IfG urges May to back digital services to unlock £2bn savings

31 Oct 16

The government could save as much as £2bn by 2020 by digitising services and transactions but progress is being held back by a lack of political drive from the top, including from prime minister Theresa May, according to the Institute for Government.

In a report released today, the think-tank said some parts of the government were beginning to see success after moving standard services online.

For example, the DVLA reported a £78m (19%) reduction in its net operating expenditure between 2013-14 and 2015-16 as a result of making it easier to submit vehicle and driver record changes online.

In addition, HMRC reported efficiency savings of £420m – 11.5% of its day-to-day spending – in the same period through greater use of online tax submissions. In 2013, 98% of corporation tax returns and 99% of value added tax returns were filed online.

According to the IFG, if this were replicated by other large transactional parts of government, efficiency savings of between £1.3bn and £2bn could be unlocked by 2020.

However, such an approach requires investment, and today’s Making a Success of Digital Government report highlighted that HMRC estimated that £700m of investment would be required to save £200m a year.

This showed that the barrier to progress was not technology but a lack of political drive from the top, including from prime minister Theresa May, report author Daniel Thornton said.

“Tinkering around the edges of digital government has taken us only so far – now we need a fundamental change in the government’s approach,” Thornton, a programme director at the institute, said. “The starting point is recognising that digital is not just for geeks anymore – everyone in government must work to make it a success.

“There are huge potential savings to be made if the government gets this right – which makes it all the more disappointing that the prime minister and chancellor have not been as explicit about their commitment to digital government as their predecessors.”

Thornton urged May to commit to taking digital government to the next level. Civil servants need to improve their skills, old systems need to be overhauled and policies need to be updated, he highlighted.

The report comes after former government minister Francis Maude warned that the Government Digital Service, which was created to improve digital services across Whitehall, was being undermined.

“Just at the moment when the UK has just recently been ranked top in the world for digital government, we are beginning to unwind precisely the arrangements that had led to that and which were being copied in America and Australia and some other countries as well. This is for me a pity. There is a sense these old structures in government – which are essentially about preserving the power of the mandarins – are being reasserted,” he said at the Conservative party conference earlier this month.

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