19 January 2023

Austerity 2.0: digital public services in tough times

Austerity 2.0: digital public services in tough times image
Image: Ainga Pillai is CEO of Zaizi.

The year ahead will be a major challenge for local government. Against the backdrop of a cost of living crisis, the recent ‘Austerity 2.0’ budget statement means authorities need to reduce costs while still delivering critical frontline services.

It also means – once again – that the focus will be on accelerating the digitisation of public services to drive new efficiencies.

This begs a few important questions. What can we learn from the experience of digitising services under Austerity 1.0? Just as importantly, how can we move forward from those times? How can we not only reduce costs, but also deliver services that are more relevant to peoples’ needs? And by doing so, provide better ROI so that more money can be redirected back into areas like social care?

Three key things need to happen to make sure we move forward in the right direction.

1. Focus on outcomes for longer-term cost savings

During the first round of austerity there was a rush to digitise the way people transact with government. The objective was simple: to turn manual processes into digital ones and save costs. The business case was straightforward and easy to write. If it cost £18 to deal with an enquiry face to face, £8 over the phone or 50p through a digital channel….well, you didn’t have to be a genius to do the maths.

This approach was successful in meeting the immediate cost-cutting need. It was a case of picking off the low hanging fruit. What it didn’t do was investigate whether the digital services we created could have solved deeper problems that have an impact on budgets and unintended consequences on other related services

Under Austerity 2.0 this approach needs to change. Projects need to start with a key question: ‘Rather than simply saving costs through automation, are there changes we could make at a policy level that could have a greater impact and help us deliver an effective, joined up, user centred service in other ways?’

My company has recently completed a project that worked this way for the Department for Levelling Up, Housing and Communities that targets homelessness. To get to the root of the real problem, we asked local authorities and vulnerable tenants what they thought would make their life easier. This outcome-driven, user-centred research has resulted in new legislation that will allow authorities to share data across boundaries and track rouge landlords more easily.

In the short term, this will result in a digital service that will help to reduce the cost of tracing and monitoring landlords. But it will also help to tackle one of the root causes of homelessness and the pressure this puts on local health and care services. That’s a significant advance on the way things worked 10 years ago.

2. Use cost savings to invest in continual improvement

A key failing of digital projects during Austerity 1.0 was the lack of investment in services beyond the go live date. There was very little thought given to the notion of continual improvement and ensuring the digital service continued to support service delivery.

This is another thing that needs to change. At the moment, many authorities have to bear the cost of asking suppliers to rebuild a service when policies or citizen needs change. They would be in a better position if they had invested some of the cost savings they achieved into growing the internal capability needed to make those changes themselves.

That’s certainly what needs to happen from now on. For their part, IT and digital consultancies need to make more effort to pass on their knowledge and upskill local government teams once a project is completed. That will make digital services much more sustainable in the long term.

3. Embrace open source platforms

One of the big constraints for authorities when they were digitising services in the 2010s was their reliance on locked-in relationships with legacy applications and suppliers.

Moving forward, authorities must renew their focus on ending those relationships by adopting open source platforms.

More and more of these are becoming available – such as the publicly-owned LocalGov Drupal platform that enables councils to build websites easily for a lower cost.

The Department for Levelling Up, Housing and Communities is also in the process of developing similar centralised, open source platforms that will enable authorities to build localised services using a common set of tools.

At the end of this new round of austerity, we will hopefully see that councils have fully embraced this opportunity to reduce costs, build more flexible services – and use the time and money they have saved to focus on the frontline services that matter most.

A better, more sustainable way forward

The benefits of a new approach that learns from the mistakes of the past are clear to see. It will help councils create services that deliver longer-term cost savings. It will serve the needs of people better. It will help in-house digital teams be more self-sufficient. Just as importantly, with budgets likely to be tight for years to come, it will help them manage the risk of designing themselves into expensive cul-de-sacs that will necessitate another rethink in the future.

Ainga Pillai is CEO of Zaizi, a consultancy which designs and creates digital services for organisations in the public sector www.zaizi.com.

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