The public sector revolution has begun

Posted on September 18, 2014 · Posted in Accounting & Business

Public services are going through a revolution – a digital revolution. For reasons of cost and convenience, a wide range of public services will never be the same again.  From vehicle and driver licensing to tax assessments, service delivery is increasingly moving online.

 

For many people, the scale and speed of the transformation that is taking place may only become clear later this year when they start throwing away their car licence discs as the licence system becomes all digital, with non-payment detected by number plate recognition technology. This will be an extremely visual symbol of the way services are becoming virtual, but there has been steady progress over several years to reach this point.

 

Several government departments now strongly encourage application forms and annual returns to be submitted online. HMRC’s move to online self-assessment is just one example of this.  The Government’s ‘digital by default’ strategy makes it easiest to do things online, with an assumption that this is how things will, from now on, normally be done.

 

Driving licence renewals are a case in point, with a growing number of applications submitted online and drivers’ records stored digitally. The result is expected to be substantial savings, not just for the Government whose staff no longer need to manually input vast quantities of data.  Other savings will be passed on to drivers through lower insurance premiums, with insurers able to quickly access reliable information online on drivers’ records.

 

“The impetus was from Francis Maude, the Cabinet Office minister, saying the government has ‘paper factories’,” explains Helen Ripley, author of ACCA’s Business Development Manager – Public Sector and author of its report How e-business transforms public sector services in the UK.  “Certain offices just have lorry loads of paper.  Maude wants to eliminate this.”

 

This is not simply a desire by government to be environmentally friendly. More pressing is the need to cut costs and improve efficiency.  The process is similar to going shopping in Sainsbury’s or another large supermarket.  If the customer can be persuaded to self-service, fewer staff are required and overheads are reduced.

 

“The cost of transactions is just so much more around paper,” explains Ripley. “There are massive cost benefits if service users are more involved and take more responsibility.”

 

In the case of the Driving Standards Agency, the move to ‘digital by default’ is expected to save about 3% of annual costs. Staffing levels are falling by 20% – from 625 in 2012 to about 500.  This is not the result solely of the adoption of digital processes – there is also a broader attempt at improving management practices, for example with tighter monitoring of staff absenteeism.  But the drive to digital generates much of the productivity gain.

 

For HMRC, the efficiency benefits have been even more significant. HMRC calculates the cost of processing an online self-assessment tax return is about a pound – compared to £12 for a paper return.

 

Online service provision and other e-business practices can generate a wider range of benefits. The effective use of websites and social media can improve the interaction between the public sector, its service users and other citizens. There are opportunities for greater transparency in the way the public sector works and in making systems more accountable to users. Improved communication with public bodies such as hospitals and GPs could make it easier to change appointment times and reduce the number of missed appointments.

 

But as service users get used to the way that some private sector businesses provide immediate responses to emailed questions, there will be demands on public agencies to respond at similar speed. Those expectations will either not be met, or some administrative costs may actually rise, rather than fall.

 

“There is a worry that if public services become more accessible then people want more,” explains Ripley. Waiting times to see GPs act as a barrier which reduces demand.  Improving access to GPs is likely to significantly increase their workload.

 

Ripley adds that there are also policy concerns about moving services online when many people still do not have internet access, or who are resistant to the technology. About 15% of homes do not have a computer for reasons of poverty, or because residents do not have the skills to use computers. Public services cannot avoid their responsibilities to these citizens and must ensure their approach to e-business does not increase inequality and so penalise some of society’s most vulnerable people.

 

“There are so many issues relating to public services,” she says. “The corporate sector can exclude part of the market place.  The public sector cannot do that.  There is a lot of opposition [to the adoption of e-business practices], from people who are scared and don’t want to use the technology, also within public bodies there are people who work on the front line, who feel the service they give will be diminished and everything will move onto email.”

 

Ripley’s report – which began as a dissertation for her MSc – involved interviewing 31 public sector workers about their attitudes to e-business. While all recognised the benefits, some were concerned that the full adoption of e-business practices would detract from the true value of the services they provide, especially as many are proud of the face-to-face, specialist, customised advice they can offer.

 

But given the size of the efficiency savings available from online self-servicing – “quite huge” in the words of Ripley – the process is inevitable, while adopting safeguards for the vulnerable who do not have access to the internet. “As the government’s ‘digital by default’ policy accelerates, clearly there is a balancing act for UK central government departments, especially when it comes to data protection and the up-skilling and training of staff,” explains Ripley.

 

Best practice can improve the adoption of online service provision and overcome many of the problems, the report suggests. There should be ‘internal advocates’ within organisations – people who recognise the benefits that can be achieved from e-business.  Management should be open to listening to staff’s own suggestions on how to implement new systems and to make them better. Ultimately, e-business practices must be adopted only when it is appropriate for service users. Priority should be given to the elimination of tasks that  dull and repetitive, so freeing-up time for higher-level activities.

 

Public bodies must work hard to manage change well, concludes the report, to be prepared to make significant cultural shifts and persuade their more reluctant workers to support the move to e-business practices.  If they can do that, the public service revolution is much more likely to be a success that benefits almost everyone.

 

The report is published at http://www.accaglobal.com/content/dam/acca/global/PDF-technical/public-sector/tech-tp-hettd.pdf