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NAO: digitalisation failures government should learn from

Author: ICAEW Insights

Published: 29 Jul 2021

A National Audit Office review has highlighted the huge challenges faced by government when delivering digital change, and urged Whitehall to learn from past experience and failures.

The value of delivering government services in a digital manner has been clear through the pandemic, and there is likely to be an even greater push to transform services digitally in the future. This should enable greater efficiency, increased speed and better use of data across government - all of which should lead to better services and value for citizens. However, the UK government’s track record in delivering large scale digital transformation projects in practice has been mixed, with some very high-profile failures

It is therefore timely that the National Audit Office has just published a review, Challenges of Implementing Digital Change, to learn lessons from past failures. This includes recent examples such as the Emergency Services Network, which in 2019 was £3.1bn more expensive than the original business case (and has probably got worse since then) with £2.1bn less in expected benefits, and the Digital Borders project, which was reset in 2019 to increase the timescales by 3 years, reduce the scope and reduce the expected benefits. 

One striking feature of the story is the number of different government strategies that have been in place over the years to push digitalisation of services – from ‘Government Direct’ in 1996 to ‘Transformational Government’ in 2005 to the current ‘Government Technology Innovation Strategy’ and ‘National Data Strategy’. All have had similar aims of improving government services, reducing project failure, moving government off legacy systems and increasing common approaches and standardisation. All have had limited success. While there have been many successes in government IT delivery, major failures and under-delivery continue to plague the sector.

Common failings in projects

The NAO highlights a number of common and long-standing issues. The initiation of projects can set them up for failure. Senior leadership in the civil service often don’t have experience of large-scale digital change and don’t understand the complexity and risks of such projects. This can result in choices of unproven systems or technologies which don’t ultimately work. Contracts often don’t reflect the uncertainty of the project at that early stage. The move from legacy IT to more modern systems can also be poorly understood in terms of dependencies and complexity.

On delivery, the report highlights lack of relevant skills in-house and poorly applied agile project management methods. It also focuses on funding mechanisms and in particular, the use of annual spending cycles, which make longer-term planning harder. Digital projects are also seen as one-off capital projects. This misses the impact of shifting into the cloud, which moves more expenditure into ongoing operational costs to rent the infrastructure. It also fails to provide for ongoing maintenance and improvement; the hallmarks of good digital systems. 

Recommendations and actions

Identifying the problems is one thing, though. The big question is what the government can do to fix some of these long-standing issues and improve delivery of large-scale transformations. The report makes a number of specific recommendations such as improving the digital leadership skills of senior civil servants, strengthening project assurance and business review cycles, enhancing contracting and agile project management practices and working with the Treasury to develop better funding mechanisms. 

The government is publishing a number of digital related strategies this year. So far, we have seen the National Data Strategy, and we still have strategies around AI, digitalisation and cyber to come. At the beginning of 2021, a new department, the Central Digital and Data Office, was established, with new leadership. There is another attempt at improving digital identity management and developing a single sign-on for citizens across government services. There is also plenty of ambition based on the fact that the government is the biggest holder of data in the UK and can do so much more with it than they currently do. Something we hope that the new knowledge assets team based in BEIS will do.

Alison Ring, Director, Public Sector, at ICAEW commented: “It’s absolutely crucial that the government learns from past experience when implementing digital change. The digitalisation of services and systems has the potential for making citizens’ lives so much better.”

“Investing in improvements to upgrade legacy government systems will cost less to the taxpayer in the long run. We need stronger performance in delivering digital business change to avoid the constant repetition of themes in government digital strategies, which reflect the lack of progress made over the last 25 years.”

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