Still making difficult decisions – the Spring Statement

In 2010 the coalition government started with the objective of eliminating the structural current deficit by 2014-15. It introduced a package of savings, a public sector pay freeze, welfare reforms and significant reductions to every department’s administration budget. There was still a desire to protect the most growth-enhancing capital spending.

The target originally set by George Osborne when he imposed austerity on public services was only achieved this year. Paul Johnson, director of the Institute for Fiscal Studies, said the deficit reduction was still ‘quite an achievement given how poor economic growth has been’.

What are the lessons of the last eight years?

As the Chancellor gives his ‘no frills’ Spring Statement this week, and prepares more far reaching plans for tax and spending through his Budget in the Autumn, it is worth drawing some conclusions on how the government eliminated the deficit and what aspects of the austerity agenda should remain:

  • The government maintained a clear and measurable fiscal target (the Chancellor has made a ‘pledge of fiscal responsibility, to borrow no more than two per cent of national income by 2020-21) and the Office for Budget Responsibility (OBR) should continue to assess publicly whether this is likely to be achieved.
  • The departmental spending review prioritised areas with benefits to a broad sweep of society – next year’s review should promote growth (like transport and education) and fairness and social mobility (providing routes out of poverty for the poorest, improving incentives for work and tackling ‘wicked problems’ such as the increasing public health hazards of air pollution).
  • Eliminating a sizeable deficit was not a normal budget exercise and a more open and inclusive approach is required – government should consult widely, beyond departments, asking public sector workers and the public to suggest ideas, convening expert advisory groups and holding regional events to listen to people’s views.

Of course, external conditions are now favourable and the reforms introduced in 2010 (including spending controls, back office shared services and commercial reforms) have been sustainable. But the United Kingdom cannot rely on external conditions to remain as favourable as they are now. Particularly as uncertainty lingers about the UK’s future relationship with the European Union and the economic costs of divergence with the EU become clear.

What needs to change? Meeting the UK’s future challenges

The squeeze on public services is showing up in higher waiting times in hospitals for emergency treatment, low satisfaction for GP services and a staggering decline in prison safety. The National Audit Office (NAO) warned that local councils are at financial breaking point. If they keep draining their reserves at the current rate, one in ten will have exhausted them in just three years’ time.

The improvement in the public finances gives the Chancellor some leeway to spend in his Spring Statement. But the expected £5bn to £10bn windfall is not going to transform the delivery of public services. It is not enough to solve the UK’s long-term fiscal challenges. For example, demographic change will demand either a significant increase in taxation or a radical change to the funding of health and pensions. There is an immediate need to put the funding of social care on a sustainable footing

Achieving better internal efficiency is a necessary but not sufficient part of public service reform. At the same time public services must come up with innovative, less resource-intensive and more effective ways of achieving the government’s aims. In the Spring Statement, the Chancellor should provide funding and direction:

  • To move away from the traditional tools of legislation, regulation and taxation – which can be expensive to design and implement – and develop and apply lessons from behavioural science (designing policy that reflects how people really behave).
  • To renew the transparency agenda, as a way of achieving ‘better for less’ – by consistently releasing data into the public domain, individuals are able to draw their own conclusions on the way public services operate, incentivising efficiency through accountability, and stimulating innovation through ‘information marketplaces’.
  • And, where appropriate, for public services being open to a range of providers competing to offer a better public service, with a greater emphasis on outcome-based contracts, and joint work with the private sector to access private capital and expertise to make fuller use of core public assets in an enterprising way.

A final thought – accountability and public services

I appreciate that the third suggestion is not shared by everybody. Over the past five or six years problems have emerged in the UK public service market, particularly in the commissioning of complex services. This came to a head with the liquidation of Carillion.

The reality is that the public are more pragmatic than the politicians. For example, sixty-four per cent of people do not think it matters who runs hospitals or GP surgeries ’as long as everyone has access to care (Populus poll, January 2018).

But we still need to recognise that one of the most important differences between a private and public service is the different and often enhanced levels of accountability for the delivery of that service to a broader range of stakeholders. Private sector organisations that want to deliver public services have to be aware of, and work within those boundaries.

There is an urgent need for a more transparent and robust way of measuring the quality of services provided by the public and private sector. The Chancellor should ensure the rapid implementation of Sir Michael Barber’s report into improving value in public spending.

A Digital Future for Joined Up Local Services

Originally published as a guest blog on techUK Insights

We now view the world through a digital lens, with social media, smartphones and the internet creating a complex future that we must all embrace to survive. We see disruptive technologies, not just changing, but in many instances totally replacing the previous world order. For councils this is leading not only to an immediate need to adapt the way essential services are delivered, but it also raises additional questions about how councils provide community leadership, local democracy, economic growth and cultural change in a constantly and rapidly changing environment.

