GDS gets a £450m budget boost - and a £3.5bn incentive to prove digital really works

Even people close to the Government Digital Service (GDS) seem surprised – pleasantly so – by the announcement of a £450m budget over the rest of this Parliament.

While it’s still not clear exactly how that cash will be allocated, it’s a far cry from expectations in the months leading up to chancellor George Osborne’s spending review. From the gloom and despondency of the summer when former GDS chief Mike Bracken and his senior lieutenants quit amid rumours of huge cuts, GDS has received its biggest ever budget boost and a commitment for the next four years.

As recently as September, GDS executives were expecting to be “turning down the volume”. Osborne just turned it up to 11.

Assuming the £450m runs from the 2016 to 2020 financial years, that’s a 94% increase from the most recent £58m a year. And in a further surprise, that GDS budget is in addition to the £1.8bn allocated by Osborne for digital transformation across Whitehall departments – early assumptions were that GDS was part of that figure.

So Osborne has given significant backing to both GDS and the wider digital programme across government – but now the pressure is really on to deliver the promise of digital change. For that £450m, Computer Weekly has learned that GDS is expected to return at least £3.5bn in savings; HM Revenue & Customs is spending £1.3bn on its digital strategy and must return £1bn every year in additional tax revenue.

The government has claimed big savings from digital during the last Parliament – Cabinet Office minister Matt Hancock mentions a figure of £3.5bn. But that’s a highly contentious claim – for one thing, it’s compared to a “2010 baseline”, meaning it is money that would have been spent if government still worked like it did in 2010 under Labour.

Some of the savings are clearly genuine – Gov.uk costs a lot less to run than the multitude of websites it replaced – but much is clever accounting. For example, £600m of savings in 2014/15 was attributed to the spending controls introduced by GDS. But what that’s actually saying is – “Someone wanted to spend £100m on an IT project, we said no, and they spent £20m instead; therefore we saved £80m”. It’s not a “saving” in terms of reducing the amount of money government used to spend – it’s a saving compared to what it would have spent if the controls did not exist.

GDS is working on a new business plan, expected by the end of the year, which will give more detail on how that £450m will be spent. But there can no longer be any doubt about this government’s commitment to a strong centre for digital government, technology and data – a commitment questioned in August by Mike Bracken, and which led to his departure.

GDS and its digital advocates have said all along that the potential benefits are huge – they now have four years to prove it.