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Councils could save 13% of their budgets by going digital, says Nesta report

Nesta’s report recommends that “leading councils” should create a market for digital products to meet their needs

A report from innovation charity Nesta has found that by moving services online and moving to digital by default, councils could save 13% of their total budget.

Nesta commissioned Social Finance to model likely cost increases and how much digital transformation could save local government.

The study showed “an average unitary council could save up to 13% of its total budget by 2025, compared with the status quo” if their business model remains unchanged.

The report, published in conjunction with the Public Service Transformation Network, also found that councils could save up to 40% if they transform everything they do, how they procure and how they are organised.

“It has been estimated that moving all transactional services online – such as paying a fine, renewing a parking permit, applying for a passport and submitting a planning application – would save the government between £1.7 and £1.8 billion every year,” the report said.

Julie Simon, head of government innovation research at Nesta, said councils must think about how to adapt due to the reality of budget cuts.

“Although digital technologies are by no means a silver bullet, they can help councils improve on the important services they offer; transforming their delivery, stimulating economic growth and improving the way they manage themselves and their resources,” she said.

Digitisation saves costs

The report sets out a series of recommendations to help councils realise the cost-saving potential of digitisation to meet the demands of the public.

“The next phase of digitisation is to redesign services from end-to-end. This will ensure user pathways are smooth and frictionless and that the workforce can share data without having to resort to manual processes,” it said.

The report recommends that councils move all transactional services online and digitise back offices by 2020.

It also recommends that the Cabinet Office should “bring together key local government actors to define – and continuously update – open standards for data for the whole public sector”.  It added that leading councils should create a market for the latest digital products “in cases where local authority needs are not currently being met by off the peg systems”.

Other recommendations include asking city regions to be required to establish an office of data analytics as part of devolution criteria, with the aim of helping city leaders and public bodies analyse data to support reform and growth.

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The report highlights the danger of digital exclusion and asks councils to make sure “human support is available when services are moved online”.

“Councils should invest in accessibility by providing online and human navigation support to help people use digital services in public spaces, such as libraries and job centres,” the report said.

“They should also ensure that pathways between different services are seamless and jargon free, and that people with different digital needs are appropriately triaged.”

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