Public sector digital transformation – Eddie Copeland’s predictions for 2016

Eddie Copeland, head of the technology policy unit at think tank Policy Exchange, takes a look at the year ahead for ICT in the public sector.

The arrival of December inevitably prompts reflections on the past year and predictions for the next. So what can be said of the world of public sector digital transformation? Several key developments that took place in 2015 point to what might be expected in 2016.

City devolution needs smart devolution

Progress on digital reform in local government has been disappointing in 2015.

Councils have been frustrated by a lack of engagement from central government. The March 2015 Budget gave the Government Digital Service (GDS) the remit to support local government. But other than some supportive noises, little tangible action has been observed since then.

The Department for Communities and Local Government (DCLG) Local Government Digital programme will be wrapped up in March 2016 (as was always planned), leaving local government without a cohesive digital voice in government.

And in the latest Spending Review, despite announcing £1.8bn digital investment in public services, the Government made no provision for local government to fund the digital platforms, skills and capacity necessary to redesign local services to be more efficient.

Even the £1bn allocated for health and social care integration will be directed through NHS England, preventing it from being used by local authorities to transform care services to target preventative action.

Rectifying this situation must be policy priority in 2016.

With GDS’s larger budget should come a clear responsibility to provide direct support and services to local authorities. There is also a major opportunity to spur large scale digital reform as part of the Government’s plans for city devolution.

If the new generation of elected city mayors are to deliver regional economic growth and better local services, they will need the tools to match their new powers. Many of those tools will involve harnessing data.

Cities will need to be able to join up, analyse and act upon data from across their city regions to identify the scale and location of the problems they seek to tackle and the service demand they aim to meet.

Data will be needed to reform public services, intelligently coordinating activity between different public sector partners and predicting and preventing problems from occurring before they become expensive to resolve.

And data will be required to monitor – and to report back to central government – the results achieved with devolved powers.

Currently, most cities lack any such capabilities. In 2016, the Government should therefore ensure that an integral part of its negotiations with each region concerns how they will put in place the digital and data tools those areas will need for city devolution to succeed. Exactly how such ‘smart devolution’ can be achieved will be subject of an upcoming Policy Exchange report.

GDS and the crisis that never was

Following the departure of Mike Bracken and several senior members of the Government Digital Service in October, it was widely expected that GDS would face a significant budget cut at the Spending Review. Instead, the Chancellor surprised everyone – GDS included – by announcing a significant increase in funding to £450m.

The move represents a welcome vote of confidence in the role that digital transformation will play in delivering more with less; a message recently endorsed by Sir Jeremy Heywood. It will also place greater pressure on GDS to deliver projects in 2016 that unambiguously save money. So what will those projects be?

If the 2010-2015 parliament was about fixing publishing (GOV.UK) and developing exemplar transactions, the next five years will be about developing Government as a Platform (GaaP) – common components such as a single payments engine that can be reused and reassembled to build different transactions.

Expect more components to be announced next year. If GaaP is to be genuinely useful to citizens and deliver significant savings to the public purse, it must be hoped that it will be co-developed with – and made available to – local government and the wider public sector as well.

As just one example, given that local authorities often know more about some of their most vulnerable citizens than any other organisation, it would be positive for councils to added as a trusted identity verifier for GOV.UK Verify.

2016 is also likely to see a further thawing of relations between Government and the IT sector.

The Government recently announced that it had beaten its own target for a quarter of all procurement spending to go to SMEs (the figure was 26.1% including direct and indirect spend).

It will need to work more collaboratively with private sector IT partners of all sizes if it is to deliver the scale and pace of digital transformation required.

Digital needs data

Of course, digital transformation is not just about technology. Policy Exchange has long argued that making smarter use of data is fundamental to delivering better services.

To date, most government work on data has focused on the provision of open data.

The UK regards itself as a world leader in this field, based on the fact it publishes more datasets on portals like than any other nation. But that is a poor measure. What matters is what that data is used to achieve.

It has therefore been pleasing to hear Matt Hancock recently stating the need for Government to be the primary consumer of its own data – “Dogfooding” as he delicately put it. Moving the Cabinet Office’s principal data team – led by Paul Maltby – into the GDS is a step in the right direction.

2016 may finally be the year when a serious start is made in using data analytics to drive efficiency in government services and improvements in policymaking.

Death of the self-assessment tax return

One of the most significant announcements of 2015 was the “death of the self assessment tax return”.

For anyone who has battled with the current online form on late January evenings, this was hugely welcome news. Instead of telling government details it already knows, digital accounts will be pre-populated with information on areas such as earnings, savings and pensions so that individuals and businesses simply have to confirm or add to the data shown.

By 2020 it is expected that small businesses will be able to connect their accounting software directly to HMRC via APIs, enabling real-time exchange of their financial details.

With 10m digital accounts expected to be activated in 2016, the change will be good for individuals and businesses, who can spend less time completing forms and have greater clarity on their total tax liabilities.

It will also benefit government, making tax collection easier and reducing the annual surge of demand around tax deadlines (this year, 980,000 people filed their return on 30 and 31 January alone).

Yet the importance of digital accounts goes far beyond just tax and HMRC. Successive UK governments have tried and failed with initiatives that use citizens’ personal data; recall the fierce media criticism of Care.Data.

Yet the very same media outlets applauded the advent of digital accounts, which entail intelligently matching citizens’ personal records across multiple different IT systems and organisations. What explains the difference?

I believe a major part of the explanation is that the benefits of digital accounts are immediate, direct and personal to the citizen. Contrast that with Care.Data whose benefits – though undoubtedly worthy – were long term, indirect and largely impersonal.

If the government can prove it can deliver this ambitious initiative effectively, expect it to become the new standard for how personal data projects are designed in many other public sector spheres.

Final note

Government and the wider UK public sector can look back on a busy year for all things digital, and be proud of many of the measures that have been put in place that can be built upon next year.

Many new initiatives will surely follow; not least with Martha Lane-Fox acting as a champion for digital reform in health services.

But if officials working on digital policy are looking for a New Year’s resolution for 2016, making sure that local government is not left behind should be top of the list.

Colin Marrs

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