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The Institute of Directors (IoD) has called on the government focus on creating an environment for innovation rather than delivering specific technologies to take full advantage of digital transformation.
The IoD report, entitled Digital government and the productivity puzzle, said the government needs to do more to open “itself up to digital transformation”, including taking advantage of innovation and technologies that already exist in the private sector.
A survey of IoD members, which provided the basis for the report, found that 77% of those surveyed thought government is “poorly equipped to take advantage of technological advances and automation”.
“This was underscored by the fact the majority of respondents felt online payments, banking, and data entry provided by the private sector were better than the government’s own digital services,” the report said.
It said that although government digital services have improved, they are still not up to scratch compared with those available in the private sector.
Despite the Government Digital Service (GDS) having made huge inroads in digital transformation, momentum has slowed down.
Although GDS has been successful in creating and providing “useable services and content”, it has not been as successful in procurement and making Whitehall more “participative, open and accountable”.
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The survey results echo the National Audit Office report, published in 2017, which said GDS needs to have a clearer role as its accountabilities remain unclear. In fact, the majority of those surveyed do not believe GDS should expand further, and instead called for government to improve the way it engages with the private sector, and focusing on outcome rather than delivering a specific technology.
“The government does not itself need to be an innovator or developer of technologies, but instead needs to create the environment in which technologies and processes that have been honed in the private sector can be adapted to deliver better services,” the report said.
A report from the Confederation of British Industry (CBI), published last year, highlighted the link between low uptake of technology and the UK’s productivity gap. The IoD report also found a link between adoption of technology and productivity.
It said that although there is plenty of digital disruption going on in every sector, overall business investment in technology “is subdued and productivity growth seems unable to get out of the starting blocks”.
However, this doesn’t just cover businesses. Within government, proper use of technology means that “some projects which currently require hundreds if not thousands of man-hours can be significantly streamlined to such a degree that they happen almost labour-free”, the report said.
“Adopting new technology is now widely acknowledged as a key method for the government to make efficiency gains and savings to alleviate strains on the public purse. However, there is both increasing awareness and acknowledgement that efficiency gains alone are not the only benefits to be derived through new technology,” it added.
“There is now an opportunity to redesign services, develop entirely new ‘fit for purpose’ services to support reforming policies, and therefore, a significant generational opportunity to tackle the productivity puzzle in the public sector.”
Public sector lagging behind
Stephen Martin, director general of the IoD, said business leaders still feel the public sector is lagging “well behind” the private sector, and want government to make better use of the knowledge and expertise that exists in the private sector.
“The gains could be not only better and more cost-efficient services, but also reduced time wasted on form-filling for companies,” he said. “Raising the UK’s productivity is the driving force behind the government’s economic policy, so they should be looking for opportunities to work with the private sector to improve their digital offering.”