Seventieth Report - Digital transformation in government: addressing the barriers to efficiency

We are unconvinced that departments will be able to maintain commitment to the agreed Roadmap activities in the face of competing pressures and priorities. Departments must buy in to the long-term advantages of following the digital change agenda. CDDO can … Read more We are unconvinced that departments will be able to maintain commitment to the agreed Roadmap activities in the face of competing pressures and priorities. Departments must buy in to the long-term advantages of following the digital change agenda. CDDO can monitor progress from the centre, but departments must continue to play their part in completing the agreed activities in the Roadmap. Lack of sustained leadership engagement is a risk to delivery that needs to be taken seriously and CDDO must continue to push for priority with senior leaders. We agree that overall pressures on spending in the current climate require better delivery for improved efficiency at lower cost. Competing pressures and changing priorities will present challenges to the delivery of the Roadmap despite CDDO’s best endeavours. 8 Digital transformation in government: addressing the barriers to efficiency Effective and timely reporting is necessary to hold departments accountable for completion of the agreed Roadmap activities, and CDDO must ensure it maintains suitable levers to keep progress from stalling. Recommendation 6: CDDO should report to Parliament in six months’ time, and 6-monthly thereafter, on each department’s progress towards achieving the Roadmap commitments they have agreed to. We note that the first 6 monthly report has been published. Digital transformation in government: addressing the barriers to efficiency 9 1 Leadership, skills and capacity Show less

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Pressures on spending in the current climate require better delivery for improved efficiency at lower cost.9 However, competing pressures and changing priorities will present challenges to the delivery of the Roadmap, despite CDDO’s best endeavours. CDDO is using quarterly assessments, … Read more Pressures on spending in the current climate require better delivery for improved efficiency at lower cost.9 However, competing pressures and changing priorities will present challenges to the delivery of the Roadmap, despite CDDO’s best endeavours. CDDO is using quarterly assessments, supported by its digital dashboard, to monitor progress against commitments and identify where departments may be going off track and the steps needed to correct this.10 CDDO must maintain suitable levers to keep progress from stalling.11 As a committee, we believe in transparency as a means of holding people to account and in our view CDDO should publish updates to keep departments to the tasks they have committed to.12 Senior leadership understanding of digital Show less

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Ongoing capability building and training for senior leaders is essential. It is being progressed through various training programmes but requires continual attention.18 We heard that a Digital Excellence programme has been piloted recently, although not yet widely rolled out. So … Read more Ongoing capability building and training for senior leaders is essential. It is being progressed through various training programmes but requires continual attention.18 We heard that a Digital Excellence programme has been piloted recently, although not yet widely rolled out. So far 300 people have been trained but this represents less than 5% of the senior civil service so far, against the target of 15% by September 2023.19 CDDO itself recognises it will take sustained effort and focus from senior leaders across government to meet the target of 90% set out in the Roadmap, so in our view this is unlikely.20 We would also expect this training to include detailed coverage of government’s digital operating environment and the existing constraints and issues associated with legacy systems and data.21 9 Q 73 10 Qq 55, 69 11 Q 55 12 Q 70 13 C&AG’s Report, para 26 14 Qq 45–49 15 Q 49 16 Qq 42–43 17 Q 30 18 Q 7 19 Q 44; C&AG’s Report, para 26 20 Qq 30, 36 21 C&AG’s Report, para 3.23 Digital transformation in government: addressing the barriers to efficiency 11 Show less

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The use of advisers and non-executive directors with digital experience in board roles in departments is an excellent way of educating senior leaders in digital matters. Around half of current postholders consider they have digital expertise. However, those with a … Read more The use of advisers and non-executive directors with digital experience in board roles in departments is an excellent way of educating senior leaders in digital matters. Around half of current postholders consider they have digital expertise. However, those with a background in similar legacy environments to government will be of most value as they will be best placed to understand how digital developments interact with government’s complex operational environment.22 Digital skills shortages Show less

