Worsening skills shortages threaten government digital transformation, NAO finds

Auditors praise the ‘fresh approach’ of CDDO but warn that unit’s work across government could be compromised by access to expertise

The Central Digital and Data Office has been saluted for its ”fresh approach” to helping departments address longstanding digital transformation challenges, but worsening skills shortages are threatening the delivery of its goals, the National Audit Office has warned.

A report from the NAO commends the “stronger central function” of the CDDO, which was established in early 2021, and its three-year Transforming for a Digital Future roadmap published last year, which targets £1.1bn in tech-driven efficiency savings by 2025. However, the public-spending watchdog said intensifying recruitment challenges had left CDDO concerned that digital teams in departments would not have the skills and expertise to implement the six missions enshrined in the roadmap. One of those missions centres on delivering “digital skills at scale”.

It added that uncertainty about departmental permanent secretaries’ “continued and proactive involvement” in digital transformation was seen as a “significant risk” by CDDO.

The NAO report said only 4% of civil servants are digital professionals, compared with an average of between 8% and 12% in other sectors and that a major skills shortage was affecting the whole of the UK – with departments ill-placed to compete.

It said the number of government digital vacancies rose from 3,900 in April 2022 to 4,100 in October and that 37% of recruitment campaigns were unsuccessful.

The NAO report also suggested that in-house training initiatives are under pressure, with the number of digital, data and technology apprentices in the civil service dropping by 20% from 800 in October 2021 to 637 in December 2022.

“There is an unprecedented level of private sector demand in all industrial nations and a major digital skills shortage in the UK. People with digital skills command a premium in the market,” the report said. “In the public sector, pay levels do not attract the talent required for the scale of transformation needed in the UK. Recruitment is also fragmented across government.

The NAO acknowledged measures being taken to adapt pay frameworks for digital roles and improve the way DDaT jobs are described in recruitment campaigns to align them more closely with private-sector jobs. But it said the CDDO roadmap would “not fully address” the current skills gap or the government’s inability to recruit the external specialists required.

“Many believe the talent is simply not available in the marketplace to achieve the degree of transformation the government needs,” the report said. “If the current skills shortages persist, government may need to review what activities it can realistically achieve, given the skills it has or can acquire.”

General knowledge
The NAO also found that most digital change decisions in government are made by “generalist leaders who lack the expertise to fully comprehend and tackle digital challenges”.

It said that while the 2022-25 roadmap identified that the success of digital transformation programmes was dependent on senior leaders making informed decisions, progress on training initiatives was “limited”.

It said that to date, only around 200 non-specialist executives had received digital-awareness training against a target of 6,500 set in the roadmap.

The NAO said departments should build digital capability and support for non-specialist leaders to understand the issues posed by legacy data and systems. The report urges departments to appoint at least one non-executive director with digital, data and technology expertise and ensure that membership of senior decision-making boards includes at least one senior digital leader.

The report said CDDO recognised that there was a “high risk” that service transformation would not be sustained within departments without the support of senior leaders from outside the digital function. It said “continued and proactive involvement from permanent secretaries” was essential.

NAO head Gareth Davies commended CDDO for the change it had signalled in its first two years, but underscored the urgency of dealing with government’s DDaT skills challenges to progress with its roadmap.

“The creation of the Central Digital and Data Office provides fresh impetus for digital transformation across government,” he said. “Its roadmap is a good step towards addressing systemic issues and encouraging departments to take action. However, to maintain momentum, government needs stronger digital expertise and sustained support from senior departmental leaders Otherwise, these latest efforts will peter out and government will not achieve the savings and efficiencies that digital transformation has long promised.”

A government spokesperson said the number of digital, data and technology professionals in the civil service continued to grow, with headcount now approaching 26,000.

“We are putting digital at the heart of what we do, including by upskilling 90% of senior civil servants in digital, data and technology to ensure we can deliver in the digital age,” they said. “As the NAO report recognises, the CDDO is playing a leading role in delivering long-term digital transformation across government.”

Jim Dunton

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