In the past week, HSBC and Boots chemists have between them announced thousands of job cuts, each citing the growth of digital. They are not alone – in recent months Sainsbury’s, Standard Chartered, Lloyd’s bank and others have said similar things.
Such announcements have led to fears about a digital cull of jobs as companies increasingly automate parts of their business with technology, to the extent that people simply shrug their shoulders at the apparent inevitably of it all.
It was ever thus. Throughout the history of business technology, scaremongers have warned that IT is going to eliminate thousands upon thousands of jobs, leaving millions out of work. You might have noticed that it never happened.
That’s not to say that technology doesn’t have an effect – clearly hundreds of thousands of UK workers have lost jobs as a result of digital transformation in the past 30 years. But warnings of subsequent employment crises simply haven’t come true. New jobs have been created, often as a direct result of new technologies, needing new skills.
However, one recurring trend has been the time lag between the loss of old jobs and their replacement with new ones. This is not only the case with IT – look at the swathes of miners left unemployed in the 1980s, or the decimation of the fishing industry on the North Sea coast. Economic progress eventually created new work, even if that work was very different.
Fears of a digital scrapheap for old jobs are unfounded, but nobody seems to be learning from those lessons of history. It is obvious that many current roles will no longer be needed as companies – and governments – make better use of technology and automate more functions. There is no doubt that people will be put out of work as a result. We know with absolute certainty this will happen, even if we don’t know exactly where or when.
So why does nobody plan ahead to ease this digital transition? The emerging digital jobs cull is not a failure of employment, it’s a failure of training. Where do all those HSBC and Boots workers turn to for help gaining the new skills they will need for the digital economy that replaced them?
Companies and government share responsibility for making access to training easier. Employers shedding jobs through digital transformation should be encouraged – forced? – to offer training opportunities to affected staff.
The government has a welcome focus on helping young people to train through apprenticeships – but is much less proactive in helping experienced workers affected by the ongoing digital shift in the economy.
The UK’s current high employment levels risk masking the real threat from the gap between digital culling jobs and creating them. The UK needs to plan ahead to help affected workers bridge that gap with training for the new skills they will need.
We’d like to let you in on a little secret.
In the past week, Computer Weekly uncovered IT problems at two NHS trusts in the north-west of London. In one, medical staff were unable to access patient information, leading to emergency cases being diverted to other hospitals. In the other, a major systems upgrade has been delayed, causing “great difficulties” for staff.
The stories originated – as many good stories do – from a Computer Weekly source. But here’s the secret – having received the tip-off, we rang up the affected NHS trust and they admitted the problems and gave us the details. It was a good story.
We then realised that, due to a rather confusing website, we had rung the wrong NHS trust. The original story was true – we rang the correct trust and they admitted to their problems too. But in effect, we randomly rang a large NHS trust, only to find they had major IT problems as well.
A happy coincidence for us, perhaps. But it also came a couple of weeks after we revealed major technology issues at a south London trust too, although those were not so recent. You can’t help but think that maybe such stories are not isolated cases.
The NHS, as everyone knows, is at a crossroads. Faced with an aging population and austerity budgets, it’s been running out of cash and in some cases patient care has suffered. The health service needs an extra £8bn a year and the government has promised to find the money.
Meanwhile, many in the NHS are waking up to the fact that technology offers huge opportunities to cut costs and transform elements of patient care. Yet we still barely have the basics in place – patchy use of electronic medical records and patient administration systems, little or no integration of records between different trusts, let alone between GPs and their local health providers.
Much of the NHS is still suffering from the legacy of the £12bn National Programme for IT that promised so much and delivered so very little. Many NHS organisations are playing catch-up, despite health secretary Jeremy Hunt’s promise of a “paperless NHS” by 2018.
If we can stumble into IT problems at one NHS trust, how many are there having similar difficulties? With so many challenges facing the NHS, technology cannot become the forgotten solution.
Imagine this: The new century is barely a year or two old. You’re a programmer, working on one of the most critical software projects in the UK, to build the new national flight control system for air traffic controllers.
The new system goes live in 2002 and, generally, it’s all gone well. Then, 12 years later, a bug you unwittingly left in the code brings down the entire UK air traffic control causing chaos across the country. You probably wouldn’t even have known it was your code that caused the problem.
Think even further back. Imagine you were working for a high-street bank in the 1970s. You were programming the most critical application in the company – the central transaction engine that underpins the millions of current accounts held by the bank. You were probably programming in assembler code – the lowest level of programming language, working right down at the guts of the IBM mainframe that ran the bank. Perhaps, if you were lucky, you were using a more modern language like Cobol.