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Headcount reductions can be counter-productive at a time when government knows it needs to double its digital, data and technology capability and is struggling to recruit the staff it needs. We were therefore disappointed to hear that apprenticeships had been … Read more Headcount reductions can be counter-productive at a time when government knows it needs to double its digital, data and technology capability and is struggling to recruit the staff it needs. We were therefore disappointed to hear that apprenticeships had been a victim of departmental decisions on headcount culls.31 Government should continuously invest in staff development for clear long-term benefit. 22 Qq 57–59 23 C&AG’s Report, para 27 24 Qq 11, 30 25 Qq 13–14 26 Q 31 27 Q 16 28 Q 14 29 Q 31 30 Q 32 31 Qq 1, 23, 26–28 12 Digital transformation in government: addressing the barriers to efficiency 2 Addressing inefficiencies and transforming legacy services Single service owners and timely metrics Show less

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A single director-level owner for each service, with accountability for its end-to-end operation and decision-making authority for continually improving the service, would enable departments to form a complete and joined-up view of their services and associated costs.32 Understanding the full … Read more A single director-level owner for each service, with accountability for its end-to-end operation and decision-making authority for continually improving the service, would enable departments to form a complete and joined-up view of their services and associated costs.32 Understanding the full cost base of an existing service is key to delivering efficiency. CDDO told us that in the private sector, information such as unit costs, time to serve and error rates is ‘foundational’. Without good information on a service’s starting point, it is very difficult to make a business case for improvement, and provide a baseline for tracking those improvements.33 Government has some visibility of the digital, data and technology element of a service’s costs. However, it is challenging to get a full picture from the point where a user begins to interact with a service through to the final decision. This is a core aim of CDDO’s ‘top 75’ programme.34 Show less

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CDDO found that, for half the services it has evaluated, there is no single senior individual who has ownership of the full service, encompassing both the online citizen- facing portals and the back-office systems that perform the other processing. Instead, … Read more CDDO found that, for half the services it has evaluated, there is no single senior individual who has ownership of the full service, encompassing both the online citizen- facing portals and the back-office systems that perform the other processing. Instead, many different programme directors, operational leaders and digital leaders are involved.38 CDDO agrees the need for an end-to-end service owner to address the need for full visibility and end-to-end accountability for a service.39 Piecemeal changes to legacy systems Show less

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Government has a low level of maturity in the transformation of digital services and the benefits to be gained from a more fundamental approach are estimated to be three or four times the current level.44 Past approaches have focussed on … Read more Government has a low level of maturity in the transformation of digital services and the benefits to be gained from a more fundamental approach are estimated to be three or four times the current level.44 Past approaches have focussed on improving websites and front-end screens , making services “look good but not be good”, whilst not addressing the limitations posed by the existing legacy systems and data.45 The tendency to tweak rather than re-engineer is a lost opportunity to transform services and gain efficiency benefits.46 Piecemeal legacy system development introduces unwanted additional complexity and can increase costs.47 Show less

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Redesigning services requires a more fundamental look at processes, not just the digital and technology elements.50 CDDO recognises this needs people not just with skills in technology, but also those who understand end-to-end processes, have the ability and willingness to … Read more Redesigning services requires a more fundamental look at processes, not just the digital and technology elements.50 CDDO recognises this needs people not just with skills in technology, but also those who understand end-to-end processes, have the ability and willingness to analyse organisational structures, and the right capability and credibility to make the level of change required.51 Some departments can describe the benefits gained from transformation but struggle to systematically identify the opportunity costs of failing to transform.52 Incremental change is government’s fall-back response to things which are deemed ‘too difficult’ and when transformation gets de-scoped.53 If senior leaders do not understand how transformation would reduce future operating costs, they will continue to under-invest.54 41 Qq 53, 63; C&AG’s Report, para 3.20 42 Q 1 43 Q 63 44 Q 15 45 Q 65 46 Q 41 47 Q 62 48 Qq 76–77 49 Q 38 50 Q 65 51 Q 66 52 Qq 62, 72 53 C&AG’s Report para 1.6; Qq 15, 17–18 54 Q 62 14 Digital transformation in government: addressing the barriers to efficiency 3 Reform of finance, procurement and policy processes Central functions’ understanding of digital Show less

