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Future of Tax

The future of public service delivery

Author: ICAEW Insights

Published: 03 Mar 2023

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Digitalisation has the potential to transform public services, but a recent survey found the British public disappointed. We learn what local government can do to fast-track digital innovation for citizens.

The pandemic has revolutionised how we consume services. From grocery shopping to banking, office working to customer service, digitalisation is rapidly changing the way we live – and the pace of change is only going to accelerate. However, only 39% of people believe that the government’s use of technology during the pandemic was effective, according to a survey by EY.

“I believe we have now hit the period where we need to move beyond digital incrementalism. It’s no longer about digitising, or moving online, or procuring a slightly better system. We need to radically rethink the services we apply the technology to,” says Eddie Copeland, Director of the London Office of Technology and Innovation (LOTI).

LOTI was founded in 2019 to overcome London’s digital collaboration deficit. Its aim is to enable London’s boroughs to do more with technology, data and innovation through the sharing of ideas and processes. Practically, this means working with London’s boroughs to tackle real-world problems such as digital exclusion using technology at scale.

During the pandemic, LOTI helped boroughs use data to understand which residents were most in need of support, as well as identifying barriers to working across different organisations. Practical examples included creating a guide to online council meetings, engaging with the public digitally and improving data sharing on free school meal provision to help vulnerable children (see case study below).

Post-pandemic, Copeland believes there is an increased appetite among public officials for real-time data that can affect decision-making. He cites the Greater London Authority’s High Streets Data Partnership, which uses data from third parties such as Mastercard, Strava and O2 to measure footfall and spending as an example of how boroughs can reimagine and reinvigorate town centres through street design, changing building use and new public transport. More partnerships like this might be needed to deliver services, argues Copeland.

“Local authorities might play a radically different role from delivering or commissioning a service in the future. Can they incentivise a solution? Can they act as a matchmaker? Over the past decade we’ve seen exponential levels of growth in the technology available to government, but a fraction of that innovation in the service models they apply it to,” he adds.

Modernising services

Dr Andrew Larner is the founder and CEO of iESE, a social enterprise that helps transform public services and works in 12 different countries. Like Copeland, he believes the UK is at a ‘pivot point’ when it comes to services and digital transformation, and that the future will see a fundamental redesign of what public services are on offer, and in how public bodies use data and analytics to predict trends and intervene when necessary.

“The digital bit that is really important is the ability of councils to look over the horizon, see what is going to impact their community and deal with it. For example, the rising cost of energy and fuel poverty could have been predicted years ago,” he argues.

However, getting to this point requires local government authorities to address digital transformation through a series of stages, according to Larner. The first stage is taking council services, adding digital elements to them and making customer experience better. Stage two is redesigning services around customer needs and clustering them together. Stage three – the truly transformative stage – is creating new services in the community that would mean existing public services are no longer needed.

Progressing through this transformation model requires investment – both financial and in skills development. However, it’s no secret that local government has faced severe funding cuts in recent years. By 2025, local services will face a funding gap of £7.8bn, having already seen a reduction in core funding of £16bn over the previous decade, reports the Local Government Association. For Larner, it means digital transformation is a necessity.

“This direction of travel is the only thing that is going to save local councils from bankruptcy. Fifteen years ago, we had the graph of doom, which showed the costs of social care and waste disposal were going to absorb the total local government budget, so councils have had to be very commercial in drawing new income. The real challenge is skills. We’re redesigning public services at a fundamental level and that requires a certain skillset,” he says.

Ethics and consent 

An important part of the government’s current Levelling Up agenda is around improving public services and empowering local communities. It aims to achieve this through five Digital Planning powers that will create a modern data-rich system open to both planning authorities and third parties, which in theory will enable collaboration and innovation.

However, with increased data sharing comes increased scrutiny. Is the general public willing for their data to be used in this way? Edwina Dunn is interim chair of the government’s Centre for Data, Ethics and Innovation (CDEI) and a pioneer of using ‘big data’. She previously created Tesco’s Clubcard with husband Clive Humby through their data analysis consultancy dunnhumby. They eventually sold the business to Tesco in 2010 for a reported £93m.

Dunn thinks “few people now would say that the role of technology and data tracking isn’t valuable. We know lives have been saved [during the pandemic] because of our ability to prioritise the vulnerable in our communities and roll out a vaccine. However, everything a government does is based on trust and acceptance of its citizens. All brands have to make commitments to their customers and, in the same way, governments have to be trusted to use data wisely, carefully and responsibly.”

For Dunn, the challenge is making this case visible to the public. Doing so means explaining how data can save taxpayers’ money – or, for example, create a cure for a disease more quickly. It’s not enough to simply expect people to give up their information without communicating the benefits. And that means explaining how the use of big data is intended to revamp public services in the most equitable way possible.

“Big data has never been more valuable. It is the fairest way to measure what is going to help the most vulnerable in our communities,” says Dunn. “You can’t solve a problem until you understand it.”

Case study: LOTI and providing free school meals during COVID-19

During the pandemic, it quickly became apparent that London boroughs needed to do more to understand which households were in need of additional support. One key indicator of vulnerability is a child being in receipt of free school meals. However, at the time, if a child went to school in a different borough to where they lived, data on free school meals could not be shared.

Collaborating on sharing this data across boroughs was a lengthy process that could have taken months and several legal teams to finalise, so the London Office of Technology and Innovation (LOTI) worked with the Information Governance for London Group to nominate one individual to draft an agreement that could be signed off. This reduced the delivery time of the agreement to three days.

However, no data actually ended up being shared due to there being no central data service that allowed boroughs to share encrypted data. This meant that the 32 boroughs totalled more than 500 individual data sharing relationships – an unwieldy and complicated process that was unmanageable. Consequently, LOTI worked with the Greater London Authority to make the data available through the London DataStore, which enables private data sharing between organisations – simplifying technology to match the simplification of information governance.