Thursday 6 December 2012

The savings to be expected from digital-by-default – a clarification

You thought you knew what savings are?
You thought you knew the point of digital-by-default?

Francis Maude said in his Foreword to the Government Digital Strategy that: "By going digital by default, the government could save between £1.7 and £1.8 billion each year ...".

Then in yesterday's Autumn Statement ("AS2012") the Chancellor said: "The recently published Digital Efficiency Report sets out how departments could save approximately £1.2 billion over the remainder of the current spending review period by continuing to move their transactional services online and become ‘digital by default’ ...".

So which is it? 1.2, 1.7 or 1.8? And are we talking about annual figures or the cumulative total over a period of years?

Time for some clarification.

We have tackled this matter before in Cutting costs/making savings, and GDS's fantasy strategy, where we made it clear that the £1.7/1.8 billion of estimated savings ...
  • represent annual figures,
  • exclude the cost of introducing digitisation (which might amount to £several billion),
  • exclude additional savings which could be made (or not), and
  • will be largely retained by the government (£1.1/1.3 billiion) ...
  • ... so don't go running away with the notion that tax rates might be reduced.
So what's the £1.2 billion? Where did that figure come from?

That's the amount that could be saved by digitisation "during the current spending review period" ("SR2010"), i.e. the five years 2010-11 to 2015-16. That's what the Government Digital Service (GDS) tell us in the Digital Efficiency Report, (p.2). They then promptly confuse the matter again by telling us on p.4 that the £1.7/1.8 billion figures quoted include savings that have already been made by digitisation – it's not all new money.

At which point you may start to feel that you're never going to see any of these savings even if they do materialise. But that's not the half of it. Even more savings you never get the benefit of could be made if only "legislative blockers" were swept away (p.3), those pesky laws of the land/cultural barriers/myths that stand between us and the new world of frictionless data-sharing, please see Alan Travis – Whitehall, the Guardian newspaper and Lord Leveson.

Digitisation has been going on in Whitehall for decades. Despite which, public spending rose by 59% in real terms between 2000-01 (£443.7 billion) and 2009-10 (£705.6 billion). Saving the odd billion by introducing a bit more digitisation is neither here nor there and it certainly isn't worth losing the wisdom of the anti-data-sharing laws which we currently have on the statute book for our protection.

As things stand, with those fusty old laws still in place, GDS reckon that Whitehall can get rid of about 40,000 public servants once digital-by-default is up and running (p.19). That's based on the example of the Driving Standards Agency (p.14) who have gone from 400 staff booking driving tests in 2003 to just 75 in 2012. And on the example of HMRC (p.15) who have got rid of 2,700 staff over the past five years as so many of us have taken to submitting our VAT returns et al on-line.

Has this mass redundancy programme been cleared with the unions?

And while we're waiting for an answer to that, how long do GDS intend to take over this digital-by-default project? The magic figure they're looking at is 82%.

That's the percentage of transactions with the state undertaken by people and companies digitally. And they reckon it could take 11 years or so to get there, long enough for several changes of permanent secretary, Cabinet Office Minister and government.

And if GDS have burned their way through billions by then and there are still no savings trickling down to the public, what then?

And if all our data gets hacked in cyberspace, what then?

The Minister is accountable to parliament. Not the officials. Not GDS.


Mike Broken said...

One of the ways to save money is by cutting corners. On November 23rd, the GDS weekly update trumpeted that they'd "been supporting the release of the new Universal Jobmatch service this week ... it’s been a tough test of how quickly our support teams can work with teams elsewhere to help them monitor and respond to problems users are reporting to us. Where appropriate, we’ve lent a hand to help resolve them too."

On December 6th, a Channel 4 investigation reported on how this "scammer's paradise" was rife with fraudulent jobs aiming to steal personal identity data. The site was outsourced to Monster, a well known hack victim.

GDS have had nothing further to report in subsequent updates. This is their first stab at delivering anything transactional.

It's a poor start.

David Moss said...

Mr Broken, thank you very much for that comment.

I have been trying for weeks to write Transactions, and GDS's fantasy strategy to go with the rest of the series. Now I may be able to.

Thank you, once again.

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