Socitm Blog

Socitm response to the Budget 22nd June 2010

It was pretty clear to everyone beforehand, that the first budget of the new Coalition Government was going to be a difficult one - difficult for them to write given the austerity theme, and difficult for the rest of us in its impact.

Socitm was looking for specifics about the importance of technology, since technology lies at the heart of :

• Public sector reform and efficiency - doing more for less.
• The socio-economic well-being of communities.
• UK competitiveness and growth - in every sector  

If IT is seen as just a support service, then we will miss huge opportunities. Arguable, technology is the only 'silver bullet' in the armoury of the new government, and given many of the new ministerial team are IT-savvy, I was optimistic.

In practice, the budget does not go far enough in recognising this and no doubt our expectations were too much. There was an opportunity for bold statements about the multiplier effect of IT investment, especially in the public sector. It was a time to talk about new models of public/private collaboration using IT to drive public sector productivity and lower costs. It was a time to help the technology industry in the UK to modernise and see beyond the lucrative public sector deals on which some have relied in the past.

Some areas were well-trailed before the budget - such as the council tax and public sector pay freezes and other tax changes. Some cuts will not be unwelcome in the public sector. Cutting regulation, the 'performance measurement' industry and the number of quangos we have to deal with, for example. Austerity drives creativity and innovation, and we have seen this over the years in local government where funding has always been tighter than elsewhere. It is now widely accepted that some of the most effective, efficient and innovative applications of IT can be found in councils across the country.

One concern is about the effect of sudden changes. Cuts to grants alone have a ripple effect across the public sector and suppliers, and the cost of resulting realignments can be significant. Also, whilst reducing the number of quangos who have over time become involved in public administration is generally welcome, something will need to fill the vacuum they leave behind them (albeit a small one in some cases!).

There is another key to all this (besides the technology) and that is in leaving local public services with the freedom to decide how change should be managed. In the past, successive governments have set up national policies and programmes and then prescribed how the new measures need to be implemented, applying layers of regulation, audit and performance management to ensure this happens.

The impact of public sector cuts on our communities can be mitigated by supporting local public services to change. Welfare measures announced in the budget are a key component of the proposals for reducing the deficit. These will require focused action to reform public services, to drive collaboration and encourage innovation.

Opportunities created by a public sector network, cloud computing, shared services and other infrastructure developments will need to be exploited, and these represent a significant challenge to the IT industry and  to those working in IT in government.

This reform is about automation, self service and a more flexible and efficient workforce. Initiatives need to be scaled back, overheads reduced and assets freed up. A stronger commercial drive is also needed to increase income and create better value arrangements with the private sector. Collaboration demands that public services in any given locality share information, assets and resources to deliver more citizen-focused services. At the same time, citizens and businesses can interact more directly in how local services are shaped and personalised, achieving better targeting and reduced costs.

The budget proposals to abandon the 'broadband tax on landlines' are sensible, but do not address the lack of access which exists in some areas which will be a barrier to directly delivered modern public services. Indeed, the proposals appear to fall short of a commitment to achieving universal access - the words used are "working towards" - and their economic feasibility lies untested.

So if the budget is to be successful - that is, if it delivers savings in a way which are seen as necessary and acceptable by the public - then there needs to be a new era of trust between local and central government in how front line services are protected whilst dramatically falling unit costs are delivered.  This in turn will rely heavily on technology to transform what we do and how we do it.