In 2016, local government is at a crossroads – with last Autumn's Spending Review and Local Government Settlement, councils have had to face cuts to government grants, with yet more tightening of purse string expected to be announced in today's Budget to help Chancellor George Osborne balance the books by the end of the decade.
Councils have already made significant cuts over the past five years with many council leaders now saying that there are no more efficiency savings to be made.
But according to a new report, local authorities could save £14.7 billion a year by going digital by default, following in the footsteps of cities like Copenhagen which has revolutionised services with 80% of transactions now happening online.
The London Borough of Harrow has already saved £1.55 million by doing the same, showing that digitalisation can provide part of the answer to the fiscal challenges faced by local authorities.
But the report, by Innovation charity Nesta and the Public Service Transformation Network, a group which promotes the integration of public services, says that digital technologies are no immediate silver bullet – instead it sets out a vision of where councils might be in 2025 to better understand what opportunities they face now.
'While the sector has made considerable progress in moving transactional services online, most councils have a long way to go to deliver smooth, frictionless services and fully digitise their back offices,' it says. 'Digitisation isn’t just about developing digital services; depending on the level of ambition, digital tools can help transform labour intensive caring services, contribute to faster local economic growth, renew local democracy – and ultimately, change the way that councils organise themselves and manage their resources.'
The report estimates that moving all transactional services online – from paying a fine, renewing a parking permit and applying for a passport, to submitting a planning application – would save the government between £1.7 and £1.8 billion every year.
So far, however, councils have mostly digitised transactions in isolation, creating a digital replica of outdated existing processes or shifting the bottlenecks elsewhere.
Many departments remain unable to share data easily or are reliant on manual processes to make sense of ‘digital’ transactions. For instance, more than 50% of councils are manually re-keying over half of the data they receive from e-forms.
The report recommends that councils move all transactional services online and fully digitise their back offices by 2020, and 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.
Leading councils should get together to create a market for new digital products in cases where off-the-peg solutions are not meeting their needs, and City regions should be required to establish an Office of Data Analytics (ODA) as part of devolution settlements.
As part of this '2025 vision', siloed services within councils will be replaced by multi-agency teams dealing with specific local challenges, the workforce will bve much more mobile, and third party apps will become important for people to make use of public services, allowing them to stream personalised content on local democracy, jobs and services.
'As budget cuts begin to bite councils have found themselves at a crossroads,' said Julie Simon, head of government innovation research at Nesta. '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 ultimately improving the way they manage themselves and their resources.'