Nearly 40 years later, that system you helped to build has crashed – the bank’s customers can’t access their accounts, make payments or withdraw cash. The ATMs, online and mobile banking apps of the bank – technologies you could barely have imagined when you cut that assembler code – are not working. You wouldn’t have been able to envisage such a problem way back when.
Yet this is the reality for many major firms of longstanding today – as Nats, the air traffic control service found out in December 2014 when its systems crashed, and as Royal Bank of Scotland discovered when its IT systems failed in 2012 and froze 12 million customer accounts. They were just the unlucky ones who got caught out.
IT leaders talk a lot about legacy technology, and often they mean old hardware or out of date networking equipment. Perhaps the biggest single technological challenge facing many large companies – and especially the big retail banks – is their ageing legacy software. It’s had so many new bits bolted onto it to help move into the internet, mobile and digital ages; there are barely any programmers left with the skills to keep the original applications running; and there is very little documentation to help anyone work it all out.
As long as these creaking applications kept going, nobody dared wonder what might happen if they stopped. But the world has changed – we’re all going digital and agile and for the first time, those big old back-office systems are becoming a hindrance, not a help. Where once they were the source of competitive advantage and a barrier to entry for potential rivals, they are now the very reason that startups and new entrants are on the verge of disrupting your business.
Which CEO is going to be brave enough to say, let’s replace the lot? Those banks that have tried found it cost billions more than they anticipated, and took a lot longer than planned. If the average tenure of a FTSE100 CEO is barely three or four years, who wants to be the one that spends all that money for so little return before their time at the company is up? The last thing any CEO wants is for their legacy to be as the person who screwed up the firm with that costly, painful IT overhaul.
Nobody can put a price on the risk of keeping that legacy software, so nobody can make the case for replacing it. At what point does a CEO accept that not moving off the old system becomes a bigger risk or a greater cost than moving off it?
These are questions that many boardrooms will – perhaps to their surprise – find themselves facing in the next five to 10 years. Nobody, even now, develops software thinking of what it might be expected to do in 20 or even 10 years’ time. That’s someone else’s problem. Yet we are building a digital economy on software. Software is eating the world, as Marc Andreessen, co-founder of Netscape, once said. Software might just spit back out again too.
Look at the Post Office: It insists that the accounting software it provides to subpostmasters is free of problems. But in over 100 cases, subpostmasters have blamed the system for errors that led to many receiving heavy fines and even jail terms for alleged false accounting – blame the Post Office resolutely rejects. The Post Office points out that the number of affected subpostmasters is tiny – not even 1% of the total. Surely, they imply, the fact that the system works for 99%-plus of its users shows that the problem cannot be the software?
What they – and many other organisations – don’t seem to get, is that over the lifetime of a software application, even a 0.1% error rate is at some point going to cause a problem for someone. The only question is, how big will that problem be? If only a tiny proportion of users are affected, that perhaps makes it more – not less – likely that some small problem in the software caused the issue. It is well within the margin of error for software quality and testing.
For all the great advances made through software, it is not and probably never will be perfect. As Nats pointed out, testing every possible scenario the air traffic control software could have encountered would have taken over 100 years.
Of course, software development is becoming smarter and better, and with iterative, agile techniques and componentised microservices it’s possible to rapidly isolate faults and make sure any problems they cause are more manageable.
But it’s almost impossible to predict whether some unusual or unexpected combination of activities will one day cause a catastrophic crash of the complex software your business relies on. It is hugely to the credit of the software industry that such crashes are so infrequent. In a digital world, this is increasingly going to be a fact of business life. If you don’t have software bugs on your corporate risk register yet, you really should.
Somewhere in your organisation right now, a talented software developer might just have unwittingly written the line of code that brings down your company in 10 years’ time – and there’s almost nothing you can do about it.
“Digital” is undoubtedly the buzzword of the day in conversations between IT leaders and their executive counterparts in the organisation. But it’s only recently that the full implications of “going digital” are becoming clear in the IT department.
We hear plenty about how digital is changing business – increasing customer engagement, opening up new channels, breaking down old silos and so on. We hear even more about digital in the public sector – government as a platform, reform of service delivery, agile policy design and so forth.
But we’ve heard a lot less about what digital means for IT departments, the skills they need and the way IT develops, delivers and supports technology. It’s increasingly clear that the changes are more fundamental than many had thought. We’ve heard a lot of talk about what Gartner calls “bimodal IT” – effectively, having one IT team responsible for the traditional IT operational disciplines for keeping the lights on; and another to look after the agile, fast-moving, digital stuff.
But at best, this two-speed IT is only a transitional phase. It’s certainly not something you hear talked about at the most advanced digital businesses. Hailo, the taxi app, is an example – developing its software using highly componentised microservices, using public cloud and DevOps techniques to deliver the sort of flexibility and speed of change that conventional IT departments would barely recognise.
