What you won't see in Budget 2014 - the digital opportunities being missed by every political party

Chancellor of the Exchequer George Osborne announces the Budget tomorrow (Wednesday 19 March), and the media is full of speculation over what his speech will include.

I would, however, like to make a confident prediction about a few things the Budget will not include.

Politicians of all parties are yet to understand to even the slightest degree how technology can be used to underpin policy making over the next five to 10 years. As a result, this year’s Budget will be yet another missed opportunity to take a radical, digitally influenced approach to government.

Every party likes to describe their policies as “progressive” – which, as far as I can tell, basically means, “Let’s announce an idea that none of the other lot has tried yet”.

But a truly progressive policy would be one that recognises the far-reaching societal, cultural and economic changes that the digital revolution is going to enable in the coming years.

Let me be clear what I mean here.

I’m not talking about “digital government” – that is, the delivery of public services using digital channels such as the web and mobile. The current government has made some great strides in this area, and the Labour Party has acknowledged the importance of developing its own policy. Digital is now in its infant steps of changing the relationship between citizens and the public services they consume – which is a great thing.

Nor am I talking about the role of technology in the economy – supporting the IT and digital industries, developing the digital skills we need in the UK workforce, and recognising that all things digital are a huge global opportunity for UK businesses. There has been some progress in this area under the Coalition – Tech City has established a profile for London as a vibrant home for tech startups; more apprenticeships are available for IT and engineering jobs; and the government is actively promoting the UK technology sector abroad as a world leader.

But what is missing entirely is the third slice of the digital economy pie – exploiting the digital revolution to solve some of the policy and political challenges of our time.

To illustrate what I mean, look at one high-profile, controversial policy of the moment – HS2, the high-speed rail line to link London and the north of England.

In a digital world, HS2 is a 19th century solution to a 21st century problem. The key problems it seeks to solve are: to rebalance the economy between north and south; and to plan for predictions of future rail capacity as train travel for passengers and freight continues to grow.

This assumes two (among many) things – that the rebalancing of the economy away from London and the south depends on the physical movement of people and goods; and that people will continue to want to travel between the north and south of England to do business in person.

If you look at both those assumptions wearing a digital hat, they quickly start to fall apart.

Developing the digital economy and digital skills in the north of England is a huge opportunity to rebalance the economy without mass movement of people and goods. We in the south are constantly told about lack of jobs, rising unemployment and declining living standards where old manufacturing and primary industries have declined in the north. We see talented graduates drawn to London because that’s where they see the secure, well-paid jobs of the future will be, thereby entrenching the economic challenges of their home regions.

Actively encouraging and enabling the development of digital skills, and the setting up of digital businesses (or just northern offices for existing London-based technology employers) puts those regions onto a growth path for the future economy – one where getting on a train to London for work is a novelty, not a necessity.

As superfast broadband is (mostly) rolled out across the country, the easy and cheap availability of tools such as video conferencing, social networks, unified communications, collaboration, mobile, cloud and so on, make it increasingly viable to avoid lengthy journeys between north and south. Technology like this offers more time at work, more frequent communications, and thereby more productivity and growth.

So, in a digital economy as described above, is £50bn on a faster train line really the best economic investment for a government to make?

Think about it – let’s say, for example, that government finds a way to incentivise employers to encourage more staff to regularly work from home, perhaps with some sort of short-term tax break.

If, conservatively, 50% of employers can get just 20% of their office-based staff to work from home two days a week, that means 4% fewer commuters every week. That’s a 4% reduction in peak-hour road traffic and train capacity straight away.

It also frees up 4% of office space, that can be converted into brownfield sites for new residential housing developments that helps to ease the chronic housing shortage, keep house prices down, make property affordable again for a younger generation, and avoid the sort of planning delays that are holding back property developments around the country.

But those new home workers might not actually want to be confined to a room in their house two days a week. They might still like to have other people around them. So what about developing some of the UK’s libraries – under pressure of closure from cash-strapped councils – into community workspaces? Equip them with Wi-Fi and broadband capacity and they become a vital community facility.

Put a crèche and childcare facilities inside them too, and working parents get cost-effective childcare and a better work-life balance.

Now go back and read those last few paragraphs and imagine that 75% of employers can get just 20% of staff to work at home twice a week. That’s 6% fewer commuters, 6% of office space freed up.

How about 40% of staff? That’s 12% fewer commuters. And that’s a serious economic and political opportunity.

And none of that mentions the potential benefits to local community retailers, who have all those home workers to feed and provide coffee for, or to pick up extra business when they have time to pop into the town centre over lunch.

Now, I’m not an economist, and wouldn’t claim to have the detailed analytical tools or skills to delve deeply into what I admit are simplistic arguments. But it must be clear to anyone that there is a huge opportunity here.

If you took half of that £50bn set aside for HS2, and put it instead into rural broadband, digital skills development, homeworking incentives and converting libraries – how much more economic benefit would that have than getting from the north to London for a meeting half an hour earlier?

And that’s just looking at the progressive digital alternatives to one policy, HS2.

But I can confidently predict, nothing like this will be in the Budget, nor in the manifestos of the three political parties for next year’s Ge neral Election. How I would like to be wrong in that prediction.