New government, same government IT? Perhaps not...

On first impressions, the Conservative election victory appears to be business as usual for IT across government. The challenges before the election are the same challenges now; the civil service leadership faces are the same, even if the names on the ministerial doors might change – not least in the case of Francis Maude, formerly the political driver behind digital reform but now ennobled as trade minister, with Matt Hancock picking up Cabinet Office minister responsibility for digital government.

But I have a feeling there will be surprises – that things will change more over the next year or two than some might expect. Here’s a personal look at what might change, what needs to change, and what will trundle on much the same.

Changes ahead

There will be changes at the Government Digital Service (GDS) over the next 12-18 months – not as a result of any particular problems or deficiencies (although there will inevitably be some who will portray it as such, given the negativity towards GDS in some quarters) – but as a result of an ongoing shift in GDS’s role and focus.

GDS for the last five years has been seen as Whitehall’s digital department, when its real purpose has been to create strategy and demonstrate and drive change more widely. I would expect that purpose to become clearer in the coming years. What will that mean in practice? Here are a few guesses:

Support and development of the website will be sold off or mutualised. This will follow a model similar to the Crown Hosting Service and the Shared Services Centre, where Ark Data Centres and Steria respectively run operations as a joint venture, part-owned by government. There’s no longer a strategic need for to be run entirely in-house – the technology infrastructure and publishing platform are in place, and content management is devolved to departments. It’s becoming a commodity service and is likely to be commercialised as such.

Developing digital transactions will be the responsibility of departments, driven from the centre by Civil Service CEO John Manzoni. It’s often forgotten that Manzoni, appointed in October 2014, is the person ultimately responsible and accountable for digital transformation across Whitehall – not GDS chief Mike Bracken.

He’s had six months to assimilate his new job, and to assess the needs for civil service reform and greater efficiency. It’s significant that Matt Hancock has not taken on the entire job previously held by Francis Maude – we effectively have two Cabinet Office ministers in Hancock and Oliver Letwin. The latter is more senior, but Hancock has been given a focus on “efficiency and civil service reform” – the new political muscle behind Manzoni’s plans.

GDS has already announced that its initial transformation programme is over – the 25 digital “exemplar” transactions that were the focus of the first wave of digital development and were mostly, to some degree, implemented before the election. Responsibility for those exemplars and further transactions has been gradually handed back to the departments as their own digital teams have expanded. You can expect to see GDS being much less involved in the day-to-day delivery of digital transactions from now on.

Instead, GDS’s main Whitehall focus will be the government as a platform (GaaP) strategy, as well as overall digital government direction, setting open standards for interoperability and data, and enforcing red lines around technology purchasing.

Consultancy McKinsey has been brought in by the Treasury to evaluate the financial aspects of GaaP – Mike Bracken’s first post-Purdah tweets emphasised that GDS is still in charge of “strategy, discovery and tech” for the programme. In effect, that means McKinsey is working out the potential savings – watch out for that figure to be announced by chancellor George Osborne in a Budget statement later this year or next. GaaP is the next stage of the intended digital overhaul of central government, and will increasingly be the focus for GDS.

In general, as digital services move from strategy to delivery to ongoing support, this three-tier model of GDS (strategy), departments (delivery) and private sector / joint ventures (support) will become clear.

Remember that the GDS recruitment pitch to bring digital experts out of the private sector and into the civil service has always been to say: “Come and work for us for two or three years and help us change government”. Outside of a permanent core team, the idea was always to flex in size and skills according to the next transformation task ahead. Some of those core team members will go during the next five-year parliamentary cycle – CTO Liam Maxwell, for example, is contracted until 2018 and if he feels he has completed the overhaul of technology delivery and contracting he set out to achieve, he’s likely to move on.

What needs to change but might not

Over the past couple of years, the area mentioned most often as a problem has been procurement. The agile GDS and the process-oriented Crown Commercial Service (CCS) have at times proved to be difficult bedfellows. For all the good words about making more use of SME suppliers, many insiders feel that CCS’s instincts are towards the big players, the likes of Capita.

Everybody loves G-Cloud, but many of the team that created it (and have since left the civil service) feel that CCS doesn’t like it and fear for its future. CCS is at least being pragmatic – its recent tender notice for the replacement for the unpopular Consultancy One framework mentioned the possibility of a “G-Cloud like” arrangement. Insiders say that CCS has tried to use purchasing models that work for commodities like stationery and office furniture, but fails to appreciate the flexibility needed by digital and technology.

There seems little doubt that som e people close to GDS would prefer to see more tech-related purchasing driven by GDS principles. But CCS is a big beast and hard to change.

GDS has also been tasked with closer working with local government on its digital transformation – but it’s not yet clear how that will work and or even what it means in practice, beyond a commitment announced by Osborne in his March Budget. The digital challenge for councils is arguably bigger than that in Whitehall, and the cost cuts they need to make are significant. But outside of a core of forward-thinking local authorities, there are still big question marks about whether enough council CEOs really “get” digital to deliver the scale of radical change that is needed in the sector.

Carry on, regardless

Universal Credit will continue its slow progress to the much-awaited digital system currently being trialled in Sutton in south London. The troubled programme remains a huge technology risk for the government – barely 1% of all benefit claims are on Universal Credit despite the original objective to have the vast majority of claimants on the system by now. Roll-out continues, but the same risks remain.

Francis Maude promised that all the big outsourcing deals inherited in 2010 from the previous Labour government would have gone by 2020. Most of them conclude in the next two or three years. GaaP is not going to be developed enough – or a panacea – to replace them all in that time. The process of contract disaggregation will continue; some incumbent suppliers will gain short-term extensions; some will win a few of the disaggregated contracts; you can almost guarantee that some of the transitions will go badly. But, largely, Maude’s promise will be fulfilled.

Whether that leads to a greater involvement for SME suppliers is less clear. The Cabinet Office basically bodged the figures to claim it achieved its target of 25% of new spending going to SMEs. The target for technology was meant to be 50%, and in G-Cloud that’s been achieved. But the amount spent with tech SMEs on G-Cloud – roughly half of a cumulative £559m over three years so far – is tiny compared to the billions still being spent with big suppliers on outsourcing deals.

The biggest outsourcing deal of them all, HM Revenue & Customs’ £800m a year Aspire contract, expects to save £200m or 25% of that annual cost through disaggregation. That’s still £600m a year of external supplier spend – and will half or even a quarter of that go to directly contracted SMEs? No way. Once the big contracts are replaced, it’s going to be almost impossible to say that even 25% of new IT spend has gone to SMEs without some very creative accounting on behalf of the big suppliers claiming much greater use of small businesses in their supply chain.

The aspiration to make greater use of SMEs will continue – and many SMEs will benefit – but the target numbers will be difficult to prove. There is still plenty of money to be made for the big outsourcers from the new government.

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