In the US, companies like Walmart, Paypal and Yahoo are using OpenStack – an open source tool created mostly for private clouds but being used by such firms as a highly flexible environment for managing IT operations. The way they develop software, test, release and run it is very different to the traditional corporate datacentre.
In the same way that digital promises to break down barriers between businesses and customers, and between citizens and government, it also breaks down barriers between IT and the business. Digital doesn’t just put IT teams at the heart of business, in many situations it means IT teams are the business. The ability to rapidly develop and release new software is what will determine successful businesses in the digital era. It will be the difference between success and failure.
IT leaders and their teams need to prepare for the digital IT department – it’s already starting to happen in your competitors.
Earlier this week, I wrote here that a new Conservative government could mean more changes in government IT than such administrative consistency would suggest. It already seems those changes may be even closer than anticipated.
I speculated in that previous blog post that civil service CEO John Manzoni is likely to put his stamp on digital government now he has been in post for six months and the election is out of the way. In a speech to the FDA yesterday (14 May 2015), the civil service union, Manzoni confirmed as much.
The key quote, reported by Civil Service World, was this: “The good stuff happens when you put great people out in the departments. It doesn’t happen when you put great people in the centre.”
This surely increases the likelihood of the Government Digital Service (GDS) being slimmed down and much of its delivery responsibilities handed back to departments. I’d suggest this was always the eventual plan – GDS looks after strategy, departments look after delivery, and outsourcers are brought in once a service or system is into the support and maintenance phase.
More key quotes from Manzoni:
“Our first step was to intervene and this was the Francis Maude era. There was an intervention in stopping all the bad stuff happening. But what we hadn’t figured out how to do was how to enable the good stuff to happen. And the good stuff happens when you put great people out in the departments. It doesn’t happen when you put great people in the centre…
“The modus operandi of the last five years won’t get us where we want to be… I know we can be more efficient; the question is how do we mobilise the organisation in getting there? And I think that there is a recognition, even at the political level, that collaboration needs to improve.”
Manzoni suggested that Maude’s replacement as Cabinet Office minister, Matt Hancock, was chosen specifically because of his relationship with chancellor George Osborne – Hancock was an aide to Osborne at the Treasury.
“In my conversations with Matt he’s saying we need to draw the centre, the Treasury and Cabinet Office more collectively together, and it’s something I’ve been saying since I arrived,” said Manzoni. “So I’m actually quite encouraged that we’re getting it and I think that is a great sign of the future for how we work in a more collaborative way.”
The next transformative phase of the drive to digital government is “government as a platform” (GaaP), and we know that GDS is working closely with the Treasury – and consultants McKinsey – on the business case for GaaP due to its cross-departmental nature. Is this the model for the future? Could we even see some of the current Cabinet Office responsibilities transferred to the Treasury, with the latter becoming the driver of cross-departmental change?
You could imagine the Crown Commercial Service (CCS) – the Cabinet Office procurement agency – moving to the Treasury. Why wouldn’t you have your purchasing team as part of your finance and accounting team? CCS has attracted criticism, especially around some aspects of technology procurement, and new management inside the Treasury could be an opportunity to tackle those issues.
At a political level, the Tories are making much of their “100-day plan” to introduce some of their more controversial legislation in the forthcoming Queen’s Speech and to get them in place before Labour has a chance to sort itself out and elect a new leader.
Perhaps we’ll find out soon if the 100 days of change extend to the shape of management and delivery in digital government too.
On first impressions, the Conservative election victory appears to be business as usual for IT across government. The challenges before the election are the same challenges now; the civil service leadership faces are the same, even if the names on the ministerial doors might change – not least in the case of Francis Maude, formerly the political driver behind digital reform but now ennobled as trade minister, with Matt Hancock picking up Cabinet Office minister responsibility for digital government.
But I have a feeling there will be surprises – that things will change more over the next year or two than some might expect. Here’s a personal look at what might change, what needs to change, and what will trundle on much the same.
There will be changes at the Government Digital Service (GDS) over the next 12-18 months – not as a result of any particular problems or deficiencies (although there will inevitably be some who will portray it as such, given the negativity towards GDS in some quarters) – but as a result of an ongoing shift in GDS’s role and focus.
GDS for the last five years has been seen as Whitehall’s digital department, when its real purpose has been to create strategy and demonstrate and drive change more widely. I would expect that purpose to become clearer in the coming years. What will that mean in practice? Here are a few guesses:
Support and development of the Gov.uk website will be sold off or mutualised. This will follow a model similar to the Crown Hosting Service and the Shared Services Centre, where Ark Data Centres and Steria respectively run operations as a joint venture, part-owned by government. There’s no longer a strategic need for Gov.uk to be run entirely in-house – the technology infrastructure and publishing platform are in place, and content management is devolved to departments. It’s becoming a commodity service and is likely to be commercialised as such.
