Digital transformation in government: addressing barriers to efficiency
Closed
What the inquiry looked at
“One of government’s main challenges is achieving efficiency savings. The civil service employs over half a million people in the UK and runs diverse operations and services that range from collecting taxes and processing benefits claims to, for example, granting rod fishing licences. In 2020-21, central government departments expected to spend £456 billion on these day-to-day running costs of public services, grants and administration. The Government has established a new Central Digital and Data Office (CDDO) which the NAO has found in its report is laying good foundations , but many of the critical and more challenging milestones lie in the future. CDDO’s small budget and headcount are already affecting the intended reforms to government central functions’ treatment of digital programmes. In addition, departments are finding that, in current market conditions, they cannot acquire sufficient digital skills and expertise in their teams. Dame Meg Hillier MP, Chair of the Committee of Public Accounts, commenting on the NAO report, said “It's very encouraging to see the Central Digital and Data Office has taken on my committee’s feedback on digital transformation in government and how fundamental barriers must not be ignored. Today’s NAO report shows it has begun to address the underlying issues which have frustrated previous attempts to transform and has helped departments secure funding for investment in digital change over the next three years. While it has laid the foundations, it is now up to departments' business leaders to step up and understand what is needed to lead digital change so government can achieve real efficiencies.” The Committee will question officials including from the CDDO on how government plans to address the issues underlying why past attempts at digital transformation have experienced problems. The Committee will look at: the current landscape, drivers for change and government’s new approach how government is undertaking its new approach how the Roadmap is addressing key challenges to digital transformation. If you have relevant evidence to inform the Committee’s questioning of senior officials at the Cabinet Office on these issues, please submit it here by 23:59 on Tuesday 9 May. Please have a look at the requirements for written evidence submissions and note the Committee cannot accept as evidence material that has been published elsewhere.”
The committee's words, from the inquiry page on parliament.uk ↗.
What it found
Despite introducing 11 digital strategies in the last 25 years, successive governments have consistently failed to achieve successful digital transformation. The potential merits of effective transformation are vast, yet today, the government has half the proportion of digital, data and technology professionals in the workforce compared to other organisations. Government departments spend £400 billion annually on running public services, grants and administrations. Effective digital transformation within government could not only reduce the size of the bill paid by the taxpayer for those running costs, but could also improve services for users across the country.
The government set up the Central Digital and Data Office (CDDO) to help drive improved digital transformation, and since its establishment, it has made good progress on supporting departments with addressing barriers to success. The CDDO responded positively to this Committee’s report in late 2021, and a few months later it created the ‘Roadmap’. The Roadmap sets out what needs to be done by departments and at the centre of government to address root causes of digital problems, establish key data about services and make progress towards government’s long-term ambition for a “transformed, more efficient digital government”.
Departments have made firm commitments to undertake Roadmap activities, which lay the foundations for transformation and attempt to avoid the mistakes of the past.
The CDDO has successfully obtained £4 billion of increased funding for digital transformation in departments and implemented mechanisms to monitor departmental progress and identify risks to delivery. It is also making progress on addressing the deep-seated problems in digital skills, recruitment and retention, pay, legacy systems and data.
Despite these good intentions and encouraging early steps, there are many challenges to overcome if the government is to achieve the savings and improvements to public services that digital transformation offers. Developing digital capability and digital change professionalism across Whitehall, including those in government’s central functions such as finance and procurement, is key to moving government modernisation forward, and achieving the Roadmap’s aims. This outcome will require capability-building activities to be set up and maintained, including the recruitment of senior digital business leaders; increasing the number of non-executive directors with the right kind of digital expertise; appointing chief digital and information officers to the most senior decision-making body in their organisations; and digital business training and objective setting.
What the government said
The government responded on 18 November 2023. The deadline was 13 November 2023.
The government states that it "agrees with the Committee's recommendation" on each of the recommendations in this response, with target implementation dates between June 2025 and February 2024.