Councils have a long and successful history of adapting to meet the regular challenges placed before them. In recent years we have seen councils rise to the challenge of delivering crucial and critical services in times of deep austerity. These financial challenges still continue and the world around us is changing with citizens’ needs, demands and expectations increasing, often driven by new technologies. To meet these new challenges the ‘council of the future’ no longer just needs to change the way it delivers traditional services but it also has to reconsider its very role and purpose.

Councils are beginning to forge new rules of engagement, realising that when we talk of a digital future it is not just about technology change but also about social, cultural and business change. The ‘council of the future’ must provide the local leadership to successfully navigate these rocky waters on behalf of and alongside their individual communities.

At Sopra Steria we observe digital change across all sectors and would make the following observations as to the key factors that will support the ‘council of the future’.

Strong leadership is essential to managing change that will be predominantly measured by community outcomes. We see the priority for councils being their continued development as the primary leaders of ‘place’, coordinating and organising effective partnerships across all agencies to provide whole life, effective services that fully meet citizen expectations. Citizens increasingly demand joined up services and will increasingly expect seamless delivery paths. Key areas to address are seamless health and care journeys, increasing citizen confidence in law and order and effective integration of local transport.

This view of the future is supported by the annual digital government survey that IPSOS undertakes on behalf of Sopra Steria to understand citizen expectations of digital services. Consistently the highest priority in the UK has been the ‘creation of a one-stop digital portal for undertaking interactions which need to be performed with multiple agencies’.

Data is the bedrock for change – effective management of complex data will support not only the effective delivery of services, but it will allow greater interoperability between agencies. Clear information dashboards will both inform management processes but also improve democratic transparency.

Digital platforms need to be implemented that use cloud based technologies to reduce the dependence on fixed infrastructures which will reduce the cost of change and allow the development of agile and dynamic solutions.

Automation, robotics and Artificial Intelligence will increasingly be introduced to improve business processes, improve digital communication channels and to release human resources to higher value activities. An example of a successful implementation of this was the introduction of self service and automation to support the delivery of Shepway Council’s Revenue and Benefits service.

Social engagement will increasingly use social media as a channel of choice for the solving of community problems, provision of information and to enhance the democratic process.

For many the digital future has already arrived so the ‘council of the future’ needs to prepare to lead their community and place to a new prosperity based on new technologies, new cultures and new ways of delivering business that fully meet the demanding expectations of their citizens.

Join the discussion on #CounciloftheFuture To see more blogs like this, please visit the website here.

What do you think? Leave a reply below or contact me by email.

Using digital technologies to address complex problems – what can we learn from other governments?

It goes without saying that governments face incredibly complex challenges. Sustaining cohesive communities in the face of demographic, economic, security and other challenges will test the ingenuity of politicians and civil servants.

In recent blogs I’ve questioned the industrial-age organization of government and highlighted how the private sector is improving services through digital technologies. Now I would like to shift the emphasis and highlight how governments around the world employ digital technology to drive problem solving.

And I will start by looking at the one of the most significant problems facing individuals, families and communities – mental health.

Nearly one fifth of the UK population have a mental health condition

Mental health conditions cover a wide range of disorders and vary from mild to severe problems. The most common types are anxiety and depressive disorders (9% of all adults). More severe and psychotic disorders are much less common.

Recent research has found that a third of fit notes (they used to be called sick notes) issued by GPs are for psychiatric problems. The employment rate for people with mental health conditions is 21% compared with 49% for all disabled people and over 80% for non-disabled people.

Almost half of benefits claimants of Employment and Support Allowance in England are receiving payments as the result of mental and behavioural disorders. Recent independent studies estimate that cash benefits paid to those with mental health conditions are around £9.5 billion a year and administrative costs are £240 million.

This illustrates the financial costs of mental health conditions. But it fails to address the personal impact on individuals, their families and the wider community. That is why the NHS is putting mental health front and centre, in what was recently described as ‘the world’s most ambitious effort to treat depression, anxiety and other common mental illnesses’.

Using technology to create community solutions

Although overall spending on mental health will rise by over 4% in 2017/18, many areas of the country are under pressure to provide enough high quality services.

We also know that mental health is a very complex problem that goes beyond the capacity of any one organisation to understand and respond to. There is disagreement about the causes of the problems and the best way to tackle them.

Which is why Creating Community Solutions is such an exciting project.