Developing digital transactions will be the responsibility of departments, driven from the centre by Civil Service CEO John Manzoni. It’s often forgotten that Manzoni, appointed in October 2014, is the person ultimately responsible and accountable for digital transformation across Whitehall – not GDS chief Mike Bracken.
He’s had six months to assimilate his new job, and to assess the needs for civil service reform and greater efficiency. It’s significant that Matt Hancock has not taken on the entire job previously held by Francis Maude – we effectively have two Cabinet Office ministers in Hancock and Oliver Letwin. The latter is more senior, but Hancock has been given a focus on “efficiency and civil service reform” – the new political muscle behind Manzoni’s plans.
GDS has already announced that its initial transformation programme is over – the 25 digital “exemplar” transactions that were the focus of the first wave of digital development and were mostly, to some degree, implemented before the election. Responsibility for those exemplars and further transactions has been gradually handed back to the departments as their own digital teams have expanded. You can expect to see GDS being much less involved in the day-to-day delivery of digital transactions from now on.
Instead, GDS’s main Whitehall focus will be the government as a platform (GaaP) strategy, as well as overall digital government direction, setting open standards for interoperability and data, and enforcing red lines around technology purchasing.
Consultancy McKinsey has been brought in by the Treasury to evaluate the financial aspects of GaaP – Mike Bracken’s first post-Purdah tweets emphasised that GDS is still in charge of “strategy, discovery and tech” for the programme. In effect, that means McKinsey is working out the potential savings – watch out for that figure to be announced by chancellor George Osborne in a Budget statement later this year or next. GaaP is the next stage of the intended digital overhaul of central government, and will increasingly be the focus for GDS.
In general, as digital services move from strategy to delivery to ongoing support, this three-tier model of GDS (strategy), departments (delivery) and private sector / joint ventures (support) will become clear.
Remember that the GDS recruitment pitch to bring digital experts out of the private sector and into the civil service has always been to say: “Come and work for us for two or three years and help us change government”. Outside of a permanent core team, the idea was always to flex in size and skills according to the next transformation task ahead. Some of those core team members will go during the next five-year parliamentary cycle – CTO Liam Maxwell, for example, is contracted until 2018 and if he feels he has completed the overhaul of technology delivery and contracting he set out to achieve, he’s likely to move on.
What needs to change but might not
Over the past couple of years, the area mentioned most often as a problem has been procurement. The agile GDS and the process-oriented Crown Commercial Service (CCS) have at times proved to be difficult bedfellows. For all the good words about making more use of SME suppliers, many insiders feel that CCS’s instincts are towards the big players, the likes of Capita.
Everybody loves G-Cloud, but many of the team that created it (and have since left the civil service) feel that CCS doesn’t like it and fear for its future. CCS is at least being pragmatic – its recent tender notice for the replacement for the unpopular Consultancy One framework mentioned the possibility of a “G-Cloud like” arrangement. Insiders say that CCS has tried to use purchasing models that work for commodities like stationery and office furniture, but fails to appreciate the flexibility needed by digital and technology.
There seems little doubt that som e people close to GDS would prefer to see more tech-related purchasing driven by GDS principles. But CCS is a big beast and hard to change.
GDS has also been tasked with closer working with local government on its digital transformation – but it’s not yet clear how that will work and or even what it means in practice, beyond a commitment announced by Osborne in his March Budget. The digital challenge for councils is arguably bigger than that in Whitehall, and the cost cuts they need to make are significant. But outside of a core of forward-thinking local authorities, there are still big question marks about whether enough council CEOs really “get” digital to deliver the scale of radical change that is needed in the sector.
Carry on, regardless
Universal Credit will continue its slow progress to the much-awaited digital system currently being trialled in Sutton in south London. The troubled programme remains a huge technology risk for the government – barely 1% of all benefit claims are on Universal Credit despite the original objective to have the vast majority of claimants on the system by now. Roll-out continues, but the same risks remain.
Francis Maude promised that all the big outsourcing deals inherited in 2010 from the previous Labour government would have gone by 2020. Most of them conclude in the next two or three years. GaaP is not going to be developed enough – or a panacea – to replace them all in that time. The process of contract disaggregation will continue; some incumbent suppliers will gain short-term extensions; some will win a few of the disaggregated contracts; you can almost guarantee that some of the transitions will go badly. But, largely, Maude’s promise will be fulfilled.
Whether that leads to a greater involvement for SME suppliers is less clear. The Cabinet Office basically bodged the figures to claim it achieved its target of 25% of new spending going to SMEs. The target for technology was meant to be 50%, and in G-Cloud that’s been achieved. But the amount spent with tech SMEs on G-Cloud – roughly half of a cumulative £559m over three years so far – is tiny compared to the billions still being spent with big suppliers on outsourcing deals.
