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Digital capabilities exchange 'could save £35 billion in 10 years'

25/01/16

Former Cabinet Office adviser Mark Thompson says marketplace would provide building blocks for digital-first operations

A high profile academic and digital strategy consultant has called on government to set up a centrally-hosted online resource for local and central government bodies to share digital capabilities, following Digital Economy Minister Ed Vaizey MP’s public call for ideas to feed into the UK Digital Strategy. 

The exchange would be based on a new transparent approach to providing service outcomes, in which all local and central government bodies worked from the same methodology, ‘in the open’ and shared capabilities, so government can “see itself in the same way everywhere.”

Such an opMark_Thompsoneration could save the public sector up to £35 billion within the next 10 years.

The suggestions come from Dr Mark Thompson, senior lecturer at Cambridge Judge Business School and strategy director at digital service consultancy Methods Group in an article published on professional social network LinkedIn this week. In recent years Thompson has been a senior adviser to the Cabinet Office and writtten white papers, policy documents and a parliamentary report on behalf of government.

Same language

Addressing Vaizey directly, Thompson writes in the article titled ‘Government cannot digitise unless it speaks the same language’: “We need to become modular, interoperable, consumption and co-creation based and open. We cannot do these things until we are operating from the same principles; until everyone can see what everyone else is doing, and join in.”

Thompson also points to a previous article he wrote which says government needs to respond much more aggressively to “the shared plumbing of the web.” He suggests there is a need "to be prepared to act socially, to share and consume to achieve these aims by standardising. To standardise, it needs to see itself in the same way, everywhere.” 

To achieve these goals, he proposes that government establishes “a central exchange for common capabilities” for all government bodies to help each other map their services. The 'capability exchange' would be a “marketplace in which government can evolve its own standard building blocks to facilitate the delivery of cheap, simple, low risk, digital-first operating models,” Thompson writes.

“It will allow departments, agencies and local authorities to manage themselves without top-down, GDS style control and service supply.”

In this way, Thompson believes that all government organisations will be able to track back to a chain of capabilities that sits behind each service they provide. These maps would then be published so that others could openly see “the efficiency of service supply” and to expose any instances of duplication.  

Unifying efficiencies

He suggests that the Government allocate seed investment to store, display and maintain these 'capability maps' via a national portal on GOV.UK, openly accessible by government and the market. To kickstart the approach, the Government should target the UK’s 433 local authorities, since the sector has “the highest levels of duplication and redundant capabilities”.

Among other ideas to boost sector efficiency and reduce cost, Thompson writes that government bodies could follow in the footsteps of the private sector by using affordable, easy-to-deploy, flexible digital services for data storage (Dropbox, AWS etc), payment platforms (PayPal, Google Wallet etc) and customer relationship management tools (Salesforce, MSDynamics etc) which “can be plugged into a business within hours.” 

The opportunity is huge: "Government might reduce the number of agencies, slim down departments to become lean policy and governance hubs, and even integrate local services (such as health, social care and local government)."

This would effectively reduce the number of agencies and make departments “lean policy and governance hubs” he writes, as well as eliminating the need for large contracts with giant IT firms.

Need to be bold

“We have learned that websites and bespoke government technology do not in themselves move the UK towards a more digital future, because the underlying business stays the same,” he writes.

“We need to be bolder. We can do so cheaply and in a way that lets everyone take their own decisions, but still behave as an organic whole. Like a digital organisation, we need to share capabilities.”

In the accompanying paper, 'Sharing Digital Capabilities Across Government', Thompson estimates that the financial benefits of his proposed model could exceed £35 billion per year savings within 10 years. He quotes a recent study he conducted with Department for Communities and Local Government and the Local Government Association examining payments, licensing and ID-checking in English local authorities (representing just 1% of council spending). It calculated nearly £200 million in savings in the current parliament by moving away from legacy, bespoke models to commodity shared digital solutions.

The estimated cost of establishing the capability to deliver these savings is an initial £10 million in capital expenditure and £4 million per annum operatonal expenditure.

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