health and social care

These services will be central. They are the biggest local service spend areas and also where reform is most needed to meet changing needs. The NHS spends around £127bn each year, and unlocking savings depends on social care doing more, as well as a new culture around how we manage and share health data. IT will have a key role to join up what is currently a highly dispersed and inefficient model and to update the outdated NHS administration systems, which hold back clinical progress.

2. Assets will be in the firing line

Local public services own a significant proportion of real estate in our towns. This asset is under-utilised, with vacant properties which could be shared. Duplicate IT infrastructure often serves public service buildings, which run under different contracts, administered individually. Rationalisation depends on an open data register of public sector assets – who uses them, contractual terms and more – with shared IT infrastructure.

3. The pace of devolution will increase

Whitehall seems committed (at last) to move money and accountability to a local level. This includes devolution to regions and cities, as well as decentralisation of responsibility to councils more generally. Those councils who just see this as a way to secure more power and resources may need to think again: it will have strings attached – mostly in terms of government policy targets, but also in terms of hard cash savings and new democratic models (more mayors, for example). There will also be more to do and less to spend overall. The only way this can work will be through digital means: effective use of data and systems, shared services joined up at the point of delivery, digitally mediated access.

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4. Sharing more to save more

Local government still seems largely uncomfortable with sharing, even with neighbouring public services. But the current insularity is inefficient and unsustainable in the face of devolution, let alone further cuts. Smaller public services who may still think it’s practical to run an insourced IT team, or who simply outsource everything to one provider in a long contract, will need to reconsider. Politicians must allow IT teams to collaborate and integrate across councils.

5. More outsourcing is inevitable

Why? Because large parts of the public sector have simply been inept at delivering radical change for themselves. There is willingness to change but the ability to actually do it is too slow and limited. The private sector will have to change too, in order to restore trust after the various failed, expensive, inflexible large-scale outsourcing and PFI experiments of the last two decades. Cloud models will be key to this, offering a more flexible and lower cost delivery platform. Local government IT leaders must work out how they can exploit Cloud, not just why it is too risky to do so.

6. ‘Digital’ will continue drive change

Digital will be mainly a means of reducing cost, not primarily improving services. Specific areas will see more cash – security, consolidated infrastructure, a continued pursuing of the Government Digital Service vision – but ‘digital’ is going to have to work harder to prove it’s worth. This means improved spending behaviours: better control of IT budgets, better targeted to save money, less long-term large-scale lock-ins to out-of-date ‘big’ IT solutions. Councils need to understand what a digital operating model means for their services.

7. Access to talent

The public sector desperately needs experienced professionals to help with change and to lead digital programmes. Holding down pay could prove a false economy, especially as private sector wage growth picks up. This could lead to problems with recruiting and retaining the people needed to drive change, whilst pushing up spend and dependence on contractors and consultants.

No doubt I will be wrong in some of the details, but would be surprised if the spending announcements don’t chime with these seven themes.

Jos Creese, is principal analyst for the Eduserv Executive Briefing Programme which aims to support senior executives in local government with insight and knowledge to support technology-led change in their organisations.

Colin Marrs

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