The biggest outsourcing deal of them all, HM Revenue & Customs’ £800m a year Aspire contract, expects to save £200m or 25% of that annual cost through disaggregation. That’s still £600m a year of external supplier spend – and will half or even a quarter of that go to directly contracted SMEs? No way. Once the big contracts are replaced, it’s going to be almost impossible to say that even 25% of new IT spend has gone to SMEs without some very creative accounting on behalf of the big suppliers claiming much greater use of small businesses in their supply chain.
The aspiration to make greater use of SMEs will continue – and many SMEs will benefit – but the target numbers will be difficult to prove. There is still plenty of money to be made for the big outsourcers from the new government.
It’s been said that the general election this week is the most important for a generation. That’s probably true on a number of levels – and certainly within the microcosm of the IT and digital community.
Technology is not going to decide who wins, but it is going to underpin the delivery of almost every major policy enacted over the next five years by whatever parties make up the new administration. This will be the most digital government ever – frankly, whether they like it or not.
Fortunately, the politicians appear to know this. Every major party’s manifesto recognised the importance of broadband, startups, education, research and digital public services.
The IT community expects and demands that it receives the same sort of favourable political treatment as financial services, manufacturing or construction. We’re not there yet. But a digital Britain ticks every box in terms of the issues that will determine the economic success of the new administration – rebalancing the economy, growing new businesses, reversing the export trade gap, and more.
In healthcare, there is simply no way the NHS will be able to meet demand without a radical growth in technology adoption and innovation. In education, children will not meet the future needs of employers unless they have computing skills. Name a policy priority, and tech is at its heart.
This criticality must be acknowledged by the next government in its support and policies for the technology community. We will need a dedicated digital minister, with a far-reaching brief to promote the digital economy and to push through IT-enabled change in Whitehall. We need to build a broadband infrastructure that will meet the needs of the next 20 years, not just the next five. We need digitally enlightened policies that recognise how technology can radically transform the business of government, not simply automate the way things have always worked.
There has been good progress over the past five years, but there is a lot more yet to do – and a lot more benefit to be achieved in terms of cost cuts, service improvements and government efficiency. There is a digital dividend awaiting a government that gets it right. We hope and expect that they accept the challenge.
The closer we’ve come to the UK general election, the more it seems the Government Digital Service (GDS) is taking a public bashing. You might wonder why.
It’s certainly true to say that GDS divides opinion across the public sector and among IT suppliers – it has become Marmite for many observers and practitioners of government IT; you either love it or hate it. That in itself is understandable – when any new organisation challenges the status quo, with its institutional inertia and entrenched vested interests, there will be a backlash.
Indeed, GDS quite deliberately set out to slay sacred cows – the model for government IT by the 2010 election was clearly broken, and Cabinet Office minister Francis Maude gave GDS a remit specifically to shake things up.
Some of the vested interests that GDS has upset deserved everything that came their way – the big system integrators raking in billions of pounds; the cosy relationships of old-school IT managers waiting out for their civil service pensions; the endless procurement cycles.
But the recent noises off feel different.
It’s important to point out here that GDS is currently unable to defend itself against criticism – the pre-election purdah rules for civil servants mean it isn’t allowed to offer a public perspective on its work. Of course that’s great for anyone wanting to leak or publish critical information, knowing that nobody from GDS will be able to comment or counter.
But equally, that doesn’t mean some of that criticism is undeserved.
Even some of GDS’s biggest supporters acknowledge its flaws. There are valid concerns that need to be discussed – insiders have questioned the “build everything” preference and an over-dependence on agile; a lack of external scrutiny; delays to critical programmes such as the Verify identity assurance service; accusations of hubris and arrogance towards departmental IT teams. You might add others, not least the failed rural payments system.
It’s also fair to say that many of the changes GDS has put in place will only show their real benefits over the life of the next government – enforcing open standards; eliminating big outsourcing deals and ending inflexible legacy contracts; encouraging SMEs through G-Cloud; and others.
I’ll declare my interest by saying I’m still glass-half-full about GDS – but it has got things wrong and it needs to deal with critical feedback better and more openly (once out of purdah). I realise the irony of writing that GDS needs to deal with feedback better, at a time when it can’t respond to feedback. But I hope readers will forgive me on the timing of this article, for I wanted to make observations after some of the recent commentary elsewhere.
