IT Trends 2008/09 predicted that by 2010 public services would be stretched to breaking point as demand continued to increase and capacity declined. John Serle, IT Trends Editor discusses the latest report
We argued for an IT led investment program designed to radically change the way public services are delivered. The most promising strategies (based on experience) we suggested for delivering “less government” were:-
• process re-engineering
• increasing ‘self service’ through the online channel
• home and flexible working
• rationalising service outlets, buildings and technical infrastructure
Our 2009/10 survey identifies that spending on IT over the past 12 months has actually declined by 11% on average. Investment in new projects is the area hardest hit, but the total number of IT staff employed by the sector has also reduced by 10% over the last year.
Our findings come from data that is extremely robust, being based on a comprehensive questionnaire sent the heads of ICT of every local authority and other local public service provider in England, Wales, Scotland and Northern Ireland. The responses provide a great deal of factual information relating to the scale and nature of the ICT resources used by authorities, including expenditure, staffing levels and technologies. This year’s data comes from 390 organisations, a statistically excellent sample for making predictions about the overall position of the local public sector and analyzing challenges facing local authorities in this area.
The level of reduction in ICT resourcing that the survey has revealed is without precedent in the 23 years we have been monitoring trends, with communications being the only area where growth is predicted. As a result, financial and technical capacity is now below the figure reported in 2005, and IT heads are reporting that service levels are beginning to fall as their departments struggle to deliver more services with less resource. All this suggests that local public sector institutions are not convinced that investment in IT is the way to transform service, reduce cost and re-establish equilibrium.
The finding fuels our doubt that the government’s Operational Efficiency Programme (OEP) will deliver the scale of savings it envisages. While we accept that local public service providers need to simplify and standardise activity, we believe a savings target of around 20 per cent in three years, from adopting this approach, is unrealistic. Our survey indicates that savings achieved by efficiency programmes are already in decline. We cannot identify how further large scale savings can be achieved without cutting into front line services.
Increased use of shared services, shared procurement and shared capacity can help to reduce cost. Our survey suggests that for local public service providers, service sharing is still in its infancy. Political rather than practical constraints appear to the main barrier to progress. Funding for joint, multi agency initiatives has evaporated since our last survey.
We remain convinced that cloud computing, the use of software as a service (saas) and utility computing, could offer significant savings to public sector organisations.
However we need to recognise that use of the cloud will introduce new risks, some of the key ones are:-
• uncertainty of service standards
• ownership and security of information
• ability to control and manage demand
In our view these risks can be managed. At time of writing the report, our research suggested that the government was not in favour the exploitation of the public cloud, proposing instead to create a “government cloud” (the so called G-cloud). Our view was that, while this approach of urging public sector organisations to ensure all future IT purchases were compatible with the G-cloud might overcome some of the risks identified, it has other drawbacks, principally our scepticism about G-cloud becoming a main stream service offering delivering savings within the three years stated in the digital Britain report.
Government CIO John Suffolk, who attended the launch of IT Trends, gave a strong defence of the government’s approach to the cloud – much reported elsewhere - and said that use of the public cloud had by no means been ruled out where non-sensitive data is concerned. Meanwhile Socitm has re-stated its commitment to helping specify the shape and contents of G-cloud from a local public services perspective, and is working with the Cabinet office to identify and deal with challenges around security, information assurance and systems integration.
While analysis of future developments like G-cloud are very much part of IT Trends, the focus of this year’s report is the impact the cuts in spending we identify are starting to have right now. The major concern, alluded to earlier, is that continued budget cuts on the scale being seen will compromise the ability of local authority ICT functions to deliver savings elsewhere in the organisation. It is highly unfortunate that these cuts to ICT budgets are impacting at exactly the time management is looking to the ICT function to take cost out of other parts of the organisation through ICT facilitated transformational initiatives.
Such initiatives include introduction of flexible working and rationalisation of accommodation, together with business process improvement and document management. Driving self-service through web-delivered services and reinvesting in customer relationship management are also important areas.
However, funding for these investments from external sources appears to be drying up, shared service initiatives have stalled and there is little appetite to borrow money to fund ICT. As a result, overall capacity within the ICT function to deliver improvement has decreased in the year since our last survey. Despite efforts to streamline their own operations through technologies such as virtualisation, information governance measures and improved service management, ICT managers say that being asked to do more with less is now the major challenge they face. Funding rather than staff shortage appears to be the limiting factor.
This situation is in sharp contrast to last year’s survey findings, when, for 2008/09, ICT spending by local authorities was forecast to increase by 5%, and authorities were planning to spend over £3.2bn on ICT in 2008/9 — overtaking the record levels achieved in 2005.
Given demand for ICT services and its resourcing moving in opposite directions, IT Trends 2009/10 says there is a need for a radical rethink about how technology can be exploited for the public’s benefit. The worldwide infrastructure, communications and technology services available today offer a fantastic opportunity to public service providers, but in the current financial climate there is a major challenge around how to exploit the potential at the pace demanded.
With equipment purchases forecast to be considerably less, the length of time that assets will be used by organisations will inevitably increase, and public authorities will become increasingly dependent on old technology. Consequently, the workforce will be using older, lower specification equipment in the office than they would be using at home. Organisations will either need to find more cash to support the ageing ICT infrastructure or find new lower-cost ways of delivering ICT service.
This situation must provoke a challenge to the current approach to the provision of IT services, and local public service organizations should be looking to square the circle by asking themselves a set of questions we first posed last year:
• does it make sense to own as much of the infrastructure as we currently do?
• can we integrate our workforce’s technology into service delivery?
• to what extent can we use software as a service to meet our business requirements?
• how well does our current model deal with change?
• how fast can we deploy new solutions?
• how much information that we hold needs to be secure and private?
The change that is now required will only come about, however, through bold decisions and significant investment, with leadership from the top of the organisation. But the reality on the ground, reflected in our survey, is that our respondents are suffering from the perennial pressures of funding cuts alongside increased demand and are under greater pressure than ever. There is nothing new here, except for the scale of the forthcoming public spending squeeze that confronts us.