Saturday, 17 November 2012

Cutting costs/making savings, and GDS's fantasy strategy

For some time now, the Government Digital Service (GDS) have made the meaning of their digital-by-default agenda clear – they want the UK to be like Estonia.

It is thanks to the fact that practically every service in Estonia is delivered over the web that, back in 2007, Russia was able to bring the country to its knees in a matter of days. If GDS succeed with their "modernisation" plans, there will be nothing to stop that happening here in the UK.

GDS are in awe of the financial success and popularity of Apple, Amazon, eBay/PayPal, Google and Facebook. With no experience of government behind them, the over-promoted software engineers at the head of GDS want to bring their heroes' tricks to the delivery of public services in the UK.

Sensible people will see Facebook et al as latter-day Pied Pipers of Hamelin – sensible people, including the tens of thousands of public servants who will be laid off and replaced by GDS's computers when government is, as they say, "transformed".

Many of these organisations are famous for avoiding tax on their UK profits and for using their near-monopolies to tyrannise their suppliers and to milk their customers. But GDS somehow maintain their naïve veneration and on 6 November 2012 they published their Government Digital Strategy.

This fantasy strategy is an elaboration of Martha Lane Fox's ideas, set out in her October 2010 letter to Francis Maude, Directgov 2010 and beyond: revolution not evolution. Ms Lane Fox is the Prime Minister's digital champion, she's a historian, and when she says "revolution" she means it.

Her revolutionary fervour is carried over into last week's GDS strategy, which Sir Bob Kerslake – head of the home civil service, permanent secretary at the Department for Communities and Local Government (DCLG) and previously the chief executive of first the London Borough of Hounslow and then Sheffield City Council – has greeted with a post on GDS's blog, Welcoming the Digital Strategy:
Our reform plan also made a clear commitment to improve the quality of the government’s digital services, and to do this by publishing a Government Digital Strategy setting out how we would support the transformation of digital services [how does publishing a wishlist improve the quality of public services?].

We fulfilled that commitment yesterday with the launch of the Government Digital Strategy, Digital Efficiency Report and Digital Landscape Report and I very much welcome their publication.
But why? Why does Sir Bob "welcome" this emmental cheese of a strategy? It's full of holes. Consider cutting costs/making savings for example.

Let's get our duck in a row.

Martha Lane Fox says:
Shifting 30% of government service delivery contacts to digital channels would deliver gross annual savings of more than £1.3 billion, rising to £2.2 billion if 50% of contacts shifted to digital. I strongly suggest that the core Directgov team concentrates on service quality and that it should be the "citizens' champion with sharp teeth" for transactional service delivery ...

The savings from a reduction in duplication are significant, but will take time to realise. The Government recently announced a 75% rationalisation of Government websites. It is estimated this should reduce overall Government web expenditure from around £560 million to about £200 million a year. I think there is agreement that Government can go much further than this, perhaps over time reducing overall expenditure to less than £100 million a year (and some think much less than this though I think we should be careful to manage expectations at this stage) ...

I recommend that any savings from the reduction in duplication should remain in departments, once transition costs and ongoing funding for the new central team have been taken into account.
How are we doing with managing expectations?

In his Foreword to the Government Digital Strategy Francis Maude, Cabinet Office Minister, waves a couple of high-sounding numbers around without asserting anything, the statement is short and conditional:
By going digital by default, the government could save between £1.7 and £1.8 billion each year.
The main body of the document is even more non-committal:
On the basis of historical savings achieved by existing digital services we estimate that £1.7 to £1.8 billion of total annual savings could be made by shifting the transactional services offered by central government departments from offline to digital channels. Of this, £1.1 to £1.3 billion will be saved directly by the government, with the rest passed on to service users through lower prices. These figures do not include the potential costs of a transition to digital [potCosts], but also do not include the additional savings [addSav] that could be gained from fundamental service redesign or back-end technology changes ...

Our estimates suggest that an hour spent interacting with government costs the average citizen £14.70. If just half an hour were saved by digitising every transaction currently completed offline, the total savings to the economy could therefore be around £1.8 billion. Furthermore, many public services are run by agencies that recover their costs directly through user charges, so reducing costs provides the potential for savings to be passed on to users.
Not quite an equation, we have an approximation here:

Savings p.a. ≈ £1.7 billion - potCosts + addSav

We don't have even an approximation of the values of potCosts and addSav.

But we do have the thumbs up. Digital-by-default has been given the go-ahead.

How much will it cost? We don't know.

How much will it save? We don't know.

If it saves anything, will the public be allowed to keep their own money? No, Martha Lane Fox recommends that Whitehall departments should keep it. For whose benefit is this project being conducted?

What are these savings we're talking about? Lay-offs. Lay-offs of public servants no longer needed. Replaced by computers. How many of them? When? Which ones?

What are the chances of digital-by-default working? And when – how long will it take?

How much advertising revenue could GOV.UK raise? Will GDS follow its heroes Google, Facebook et al into this – into advertising – as they have done into everything else?

Where there should be answers to these questions in the Government Digital Strategy there are just holes. Revolution is proposed with no justification. And yet Sir Bob, the head of the home civil service, welcomes this fantasy.

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