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Spending Review: who gets the digital money?



Chancellor provides funds for GDS, HMRC, healthcare IT, border controls and emergency services, but nothing for local government

The Government Digital Service (GDS) has emerged as one of the winners in the government’s Spending Review, with the promise of a substantial boost in its funding and a reiteration of the belief in some of its major programmes.

Funds have also been provided for programmes on digitising tax collection, healthcare information, border controls, supporting mobile technology in the emergency services, and using technology in the rehabilitation of prisoners. But there is nothing specific to support local government’s digitisation efforts in the settlement.

Chancellor George Osborne (pictured) said that overall the government is making £1.8 billion available to support the digital transformation of services over the next five years, citing it as one of the steps towards improving the productivity of the state.


This includes £450 million for the GDS, coming at a time when the core budget of the Cabinet Office, within which it sits, will be subject to a 26% reduction and the overall cost of Whitehall administration is being cut by £1.9 billion for the period.

The Blue Book of the Spending Review indicates that the government is maintaining strong support for at least three of the key programmes run by the GDS: Common Technology Services for the Civil Service; Government as a Platform; and GOV.UK Verify. They are set to benefit from shares of the £282 million of resource funding and up to £90 million in capital funds by 2019-20 for cross-government digital and property programmes.

The document highlights the work on the GOV.UK Pay platform, which has the potential to replace hundreds of different systems, and says the government has an ambition for people to have an option of paying online for any public service by 2020.


Osborne also emphasised the ambition to digitise the tax service as part of his speech to Parliament. This involves the provision of £1.3 billion to HM Revenue & Customs (HMRC) to invest in relevant programmes, which will include the development of free apps and software that link to its systems and support for those who need help using the technology.

“We’re going to build one of the most digitally advanced tax administrations in the world,” he said. “So that every individual and every small business will have their own digital tax account by the end of the decade in order to manage their tax online.”

This is aimed at ensuring that by 2020 most people will be able to keep track of their tax digitally and update HMRC every quarter.

The government has strong ambitions for what this could achieve. They include the ability to pull in an extra £1 billion in tax revenues by reducing errors, and efficiency savings through cutting the number of calls from 38 million to 15 million per year by giving customers all the information they need online.

Savings through digitisation in the department are projected at £1.9 billion over the Spending Review period.

Another ambition is to ensure that by April 2019 HMRC will ensure that capital gains tax is paid within 30 days of the completion of the sale of any residential property.


The government has reiterated the longstanding aim to improve the quality of information available to healthcare clinicians, and said it will pump £1 billion into the relevant technology over the next five years.

Among its aims for the sector are that by September 2018, 80% of clinicians will have digital access to key patient information, and 2020 every health and care professional will be able to use integrated records.

In addition, it is planning to invest £10 million in expanding the Healthcare Innovation Testbed, with a site in every region to support the development of new digital technologies.

Emergency services

Almost £1bn will be made available for the next generation 4G communications network for the emergency services.

The Blue Book emphasises of the importance of this move to accessing police databases and supporting the use of mobile fingerprinting, electronic witness statements and live streaming from body-worn video cameras; and says that when it is all operational it will help to save about £1 million per day.

In addition, there will be support for fire and rescue services with £74 million going through the Department for Communities and Local Government’s (CLG) Emergency Services Communications Programme.

Prison Service

A slice of the £1.3 billion going into the Prison Service estate will be earmarked for technology to support prisoner rehabilitation, and video conferencing suites that will make it possible for cases to be heard without transporting the defendant to court. The blue book estimates that this could be used for up to 90,000 bail hearings a year.

There will also be investment in technology such as body scanners and mobile phone blockers.


Efforts to fully digitise the courts will be backed with an investment of more than £700 million, aimed at moving from a paper-based to an online system. Reducing the need for pre-trial hearings, and cutting down on the time spent on hearings and administrative tasks are forecast to combine with a rationalisation of court estate to provide savings of about £200 million per year from 2019-20.


Moves to tighten up on border and immigration controls will involve the provision of £130 million for watchlist and intelligence technology to target criminals, illegal migrants and illicit freight. There will also be an investment of £250 million to overhaul the passport and immigration system, including the installation of e-passport gates.

Cyber defence

As previously announced, the government is making £1.9 billion available to strengthen the country’s cyber defences over the next five years. This will include the development of a National Cyber Centre.


Although the amount is not specified, the Blue Book says there will be a real terms increase in spending on Access to Work, which includes providing specialist IT equipment to help disabled people find employment.


It also outlines a number of programmes to be pursued from the Public Sector Efficiency Challenge, which was launched in August and asked public sector workers for suggestions on how to do more with less. These include:

  • Increasing digital communications from Companies House, with a voluntary system for companies to receive notices by digital channels.
  • Introducing a live webchat facility to answer queries about benefit claims.
  • Replacing paper payslips in central government with digital slips.
  • Increasing the number of patients booking GP appointments online.
  • Opening up more government data.

Local government absence

But it is notable that no money has been made available to support local government’s digital programmes. The only digital references relevant to the DCLG are the funding for the fire services’ communications programme, and that it will work with the Valuation Office Agency to digitise the collection of local taxes.

It is part of an overall scenario in which central government support for local authorities is to be reduced, a move which prompted a protest from the Local Government Association.

Lord Porter, the organisation’s chairman, said it amounted to a £4.1 billion cut over the period, on top of almost £10 billion in “demand-led cost pressures facing councils”.

"It is wrong that the services our local communities rely on will face deeper cuts than the rest of the public sector yet again and for local taxpayers to be left to pick up the bill for new government policies without any additional funding,” he said.

But there was a more positive response from IT industry association techUK, whose chief executive Julian David welcomed the news on digitising tax and the investment in the GDS.

Industry reaction

“TechUK welcomes the chancellor’s commitment to make the UK the most digitally advanced tax administration in the world,” he said. “As we have seen from online self-assessment – technology can be a huge help for citizens and companies that have to navigate the UK’s complex taxation system.  

“The news of investing £1.8 billion in digital transformation, including an increased budget of £450m for the Government Digital Service is welcome evidence of the government’s commitment to digital transformation. Government and industry must work closely together to bring innovation to government.”

There was a more guarded welcome from the Confederation of British Industry, who suggested that the investment by itself would not be enough.

Its director general, Carolyn Fairbairn, said: “Public services underpin productivity and prosperity. With the population ageing and expecting more from public services, extra investment must be matched by transformational reform, such as making more use of digital transactions, to have a sustainable impact.”

Image from GOV.UK, Open Government Licence v3.0







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