- On single service owners, the government agrees; CDDO is piloting a new standard and "will then roll this new standard out for departmental adoption in the financial year 2024-25".
- On non-executive directors with digital expertise, the government agrees (target December 2025). CDDO is working with the Permanent Secretary level board "to understand how this commitment could be adopted across government".
- On digital skills, the government agrees and has set a target that "at least 6%" of the Civil Service workforce will be in the Digital, Data and Technology profession by June 2025.
- On reporting, the government agrees (target February 2024). CDDO "will ensure that Parliament also receives this update, with departmental progress included", every six months.
Read the government's response ↗ Read the report ↗ Report an error
How the inquiry ran
Each dot is a dated item listed on this page, from the inquiry's opening on 29 March 2023 to its close on 18 November 2023. The dashed mark is the deadline Parliament records for the government's response.
- Oral evidence 22 May 2023
- Report 13 Sep 2023
- Government response 18 Nov 2023
- Correspondence 2 letters
What it recommended 14 recommendations · 11 conclusions
2Require departments to detail legacy system resolution and service redesign cost reductions in business cases.
3Incorporate digital responsibilities in senior appointment letters and appoint digital-expert non-executive directors.
4Support departments to avoid digital headcount cuts and quantify under-resourcing impact on operations.
5Require central functions to outline strategies for digital reforms to their processes to CDDO.
6Report to Parliament every six months on departmental digital Roadmap progress.
1Committee took evidence on government-wide digital transformation progress and associated barriers.
7Publish regular updates to ensure departments deliver committed digital transformation tasks.
8Senior government decision-makers lack sufficient digital experience hindering effective communication.
9Permanent secretaries' appointment letters omit responsibilities for improving government digital services.
10Deliver ongoing digital capability training for senior leaders, covering legacy systems and data.
11Digital advisers with legacy experience most valuable for educating senior leaders on digital matters.
12Government faces major digital skills shortage, requiring double the number of professionals.
13Government over-relies on staff goodwill due to consistently lower digital pay levels.
14Continuously invest in staff digital development, avoiding counter-productive headcount reductions for capability.
15Lack of single service ownership hinders understanding of end-to-end costs and operations.
16Absence of single service owners impedes understanding of government-wide service costs and quality.
17Many government services lack a single senior owner for end-to-end accountability and visibility.
18Legacy systems remain a significant source of inefficiency and constraint on government service modernisation.
19Government's digital transformation maturity remains low, missing significant benefits from fundamental re-engineering.
20Government has made minimal progress on cross-departmental data challenges in the last decade.
21Senior leaders' under-investment in transformation stems from poor understanding of long-term cost benefits.
22Continue engagement with CDDO to address process challenges and shape future digital government.
23Departments struggle securing sufficient resource funding for ongoing digital system maintenance and updates.
24Inflexible procurement processes fail to account for digital programmes' complexities and hinder effective delivery.
25Civil service suffers from insufficient digital expertise and poor policy-digital integration.
Evidence
Oral evidence sessions 1
- 22 May 2023Digital transformation in government: barriers to lasting efficiency3 witnesses, listed belowparliament.uk ↗
Who gave evidence 3 witnesses
- Alex ChisholmChief Operating Officer Civil Service and Permanent Secretary, Cabinet Office
- Megan Lee DevlinChief Executive, Central Digital and Data Office, Cabinet Office
- Paul WillmottChair of the Central Digital and Data Office, Cabinet Office
Correspondence 2 letters
- 11 Sep 2023Correspondence from Paul Lincoln CB OBE VR, Second Permanent Secretary, Ministry of Defence, re Delivery the digital strategy update, dated 31 August 2023
- 19 Jun 2023Correspondence from Alex Chisholm, Civil Service Chief Operating Officer and Cabinet Office Permanent Secretary, re Digital Transformation in government: addressing barriers to efficiency, dated 7 June 2023