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Whitehall only capable of ‘piecemeal’ digital transformation, says PAC

The Public Accounts Committee is unconvinced government will achieve its digital transformation ambitions as progress is thwarted by staff shortages and a lack of senior leadership engagement

Despite numerous digital strategies, the government is still struggling to achieve digital transformation, in part due to digital skills shortages and a lack of senior leadership support, according to the Public Accounts Committee (PAC).

A report by the committee found that while the Central Digital and Data Office (CDDO) has made good progress in supporting departments in addressing barriers to digital, actual transformation is still yet to happen.

Part of the problem, according to the PAC, is that although public services need a “fundamental reform”, they very rarely have a single service owner and “timely metrics on costs and performance”, so identifying existing costs and tracking efficiency of a project is difficult.

The report calls for departments to identify a single owner for each government service, which will be tasked with identifying the full costs and benefits gained from transforming those services, or the costs of not doing so. “A single director-level owner for each service, with accountability for its end-to-end operation and decision-making authority for continually improving the service, would enable departments to form a complete and joined-up view of their services and associated costs,” the report said.

Because departments don’t have the right resources and capabilities to properly transform services, they tend to make superficial and incremental changes, such as making the front-end look good, but not addressing the problems and limitations of keeping legacy systems in place.

Redesigning services, the PAC report said, requires “a more fundamental look at processes”, and while some departments are able to describe the benefits of transformation, they struggle to identify “the opportunity costs of failing to transform”.

“Incremental change is the government’s fall-back response to things which are deemed ‘too difficult’ and when transformation gets de-scoped,” the PAC said. “If senior leaders do not understand how transformation would reduce future operating costs, they will continue to under-invest. As part of business cases, departments should explicitly set out how they will resolve issues caused by changes to old legacy systems and data, and demonstrate how wider service redesign will reduce the future costs of the services they support.”

Lack of senior leadership buy-in

One of the key reasons why departments struggle is a lack of engagement from senior leadership in departments. The CDDO set up the Digital and Data Board in 2022 as part of its three-year roadmap. The board is composed of permanent secretaries supported by a dedicated steering group of senior civil servants, including digital, data and technology leaders from across government.

The PAC said in its report that the board is a “good start” to continued engagement from permanent secretaries on digital transformation, but added that it had heard “that some permanent secretaries have been sending deputies and have had to be reminded that they are expected to attend in person”.

“Committees on their own do not deliver anything if the right people do not attend and take required actions,” the report said. “Digital responsibilities, such as improving digital services and addressing the highest risk legacy systems, should be included in letters of appointment at the most senior levels in all departments.”

Digital skills shortages are also contributing to the lack of digital transformation. As government departments are making cuts in a difficult economic climate, some of these are “self-inflicted through headcount cuts”, and the PAC said this risks “costing government much more in the long run because opportunities to transform are foregone, and delays increase the risks of prolonging legacy systems”.

The government estimates that the number of digital, data and technology (DDaT) professionals in the civil service is 4.5%, which is half of what’s needed. Cyber security experts and data architects are in particularly short supply, as the government cannot compete with private sector pay.

“[The government] believes this can make a career in the civil service a more attractive proposition,” the PAC report said. “Nevertheless, we are still concerned that, if pay is consistently lower than outside the civil service, government is over-reliant on the goodwill of staff.”

Commenting on  the report, a Cabinet Office spokesperson said the government has a "comprehensive programme in place for recruiting and retaining technical skills and training civil servants in the vital digital skills needed to deliver modern public services".  “This includes increasing the size of the specialist digital, data and technology function across departments by over 10%, boosting access to digital training and improving specialist digital and data pay through reinvesting efficiency savings," the spokesperson said.   "We're stepping up our cyber security skills through increasing training and investment in developing cyber security skills at all levels, including Cyber Boot Camps and uptake in computer science."

The government has also opened up applications for its digital secondment scheme, aiming to bring private sector tech talent into public sector.  

Read more about government digital transformation

PAC chair Meg Hillier said that while the digital revolution is known for “rapid and accelerating change”, this has not been the case in government.

“Our inquiry has found that Whitehall’s digital services, far from transforming at the pace required, are capable of only piecemeal and incremental change,” she said. “Departments’ future-proofing abilities are hobbled by staff shortages, and a lack of support, accountability and focus from the top. In particular, a lack of cyber security experts should send a chill down the government’s spine.

“The government talks of its ambitions for digital transformation and efficiency, while actively cutting the very roles which could help achieve them,” said Hillier. “Our inquiry leaves us unconvinced that these aims will be achieved in the face of competing pressures and priorities.

“Digital must not be treated merely as a sideline, but must sit right at the heart of how government thinks about delivery,” she said. “Without swift and substantial modernisation, opportunities to improve services for the public will continue to be lost.”

The report said: “Business cases need to include basic costs of service provision and other details, such as numbers of staff needed to help run the service, to understand the baseline position and justify funding for improvement.”

A National Audit Office report, published in March 2023, also found that senior leadership in government departments need a better understanding of digital transformation.

The report recommended the government helps non-specialist leaders to understand the issues posed by legacy data and systems, as well as appoint at least one non-executive director with digital, data and technology expertise.

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