Public digital transformation will be challenged by austerity

Step change

Simon Bourne, chief digital, data and technology officer at the Home Office, also noted that he has already seen a “step change” in how the Home Office collaborates with policing and justice organisations as a consequence of Labour’s mission approach.

“What I’m now seeing for the first time is the start of a really rich set of conversations across different departments involved in the justice system and the policing ecosystem, about how we work together, what data we can share,” he said. “It’s early days, but definitely moving in the right direction.”

For Karl Hoods – the group chief digital and information officer at both the Department for Energy Security and Net Zero and the Department for Science, Innovation and Technology – while the mission-based approach in turn encourages “more of a whole system thinking approach” to problem-solving around digital transformation, taking that “whole system” perspective means “we’ve got to make sure the funding flows … [and] we’ve got to make sure that we’re focusing on things that we can deliver, I think, rather than trying to do too many things as well. It’ll come down to prioritisation.”

He added that maintaining investment in people and capability was key to achieving outcomes in the context of limited resources.

Bourne further added that while the public sector needs to keep driving forward transformation efforts, it’s clear they are operating “in a time of financial pressure” that makes this much more difficult.

“I think that then gives us, collectively as the delivery ecosystem, a real challenge as to how we can keep delivering transformation that is even better, but to do that in a more thoughtful, coherent, effective, efficient way,” he said. “We’ve all got to take a step back and continue the growth journey whilst looking at how we can deliver more for less.”

Is doing more with less realistic?

Speaking on a panel about the public sector workforce changes that are needed to deliver digital transformation efforts, the director of the London Office for Technology and Innovation (LOTI), Eddie Copeland, outlined how the previous round of Tory-imposed austerity affected service delivery.

Highlighting that London’s population has expanded by roughly 800,000 since 2010, Copeland noted that in that same time, local authorities in London cut 54,000 staff in response to a real-term budget cut of 21%.

“Your average London borough has about 3,000 people, delivers 500 to 800 different services, is at the front line of delivering social care, climate change responses, homelessness responses, and cost of living and crisis responses,” he said. “So, we have to innovate. We have very few resources.”

He added that it’s important for IT departments to recognise they can no longer simply take new tech and data, slap it onto the same old service models that have been around for past couple of decades, and expect profound change to happen.

“Where I’m seeing this done well is in organisations that get that if digital has to mean anything at all, it has to be about the cultural change, changing the service model, changing the way we do things,” said Copeland.

However, he was clear that convincing people in local government to implement wholesale IT or organisational changes is difficult in the face of cuts, which necessitates new ways of thinking about future service models.

Copeland further added that while people with deeper technical skills are needed, what’s more important is “outside-the-box” service design that starts with the needs of residents or citizens and works backwards from there to deliver effective digital services.

Plugging cuts with tech

A major question surrounding the latest round of Labour austerity – the full extent of which will not be known until the 2025 Spending Review is released – is whether the efficiency and productivity gains promised by new technologies like artificial intelligence (AI) will be able to plug the gaps left by potential further cuts to public services and jobs.

In response to questions from Computer Weekly about how it predicts the latest round of austerity will affect the public sector’s ability to digitally transform, the deputy director of digital ethics, inclusions and assurance in the Scottish government, Eilidh McLaughlin, acknowledged “it’s going to be tough”.

She said that while it’s still possible to innovate, civil servants will need to be “a bit smarter” in using what they have already got. “A better understanding of our own data and how to use it a bit better can make us more targeted in what we do,” said McLaughlin. “There’s a lot of challenge, but it’s our job as leaders to think of different ways to bring our teams with us to overcome these challenges.”

For Kamal Bal, director of digital at the Ministry of Justice (MoJ), digital transformation does not necessarily entail wholesale changes to IT systems, as some small, seemingly insignificant changes can still have a fundamental impact on how someone does their job.

“I think big-scale things that people will be asking for, which are multi-million pound projects over many years, clearly they’re going to be hard to get through, but I think there’s a large number of small things that will actually contribute to what a caseworker [for example] would say is a transformational change in how they’re able to do their job,” he said.

However, Bal also noted there are practical realities of budget allocation, as while successful digital transformation efforts will enable a higher degree of productivity throughout the public sector by cutting out the most menial tasks – potentially enabling people “to do more with the same amount, or a bit more with a bit less” – it can be hard to pinpoint to the Treasury exactly what kind of savings will be made by digital changes in the long term.

“What is that payback? How can we justify what we’re asking for?” he said. “That’s certainly what HMT care about when they come back with allocations.”

The role of AI in the public sector

While AI received relatively little attention throughout the event, panel chair John Bleasdale, chief architect of government and public sector at infrastructure service provider Kyndryl, said the company has used its investment in “AIOps” – an approach that uses AI to automate business operation actions and processes – to free up 5,500 employees from having to perform “repetitive toil and low value work”, which has added value by allowing them to learn new skills and take on more advanced work. He added this has saved the company a few hundred million pounds a year.

According to freedom of information data collated by Kyndryl, around 40% of UK government departments currently use AI to optimise business operations, while 45% have plans to implement AI over the next 18 months.

In a follow-up interview with Computer Weekly, Bleasdale added that while the majority of press around AI is focused on generative large language models (LLMs), the most beneficial use of the technology in government would be applying it to their business process elements.

He added that many of the public sector’s technology platforms are so big and old that it can be hard to gain a “full understanding” of how they work. “Any attempts to modernise can’t work by just looking at the code – they generally need to reverse engineer and properly understand the business logic, and it’s rarely written down or it’s rarely kept up to date,” he said.

“So for some of those big, long-running government services dating back to the 1980s and the 1990s, it’s incredibly difficult to do that work,” said Bleasdale. “So, where AI gets talked about in context of, say, refactoring code and helping to understand or document code, I think that’s great, but beyond that, the ability for it to try to capture and record business processes and business logic around a big service, I think will be really key.”

However, he noted that AI in the public sector offers up different challenges to its use in the private sector, in that if you free up people from doing tasks and are able to achieve those tasks less expensively, what does that mean for the workforce?

“Whilst they could free up thousands of jobs, it doesn’t do them any favours to make thousands of people unemployed,” said Bleasdale. “So I think they have very, very conflicting challenges, but it might just be that the current spending review might push them to make very difficult decisions there.”