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Digitization of Government Services Could Achieve Up to £45bn in Savings and Productivity Benefits
Sir Keir Starmer recently declared that the digitization of government services could achieve up to £45bn in savings and productivity benefits annually across the public sector. The UK prime minister arrived at this total following a review this year that was commissioned by technology secretary Peter Kyle and conducted by officials in his department alongside consultancy firm Bain & Company.
Where will the savings come from?
The report, published in January, estimated that greater use of digital technology and artificial intelligence could save 4-7% of public sector expenditure in total, making it “the most powerful lever available” to drive reform across the state. Crucially, however, it did not offer a detailed breakdown.
Where do the other savings come from?
Officials in the Department for Science, Innovation and Technology told the Financial Times that £36bn — or 80% — of the estimated efficiencies would derive from simplifying and automating delivery across the public sector. This would involve the widespread use of AI to perform administrative tasks, such as transcribing meetings, sorting and analyzing state consultation responses, summarizing policies, and conducting legal and parliamentary research.
How credible is the government’s calculation?
Some experts are skeptical. Nick Davies, programme director at the Institute for Government think-tank, said he understood how digital technology could boost productivity, but warned that Starmer’s suggestion of significant “cashable” savings may be misleading. While “transactional” services such as the issuance of passports and driving licenses, and other back-office functions, can be automated, it is difficult to replicate in person-centred services such as healthcare that require frontline staff, he said.
Conclusion
The government’s calculation of £45bn in savings and productivity benefits from digitization of government services is ambitious, but some experts are skeptical about its credibility. While technology can certainly boost productivity, it is crucial to consider the limitations of automation in person-centred services. The government will need to provide a more detailed breakdown of its plans to achieve these savings and ensure that they are not just promises but actual cost savings.
Frequently Asked Questions
Q: How much could the digitization of government services achieve in savings and productivity benefits?
A: Up to £45bn annually across the public sector.
Q: What are the main areas where savings will be achieved?
A: Simplifying and automating delivery across the public sector, migrating service processing to cheaper online channels, and reducing fraud and error with digital compliance solutions.
Q: How credible is the government’s calculation?
A: Some experts are skeptical, citing limitations of automation in person-centred services and the need for more detailed breakdown of plans.
Q: What is the government’s plan to achieve these savings?
A: The government has launched a review, commissioned by technology secretary Peter Kyle, to explore the potential benefits of digitization and automation in the public sector.