In the US, following the Sandy Hook tragedy, the Obama administration launched a national dialogue on mental health. It soon became clear that, while mental illness affects nearly every family, there is a continued struggle to have an open and honest conversation around the issue. Misperceptions, discrimination, fears of social consequences, and the discomfort associated with talking about such illnesses all tend to keep people silent

The challenge facing the administration was how to convene a national participation process that would help Americans to learn more about mental health issues, assess how mental health problems affect their communities and younger populations, and decide what actions to take to improve mental health in their families, schools, and communities.

Officials from across the administration collaborated under the umbrella of Creating Community Solutions. They designed an online platform and process that integrated online / offline and national / local levels of collaboration. The platform has promoted a nationwide discussion on mental health. It has given Americans a chance to learn more about mental health issues – from each other and from research. For example, in December last year, and all over the country, hundreds of thousands of people used their mobile phones to get together in small groups for one-hour discussions on mental health.

What can we learn from the US?

Creating Community Solutions is an amazing example of how technology can be used overcome barriers, give access to relevant information and promote participation and mutual support. As a platform, rather than a conventionally structured project, it straddles traditional administrative boundaries and provides support in a distributed way.

I’d like to see our government adopting a similar approach, using technology to break down hierarchical barriers and using platforms to promote collaboration across public services and with communities.

I’ll be writing about other innovative ideas in future blogs. In the meantime, do you know of other innovative solutions to complex public problems? What are the exciting ideas informing your own work —particularly if you are working in the public sector – and how are you implementing them?

Let me know in the comments below or contact me by email.

When fast gets very fast: the dizzying pace of technology in the private sector and what this means for the public sector

In recent blogs I described why I think organisations are compelled to introduce new business models due to intense competition. And this competition is accelerating because of global markets and the introduction of new technology.

Contrast this with the system that is supposed to drive innovation and service improvement in public services.  Innovation in a global market does not – and cannot – rely upon a best practice circular. Yet our mindset in government and across the public sector is that this is precisely how we expect innovation and continuous improvement to be stimulated and reproduced.

We still have a distinctly top down system based on sucking in best practice to some central agency.  There it is checked, audited and inspected.  Then it is spat out over the next five years to a reluctant audience on the front line.  The manager in the local hospital or council has neither the incentive nor the inclination to accept what a ‘colleague’ down the road is doing because, as you would have heard many times, ‘it might work there but we are different’.

This mechanism is clumsy and ineffectual. Yet in the private sector, we appear to have found a different way to share best practice – we pinch it.

The intense pressure from competition forces the best companies to copy and refine whatever they can from their competitors to become best in class.  And the rate of innovation and adoption will continue to accelerate. Take, for example, the smartphone technology that gave rise to Uber (despite their recent problems in London) and how, before the world figures out how to regulate ride-sharing, self-driving cars will have made those regulations obsolete.

It is in that vein that I am increasingly struck by the dichotomy of language that describes the difference between the public and private sphere. It is not uncommon to hear the Government, when talking about the economy, to constantly emphasise the challenge to improve private sector productivity and to create a more entrepreneurial society.

Yet, when it comes to reforming the public sector, the emphasis tends to default to centralised controls.  There is unease and opposition in some quarters to flexibility and change, with insistence on preserving structures and centralised systems.  These two worlds, public and private, which you and I inhabit daily, cannot remain artificially divided forever because, contrary to popular belief, these two worlds are not made up of fundamentally different people.

Nor are the pressures on the public and private sectors completely different.

Both face the challenge of becoming more responsive and accountable to their customers or service users, their employees and wider society.  Also, if we are to remain true to concepts of the welfare state, universal provision, social justice and equity in the delivery of public services, we need to address the pressures of global markets and the challenge to representative government.

Why?  Because these pressures are calling into question the ability of traditional tools and levers – such as the way the Government exercises legitimacy, ownership and control – to respond to modern needs and pressures.

Our challenge is to construct new tools and levers that stimulates public services to find a way of promoting practitioners whose experience and reputation gives them the self-confidence to lead others to innovate. And for the system to develop a set of incentives, and the institutions a set of capacities, to continuously reinvent themselves in ways that align individual interest with the wider public realm.  I am not saying the private sector has all the answers, but it is certainly worth exchanging ideas.

If you enjoyed this, you might also enjoy another recent post inspired by the innovation demonstrated by Apple.

I future blogs I plan to dig deeper into how public services can be reformed and the role of competition and choice in public service supply chains. As always, I’d be grateful for your thoughts and comments – please get in touch.

Developing a digital culture to meet citizen expectations in Local Government services

Originally published as a guest blog on techUK Insights

A recent conversation with a Local Government IT manager led me to consider again what ‘digital’ means and what digital transformation means to the way that we deliver local services.