Let’s look at some of the most recent criticism. This month, consultancy BDO published a report criticising GDS for its dual delivery and advisory role in government, highlighting the risks BDO sees and offering its “high-level vision for GDS’s future”. The report was, I’m told, not externally commissioned, but was proactively written by BDO, apparently without any input or discussion with GDS itself. Frankly, it’s the most self-serving document you can imagine – you could summarise it thus: “GDS needs more input from private sector advisory firms, says big private sector advisory firm.”
This week, The Register reported on a leaked report from July 2014 by a consultancy brought in to review GDS’s people processes, which highlighted problems with high staff turnover, criticisms of leadership and recruitment, and accusations of favouritism.
I wouldn’t criticise The Reg for publishing – but here too you might question the timing of the leak itself. Because of purdah, GDS can’t explain how it responded to the report, whether it has addressed all those criticisms in the 10 months since, nor put forward any of the GDS staff who outside purdah use Twitter to regularly talk about how much they enjoy working there.
Let’s not forget that GDS is barely three-and-a-half years old, and has gone from nothing to more than 300 employees plus contractors in such a short time. Any new organisation that grows at that rate is going to have staff problems and make mistakes in people management along the way.
Glass half full, admittedly.
GDS has rubbed a lot of people up the wrong way – mostly, because it had to. But after the election, and despite the public support it has received from the Conservatives, Labour and the Liberal Democrats, there’s bound to be some review of where GDS goes next.
We already know, for example, that McKinsey has been brought in to help work on the business case for GDS’s government as a platform strategy – not the sort of consultancy you would expect GDS to use but chosen, apparently, because the Treasury likes them.
We know too, that some of the big IT suppliers that have seen their new business from Whitehall diminish under GDS have been lobbying Labour over the last couple of years. They want their toys back.
So perhaps it’s inevitable that GDS’s critics see the election period as an opportunity to stake their claim in the hope of changing things post-election. Just to say it again – some of those criticisms are fair. Some are not.
But so far there is one thing missing from the critics and the leaks – what is their alternative? Even if GDS has made mistakes, got things wrong and not delivered as much as it hoped (all things which I think GDS management would privately admit) – nobody is offering a better solution. It’s easy to point a finger and have a moan, it’s not so easy to take accountability and propose something better.
Once the election is out of the way, there will be an opportunity to take stock. GDS needs to initiate such a process – open itself up to feedback and criticism; be honest and open in public about where it needs to improve and how it intends to do so. The worst thing GDS could do is withdraw behind barriers and ignore its critics – that would be an insult to those friends and supporters who have valid observations to make. GDS is a public body, pushing forward with a programme that promises to transform public service delivery. That has to be done transparently, openly and honestly, without hubris from GDS or rancour from critics.
For a little perspective, the following is well worth a read. Take a look through and see what you think, before I say where it’s from.
“Mid-way through our efforts to put government online, we have done much but not as much as we would like. It’s easy to point, poke fun or make a living as a commentator on what we’ve done so far (as so many do), but much harder to see what next. My thinking is that realisation is dawning that online government is just as much about government as it is about online. That one is not different from the other. So where online services fail to get the boost that we expect, it is not necessarily a failing of implementation but just as much the fact that we have metaversed the status quo.
“The realisation that as long as online government reflects offline government, take-up will be low will, I think (hope/believe) drive a different set of changes… Issues like we have seen where technology and business issues conspired to cause enormous pain mean that we will have to rethink delivery controls. Spending will tighten as we enter another financial review round. The potential for central infrastructure will be fully realised and people will commit resource to exploiting it rather than exploiting ways to get out of it. There are other things in this storm too – some that I can see, some that I can feel and some that I can’t talk about. All of them together create a one time, once in a generation chance, to make some changes come through the system – to undo hierarchies, convoluted processes, business rigidities and long-time resistance.
“As we break down and through all of those barriers, new things will happen. The great thing is that it will be possible to see this storm unfold in real time and see what actions are put in place that might lead to the new metaverse, one that is not a reflection of the status quo. One that is genuinely new. One that places what can be done online at the heart of delivery and looks to find ways to wholesale the online service to a variety of retail channels – government people, intermediaries and the citizen or business themself. And once we are past the stigma of ‘e-government’ and we have real services working effectively and widely used, the potential for further change will become apparent. Because, as the storm is unfolding, people will be conjuring up new things that rely on new business structures and processes – things that expect walls between silos not to be there rather than assuming that they will be there and hobbling the service because of it.”
If that was published on a GDS blog following the election, nobody would be surprised. It’s not unlike the sort of article that GDS chief Mike Bracken has written in the past about the challenges and opportunities of digital government.
But that was written in July 2003, by a former government IT chief, Alan Mather, who was involved with development of several critical Whitehall IT systems that are still in use today, such as the Government Gateway and online tax self-assessment. It shows how much government IT continues to reinvent the past, and how far it still has to go to deliver what everyone knows it can and must. GDS isn’t perfect, but it’s better than what it replaced; it has achieved a lot – even if less than hoped – and right now it’s the best we have. So let’s make it better.
