Leaders want public sector to become ‘digital to the core’ to cope with challenges

Reports identify importance of technology skills to help meet service demand in spite of financial pressures

Credit: Gerd Altmann/Pixabay

Public-sector leaders have cited the importance of government becoming “data-led and digital to the core” to enable to continue to meet service demands while coping with spending cuts and the pressures of inflation.

According to this year’s annual State of the State report from think tank Reform and consultancy Deloitte – which surveyed 54 public-service leaders in recent weeks – organisations plan to become “data-led and effortlessly digital in everything they do over the coming years. To achieve this, they expect to see more data analysts, digital specialists and user-experience professionals in their workforces in the coming years, according to the report.

Reform interviewed a range of Whitehall permanent secretaries, local government leaders, NHS trust executives and politicians, a number of whom noted that the public sector’s physical estate is likely to change as well, with workplaces adapting to new technologies and hybrid working.

The think tank said some interviewees also expressed their desire for more services to move online so that resources can be diverted to vulnerable people.

“We’re about two spending reviews away from where government could be on data. We need to do this as an ecosystem and then it’ll pay for itself,” one senior civil servant said.

The report found that leaders want to see staff numbers come down – but also that they believe government’s duties should also be reduced.

All the interviewees agreed that the civil service workforce should shrink following the increase in headcount brought about by Brexit preparations and the Covid pandemic. Many of them said that Whitehall could be “substantially smaller”.

As well as reducing the size of government, leaders said they want public bodies to focus on what skills they are missing and how they can attract the talent they need to keep their organisations fully resourced. 

Less with less
The desire to see a reduction in civil service headcount did not come in isolation, but alongside a recognition that government should do less. Many interviewees said they wanted their organisations to become “sharper” or “more focused” by 2030. They argued that the state has expanded its scope in recent decades, and in some cases insourced functions that could be commissioned by the public sector rather than delivered by it directly.

“Government is asking a lot more of the civil service than 30 years ago. There’s a way through that but it is quite radical – we’d need to transfer a lot of what the government does. I’m running services that could be run by the private sector, but there’s no ministerial appetite to outsource,” one senior civil servant said.

Another said: “By 2030, I hope we’re connecting better with the private sector. It shouldn’t be about public versus private.”

However, none of the public sector leaders argued that frontline services should be “fundamentally privatised”, Reform said.

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“The consensus was that government’s impact would be greater if it focused on outcomes and leveraged others – whether within the public sector, in communities, or in the private and third sectors – for support, capacity and capability,” the report said.

One senior figure in the third sector said government needs to do much more to embed voluntary and non-government organisations in its policy thinking. Others talked about the possibilities of greater delivery through the private sector.

Government departments can also do more with less by working better together and with other public bodies, leaders said.

“There was a strong consensus that joined-up working across government departments and across local services would make a difference to their impact and value for taxpayers’ money,” the report said.

“This is a longstanding ambition not only within central government but across the sector, and its leaders recognise that it will not be realised without systemic changes to governance, funding or even a democratic rewiring of the state,” the report added.

Reform said the comments show the public sector “has never been more stretched, or more ambitious”. The think tank said the government needs to be clearer about what outcomes it wants, optimise its ability to deliver them and make choices about what it will and won’t do so it can focus on delivering “profoundly challenging programmes” such as levelling up and net zero.

‘Fat to cut’
Another think tank – the Institute for Government – published a report this month that concluded that the civil service has “genuine fat to cut” as part of the savings targets that will be set out in this month’s Autumn Budget: but digital should not be among the areas to be trimmed.

In a seeming endorsement of prime minister Rishi Sunak’s recent decision to junk his predecessors’ proposals for a headcount reduction of 91,000 staff across departments and agencies – equivalent to a 20% headcount cut – the new IfG report says No.10 should be helping departments invest to save and targeting poor performance.

But the report also encourages Sunak and chancellor Jeremy Hunt to be clear that a smaller civil service will be able to do less, and that “brave decisions” will need to be made about which activities need to stop.

Report author Alex Thomas, who is a programme director for policymaking and the civil service at the IfG – and a former senior civil servant – said the think tank’s best estimate was that roughly half of the growth in civil service headcount since 2016 involved new post-EU responsibilities.

However, Thomas said setting arbitrary targets for headcount reduction would have resulted in the loss of “talented, cheap, younger and mobile staff” while expensive, less-mobile and weaker performers stayed in post.

He added that it was also important for ministers to “send a clear signal” about the civil service roles that are most prized, and which they are keenest to retain. Digital and data specialists, scientists, engineers, analysts and project-delivery experts should be reassured that if they perform well their jobs are safe, Thomas said.

“Digital investment in particular must be protected to improve service provision and release genuine efficiency savings as staff can either be made redundant or reallocated to the jobs that only humans can do well,” he said.

The chancellor is due to deliver his Autumn Budget on 17 November.


Sam Trendall

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