My colleague argued that ‘digital’ is just an expression of new technologies, and digital innovation could be best expressed in traditional IT terms, after all the IT world has always embraced change and new ideas.

I accept that it is certainly true that technology is important to deliver the ‘digital revolution’ and new technologies form the bedrock on which transformation is built.

But I would suggest that digital transformation is not primarily about technology changes but by the changes we observe in culture, communication, consumerism and the unprecedented transformation of society’s operating model.

The ubiquitous and unprecedented scale of societal change has happened in just the last five to ten years, and it’s getting more difficult to remember a life before Apple, Google, Facebook and Instagram.

In Local Government, where digital transformation is looking to leave a lasting and sustainable legacy that genuinely improves citizens’ lives and futures, the Sopra Steria approach has certainly been to make the best use of available technologies, but has always been supported by a strong business spine. We have endeavored to match both the ambitions of our clients with the desire of their stakeholders to consume services in the ways that they are increasingly using to access other markets. Game changing platforms such as Facebook, Uber, Deliveroo and Amazon do not allow other providers of goods and services to continue with traditional methods and still retain happy customers. For these and other digital leaders, digital transformation has been powered by an enormous leap in customer expectation.

In Local Government this customer expectation across a diverse range of services is also driving change and we see many different approaches to delivering digital business strategies.

So how should Local Government drive through this digital change?

We recognise four key ingredients for success which concentrate on how digital can transform the way Councils and their citizens both provide, and receive, services. They recognise that it needs careful planning if it is to provide real, useful, affordable and usable alternatives to the current methodologies.

1. Make the most of existing technology

The first stage focuses on long term planning, and encourages the immediate use of facilities already available within existing technology applications and platforms to ensure that current investment is used to its full potential. This approach encourages quick wins at low cost.

2. Small step transformation

At stage two, we start to enhance the physical service delivery with digital content, taking small manageable steps towards digital transformation. The intention is to enhance the customer experience by increasing the ability to interact with the council online and to start to introduce new ways of working.

3. Re-imagining delivery

Stage three makes greater and greater use of a redesigned on- line presence to replace or extend existing physical processes with digital operations and digital enablers. This would be visible through continuous customer improvement processes that increase customer contacts through digital access channels and offers the digital fulfilment of service requests. Where appropriate, the web will become the default channel of choice, allowing greater service time and funding to be diverted to supporting more vulnerable citizens.

4. A digital business

The final stage of the digital transformation is to develop new digital business and operating models that reach the full potential of the digital environment without just reflecting and duplicating existing physical process.

The activity would be to redesign existing business structures to take full advantage of a digital approach to service delivery. This may take the form of working with partners to improve business outcomes by sharing data and processes. It may consider new commissioning models that are not restricted by traditional barriers but that continue to improve service delivery whilst also reducing operating costs.

The world is changing and digital is changing the ways that we work, rest and play. In another five years we will look back at an unprecedented period of change. Let’s make sure that Local Government is able to embrace the opportunity to deliver lasting and sustainable change today and provide that solid foundation for the next revolution – whatever that may be.

The clock is ticking!

What do you think? Leave a reply below or contact me by email.

2017: the year of user productivity transformation – and more…?

I don’t think I can consider 2017 without first looking briefly at 2016. It is safe to say that 2016 was an interesting year across the public sector with some major tectonic sized decisions and changes.  What these will mean are still to be understood, and my colleague Steve Knights has a look at some of these in his blog ‘2017: An exceptional year of change‘.

Like the political arena, technology throughout the year has also been interesting and challenging and Local Government entities throughout the UK have taken some major steps towards embracing ‘Digital’ in the delivery of services across all aspects of their operations.

With the challenges being placed on budgets, Local Government is having to become more creative in how it utilises technology to support employees, operate the business and deliver services to a widening variety of citizen needs. Our London DigiLab innovation centre, is hosting increasing numbers of authorities eager to discuss their issues and look at opportunities to save and improve.  It is providing an important forum to help them look differently at what they do and is enabling us to identify different ways of working and new technologies that will deliver lasting benefits to their organisations and services they deliver.

2016 saw some major players in the technology sphere bring in new offerings which have the potential to change how core digital services are offered.  Microsoft opened their UK data centres offering Azure and Office365 capabilities, with a roadmap of a lot more services to be deployed throughout 2017.  IBM are bringing their Watson Cognitive technologies to UK shores, and Amazon Web Services will be opening UK data centres.  With the implications of Brexit still unknown, this collective of UK centric technology offerings will give local authorities more options to protect their data and systems.