As Mather wrote 12 years ago: “It’s easy to point, poke fun or make a living as a commentator on what we’ve done so far (as so many do), but much harder to see what next”.
Local government IT leaders have spent the last five years of austerity implementing the most dramatic cost cuts the sector has ever seen. Yet they await a new government after the UK general election that is likely to expect even greater cuts, regardless of who is in power in Westminster.
This was the context in which council IT chiefs came together for last week’s conference for Socitm, the local government user group. I was privileged to be invited to chair the event, and listen to the debate about the challenges facing councils in the coming years.
You could summarise the day as follows: Radical change is needed in the delivery of local public services, but is local government capable of being radical enough?
Among the more enlightened council IT leaders, there is recognition of the opportunity that going digital offers to deliver that radical change. They know that the key to achieving this is widespread collaboration to share ideas, resources, software, experiences and best practices. But they also privately admit that, while individual councils may understand, far too many authorities simply don’t get it.
One IT chief told me he had sat in on meetings with council CEOs where it was abundantly clear they had no idea about digital and what it means – its potential to reshape public service delivery at much lower cost.
The reality is that councils have delivered austerity cuts predominantly by reducing costs of the way they have always done things – and not by changing how they do things. Costs have been salami-sliced, reducing bureaucracy (a good thing) but often cutting back on frontline services (a bad thing).
The most radical move by many councils has been merging functions with neighbouring authorities – still running services the same way, but using economies of scale to cut the resources needed to run them. Or they have done what they believe to be something radical and outsourced huge chunks of service delivery to the private sector.
As Mark Thompson, author of Digitizing Government and a keynote speaker at Socitm, said: “Renewal of multi-year outsourced IT contracts constitutes a failure of public services”, and you could easily take out the letters “IT” from that sentence and find it to be true in many cases.
Lack of radical thinking
There is still little evidence that anyone is doing the necessary level of radical thinking to completely reshape the sector. The question to address, surely, is not how to make the existing local government system cheaper to run, but what is the most efficient way to deliver local public services nationwide? Instead of cutting costs by slicing back on resources in the existing administrative structure, why aren’t we asking how much cheaper could local services be delivered using a radically different structure?
Local government is simply a system of administration – a historic form of bureaucracy designed in a pre-technology time as the best way to deliver analogue services. If you were setting up a system of local public services from scratch, you would never establish it the way it runs today.
There are 433 local authorities of some form across the UK. Do we really need that many?
The biggest unitary council is Birmingham, covering about a million people. On that basis, why don’t we have 60 local authorities of similar size? Frankly, I’d wager that we could operate comfortably with half that amount – 30 back-office management and administration operations, supported by a few hundred frontline local service delivery hubs.
Citizens don’t care where the council office is – they just want somewhere local to go if they need to talk to someone. And as more public services are delivered digitally, so the volume of local face-to-face transactions will shrink. Remember – most public services are delivered by local authorities, not by central government.
Instead, we’re on the brink of having 433 councils, most of which will build their own digital services, duplicating effort, buying from a dwindling number of unresponsive software suppliers that dominate the market, trying to maintain their local administrative power base, delivering services in essentially the same way as ever, just at slightly lower cost. And often, reducing service levels to meet their austerity budget.
The problem is that asking for the sort of radical changes needed is, to use the obvious cliché, like asking turkeys to vote for Christmas. How do you convince 433 council CEOs to agree to put 400 of them out of a job? Not to mention the number of back-office managers that would go the same way – albeit to preserve frontline services.
Of those 433 councils, 326 collect council tax and business rates. Do we really need 326 different IT systems to collect council tax and rates? Surely a tenth that number would collect cash more efficiently. You can apply the same logic to every IT system used by councils.
If a group of councils band together to develop new digital services – and those services work – why wouldn’t they make the system available either on a shared basis or as open source for other councils to use?
Local interest over local services
Another speaker at Socitm told a story that summarises the problem neatly. Eddie Copeland is head of the technology policy unit at think-tank Policy Exchange; he cited the developer of a mobile app called AppyParking, which uses open data published by councils to guide London drivers to available parking zones. Of course, not all that data is actually published as open data, and the developer wrote to every London council asking for the relevant information. Having received positive responses from most, he set about sourcing £250,000 of private investment to develop the app.
That was until two London boroughs decided not to release the data, because they might want to use it for a similar app themselves.
