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Digital changes 'could save councils £14.7 billion'

15/03/16

Report from Nesta and Public Service Transformation Network calls for wholesale changes in using digital technology by 2020

Local authorities could save £14.7 billion a year by going 'digital by default', according to newly published research.

Birmingham_Council_House_croppedInnovation charity Nesta and the Public Service Transformation Network, a group which promotes the integration of public services, have made the projection in their Connected Councils report.

It says they commissioned Social Finance, a not-for-profit financing organisation, to model likely cost increases from demographic change and project the level of savings from digitisation programmes.

Based on 'best in class' studies compiled by the Local Government Association and original case studies, it showed that if average savings could be replicated across councils it would save a unitary authority up to 13% of its budget by 2025. I

It says this is a conservative estimate based on leaving the fundamental business model unchanged, but if councils are more ambitious and carry out a wholesale shift towards digital channels for service delivery, the savings could go as high as 40%.

Benefits in outcomes

The report points to this as one of a number of benefits from stepping up the use of the digital, along with: better outcomes from earlier interventions; improving the way councils work internally, commission services and deal with problems; making services easier to access and more personalised; giving residents a greater role in decision-making; and supporting business start-ups.

The message is that there has been progress but it has not gone anywhere near far enough, and there is need for a series of policy changes. The report comes up with a number of recommendations for local and central government:

  • Councils become digital by default, moving all transactional services online and fully digitising their back offices by 2020.
  • The Cabinet Office should bring together key local government actors to define – and continuously update – open standards for data for the whole public sector.
  • Leading councils should get together to create a market for new digital products in cases where off-the-peg solutions are not meeting their needs.
  • City regions should be required to establish an Office of Data Analytics (ODA) as part of devolution settlements. The ODA – modelled on the Mayor’s Office of Data Analytics pioneered in New York City – should be tasked with helping city leaders and public bodies bring together and analyse data to support regional economic growth and local public sector reform.
  • Councils should invest in accessibility, by providing online and human navigation support to help people use digital services in public spaces, such as libraries and job centres. They should also ensure that pathways between different services are seamless, jargon free, and that people with different digital needs are appropriately ‘triaged’.
  • The Cabinet Office should review and publish detailed guidance on the ethical dimensions of data sharing and algorithm-supported decision-making.

These are bolstered in the report by a '2025 vision', in which the siloed services within councils will be replaced by multi-agency teams dealing with specific local challenges, the workforce is much more mobile, and almost all transactions take place online. Council websites will become less important as people make more use of third party apps for interactions, and to stream personalised content on local democracy, jobs and services.

There would be limits on this, notably in retaining face-to-face contact for social care, but digital tools could help people to manage their own long term conditions and connect with local networks. Other tools could help people become more involved in local decision-making.

Crossroads

Julie Simon, head of government innovation research at Nesta, said: "As budget cuts begin to bite councils have found themselves at a crossroads. Although digital technologies are by no means a silver bullet, they can help councils improve on the important services they offer; transforming their delivery, stimulating economic growth and ultimately improving the way they manage themselves and their resources.”

Image: Birmingham Council House, by G-Man, public domain through Wikimedia

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