Some of the technology trends which we saw during 2016 will continue well into 2017 and beyond. They have the potential to change how citizens engage with public services, but the biggest changes will be in how employees and businesses operate.

2017 will be the year of user productivity transformation, Systems of Intelligence and Business as a Service.

Microsoft’s Azure, Office365 and Dynamics365 offerings have matured to significant levels, giving organisations a new opportunity to embrace the possibilities of Cloud on-demand operations.

Cognitive systems, or Systems of Intelligence, started to appear as mature service proposals during 2016, but the take up has been slow as organisations struggle to understand how these can be used within existing operations.  Throughout 2017 we will see more Machine Learning and Cognitive-based offerings becoming mainstream in the business operations across local government. IBM Watson will be leading the charge as this is the most mature of the current public domain Cognitive offerings, but Microsoft’s Cortana Intelligence Suite is also maturing at a rate and will start to offer more Machine Learning services. Google’s Deep Mind is the wild card and we will have to wait and see how this will become available.  Apple will continue to explore the Artificial Intelligence space with Siri becoming more useful as a Digital Personal Assistant helping us do more with our time.

Data will continue to grow in importance and will focus on generating Actionable Intelligence using Machine Learning systems to derive insight. It will give Local Government an opportunity to look at how it can embrace a more open data culture to bring their rich datasets together in a way that can help them understand and tackle challenging areas.

How services are offered and consumed by citizens will also go through transformation as Micro Services Architecture is embraced. This will enable focused tackling of discrete aspects of service before they are then aggregated into a collective solution. Personalisation will become more of a need than a nice to have and data will be key to helping drive this understanding and service delivery model.

In summary, 2016 was a good year as organisational thinking around the use of technology matured and evolved bringing more options, solutions, innovation and ultimately beneficial outcomes. 2017 is when Systems of Intelligence will provide opportunities for the public sector to deliver more user-centric, personalised and contextual services. Some of the key technology areas that will help Local Government with this are:

  • Machine Learning – to help provide a more personalised experience which is agnostic of service delivery channels
  • On-Demand Services – to enable employees, managers and citizens to access the things they need
  • Choose Your Own model – to provide a more flexible and responsive IT function that supports employees in doing their jobs more efficiently and productively
  • Micro Services Architecture – to change the way services are designed to remove the complexity of large system redevelopment
  • API First – to provide a more dynamic approach to systems integration
  • Device agnostic services – to remove the barriers to individuals accessing the facilities they need, when they need them, through whatever means works for them

Thinking and acting differently

There is no doubt that technology has a significant role to play in helping local government achieve the savings they need, and that though a strategic approach to delivering digital services at scale, authorities can realise significant benefits.

At Sopra Steria we are seeing local authorities thinking differently about how they can approach their current challenges and looking to external partners to help them embrace a more agile service delivery model.

What are your thoughts for Local Government as we head into 2017? Leave a reply below or contact me by email.

2017: An exceptional year of change

In recent years digital technologies have driven an extraordinary pace of change in the way we do business, live our lives and interact with each other. According to a report conducted by digital and marketing intelligence group eMarketer, e-commerce sales will this Christmas exceed 20% of total retail sales during November and December, an estimated £16.9 million of online sales. This continues a year on year upward trend for retail digital transactions that shows no signs of slowing.

The challenge for Local Government is to keep up with this trend and match the expectations of their citizens who increasingly want digital solutions to all of their business interactions.

For many reasons 2017 looks to be a pivotal year for Local Government.

New structural changes such as Devolution will give both opportunities and challenges, particularly in the way that large scale infrastructure projects are commissioned and delivered. Transport improvements will offer not only a major boost to the construction industries throughout the development phase, but upon completion will deliver the connectivity – both nationally and internationally – needed for economic growth.

Key customer-facing services such as the delivery of welfare benefits are at the forefront of the introduction of digital services to both improve the point of contact with the customer but also to streamline the delivery of crucial benefits to those in need. Likewise, the pressures on health services are increasingly being addressed with digital solutions that can help to relieve the unsustainable demands placed on our doctors and nurses.

But as well as the transformational changes that we are seeing in the way that we do business, 2017 also brings us exceptional political change.

A Trump presidency and Brexit are likely to overshadow both world and domestic politics for many years to come.

As we enter this year of change, we offer – by means of a short video – a few thoughts on some of these issues.

What is absolutely certain is that by the time we reach 2018 we will be entering a very different world to the one we leave in 2016. The period of change in between will be 2017 – so be ready for a roller coaster ride!

What are your thoughts? Leave a reply below or contact me by email.