Discord over £1.2m channel-shift saving claim

Seven years after the UK achieved its target of e-enabling government transactions, local authorities are still missing out on big e-government savings, a new study claims. The analysis, published by GOSS Interactive, a supplier of content-management systems, claims that "the average" UK local authority could save £1.2 million over three years by moving just 40% of service transactions online.

However the IT management association Socitm cautioned against accepting the estimate at face value.

GOSS published its analysis, supported by Plymouth University, in the week the government set out a new drive for "digital by default" public services.

A press release said that e-transactions could save the UK public sector over £500 million. "These savings could pay for approximately 5,000 additional nurses each year, or the building of 18 new secondary schools or cover the government's annual cost for 168,000 apprenticeships for young people."

The figure is based on the estimate that handling business online can be 98% cheaper than providing services via face-to-face interactions and over 94% cheaper than by telephone. The study quotes Socitm estimates that each face to face transaction costs £8.62 while an online transaction only 15p. "With a typical local authority delivering more than one million face-to-face and telephone interactions each year, just moving 40% of these to the internet over three years would save in excess of £1.2 million for each local authority."

To promote the idea, GOSS Interactive engaged Plymouth University to run a competition for students to design an online return-on-investment calculator. The money savings calculator allows organisations to visualise how much money they can save over three years by moving face-to-face and telephone interactions online. This competition is part of an ongoing partnership between GOSS and Plymouth University.

However Socitm's consultancy arm, Socitm Insight, rang alarm bells. While "pleased to see the issue of channel shift being raised" it pointed out that "opportunities for savings from channel shift, and how to calculate them, are complex and more so than might be inferred from their press release".

It said issues include:

- Variations in the budgets of local authorities, the size of the populations served and the different services provided by single tier and two tier councils
- Data about volumes of calls and visits received by local authorities: "we believe volumes are not as high as stated", Socitm Insight said.
- The difference between the cost of handling enquiries and the cost of delivering services

"These make calculating potential savings from channel shift much more difficult than GOSS's press release could be taken to suggest."

http://www.gossinteractive.com/calculator