The lack of logic – and absence of understanding of radical digital change – embodied by those two councils is a warning bell for the future of all local government. They put their own local interest over that of local services. Instead of allowing public data to be used by a private entrepreneur for the benefit of all London citizens – at zero cost to the council – those boroughs would prefer to spend citizens’ taxes on building an app that serves only those drivers in their own area. And bear in mind this is London – where most people live in one borough and work in another, so the use potential of a council-specific app is limited.
It’s an example only of a radical lack of thought.
A sense of place
But it also demonstrates one reason most council chiefs will give to justify the 433 administrative bodies – the importance of place, and local democracy. Rightly, councils see themselves as bearing responsibility for the maintenance of local culture, history and that sense of place; they stay close to citize ns to ensure everyone has a voice in how their district is run. How can you continue that role without local organisations working close to local people, they say?
The easy answer for a digital thinker is – “digitally”. But perhaps here, realistically, we’re touching on a much wider issue about the organisation of politics nationally. Surely the devolution debate needs to be informed by digital thinkers too – if those 30 new administrative bodies had greater powers devolved to them, then there’s a radical compromise. New local government bodies may be bigger and not so physically close to citizens, but with extra powers they become more accountable to them. And by the way – digital can help here too, as a means of bringing disparate citizens’ opinions to council leaders.
You could also add that representatives of those slimmed-down, digitally-enabled, devolved authorities might make for a more democratic upper chamber in Parliament than the current House of Lords, but perhaps that’s thinking too far for a mere technology publication.
Local government is the most protected sector there is. Without a political mandate and a huge majority, Westminster is never going to tell councils to undergo such a radical reshaping of local services. The structure of local government has not featured once as a general election issue. So those authorities take the swingeing budget cuts imposed upon them, slice off a few more resources, squeeze down on service levels, and do everything they can to sustain the structure of local government essentially as it has existed for decades.
Radical change is needed
The only way radical change is going to take place is from the bottom up; from councils themselves realising the need and the opportunity to use digital to dramatically cut costs and improve service levels in a completely new-look administrative structure.
Another Socitm speaker, Peter Wells – who project managed the Labour Party review of digital government last year – gave a warmly received talk about the many good things about local government. “We need to celebrate the public sector as a great place to work – a place to do fantastic things and improve lives,” he said. And he’s right, and that needs to be protected. But without radical change, all those fantastic things are at risk.
I got the sense last week that there’s a core of digital leaders in councils who absolutely get this. But will that be enough? Is local government capable of radical change? Eventually it must – or else it starts to lose its relevance and ability to deliver, with every attempt to reduce the cost of maintaining the status quo.
Amazon Web Services (AWS) is clearly doing something right. The e-commerce giant has split out AWS revenues for the first time in its latest financial results, revealing a $5bn business growing at nearly 50% year on year.
AWS has shown the big, traditional IT players the way to do public cloud – defining the market for infrastructure (IaaS) and platform as a service (PaaS) along the way, forcing the likes of IBM, HP, Oracle and Microsoft to respond. Amazon is by far and away the dominant public cloud player, and when you see it is also the company’s most profitable division, the scope for further growth, innovation and lower prices shows it is still in the early stages of its development as a business.
Perhaps unsurprisingly, there’s a certain resentment towards AWS in parts of the IT industry. It has not played the game by the same rules as its increasingly distant competitors. It has constantly cut prices – the more customers AWS has, the bigger the economies of scale, and the lower the unit cost for every customer. Every new AWS user is, eventually, helping to cut costs for every other user. You’re not meant to do that as a traditional IT supplier – imagine if the cost of software licences fell when more customers bought that software; it just doesn’t happen.
AWS has done very little marketing, relying on word of mouth among IT leaders. It’s common at Computer Weekly events for our CIO guests to be heard advising their peers, “Why don’t you just put it on Amazon?” AWS users seem not only to be happy, but to be happy to tell others about it too.
AWS applies a retail mindset to the provision of technology services – the “pile it high, sell it cheap” approach behind its e-commerce success. It exploits the commoditisation of IT to develop new products and services that build its ecosystem using the same commoditised pricing. And it encourages others to use that ecosystem to build their own open services that can be fed back into the ecosystem. It’s a bit like Microsoft asking third-party Windows developers to include all their applications in Windows, for free.
Amazon has achieved $5bn of cloud revenue at a time when there are still widespread fears about cloud – related particularly to security and data protection – that prevent many large organisations, especially in heavily regulated sectors like financial services, from moving to public cloud. But those fears will be overcome; the sceptics will be convinced; the laggards will be forced to catch up. A tipping point is approaching.
AWS has proved, so far, to be an impressive technology business, and its potential to further shake up corporate IT is huge. But we do need more competition – a challenge the rest of the industry must better respond to. As long as Amazon Web Services continues to do things in ways the traditional IT players find anathema, it is going to keep eating into rivals’ profits and embedding itself into IT leaders’ strategic plans.