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Digital change requires specific ways of investing, funding and procuring digital services and requires upskilling and capability-building to introduce and adapt new approaches. Processes which work for other programmes are not always well-suited for digital programmes. But government central functions … Read more Digital change requires specific ways of investing, funding and procuring digital services and requires upskilling and capability-building to introduce and adapt new approaches. Processes which work for other programmes are not always well-suited for digital programmes. But government central functions have not made significant progress in understanding what makes digital programmes different from infrastructure or construction programmes or reflecting this in policies and procedures which departments are required to follow.55 We heard that the Infrastructure and Projects Authority now includes a digital expert on review teams and reviews digital projects differently from other types of project.56 Nevertheless, the civil service is still quite generalist.57 All central functions should continue to engage with CDDO to address process challenges and shape the future of digital government.58 Show less

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Procurement processes are considered inflexible and do not take account of the complexities and uncertainties of digital programmes, as set out in the C&AG’s report on The challenges in implementing digital change.62 Departments often cannot precisely define and scope their … Read more Procurement processes are considered inflexible and do not take account of the complexities and uncertainties of digital programmes, as set out in the C&AG’s report on The challenges in implementing digital change.62 Departments often cannot precisely define and scope their requirements yet continue with procurements and expect suppliers to make priced proposals as if these uncertainties were not a problem. Once awarded, contract lots are not always allocated to best fit the delivery plan and focusing on cost minimisation rather than best outcome can lead to defensive behaviours from all parties rather than constructive partnership.63 Show less

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The civil service is still quite generalist and led by people with a primarily policy background rather than by those with direct experience of digital business operations.64 Policy professionals do not have sufficient understanding to develop policies which work well … Read more The civil service is still quite generalist and led by people with a primarily policy background rather than by those with direct experience of digital business operations.64 Policy professionals do not have sufficient understanding to develop policies which work well in a digital organisational environment.65 There is low integration between policy 55 C&AG’s Report, paras 3.28–3.29 56 Q 66 57 Q 67 58 Q 68 59 C&AG’s Report, para 25; Q 62 60 Q 54 61 Q 69 62 C&AG’s Report, The challenges in implementing digital change, Session 2021–22, HC 575, paras 2.11–2.14 63 Written submission, DXC Technology DGE0004 64 Q 67; C&AG’s Report, para 31 65 Q 65 ; C&AG’s Report, para 26 Digital transformation in government: addressing the barriers to efficiency 15 teams and those teams involved in change, operations and services leading to policies and legislation that are difficult to implement digitally. Lack of a single service owner worsens this situation because there is no single point of focus for policy teams to interact with. Appointing single service owners will help to improve cross-functional working66 but digital capability building for policy people is needed. 66 Q 37 16 Digital transformation in government: addressing the barriers to efficiency Show less

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Departments are mainly making piecemeal changes to legacy systems rather than investing in more efficient wider service redesign which would reap greater benefits. It is difficult to transform services where they are supported by poorly performing legacy systems and data. When government does not have the right resources and capabilities …

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Digital skills shortages, including those self-inflicted through headcount cuts, risk costing government much more in the long run because opportunities to transform are foregone, and delays increase the risks of prolonging legacy systems. Government estimates it has under half the number of digital, data and technology professionals it needs, when …

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Central functions, such as procurement, have not made significant progress in treating digital programmes differently from physical infrastructure programmes. The Infrastructure and Projects Authority is responsible for assuring major programmes across government and has started to appoint people with digital expertise onto review teams. However, CDDO is working with the …

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On the basis of a report by the Comptroller and Auditor General, we took evidence from the Cabinet Office about how digital transformation is progressing across government and what is being done to address the barriers and challenges.1

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There is a major digital skills shortage in the UK and skilled digital professionals command a premium in the market, making it hard for departments to recruit.23 Government estimates that the number of digital, data and technology professionals in the civil service is around 4.5%, less than half the number …

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We heard that the lack of a single service owner makes it very difficult to answer questions about the costs of providing a service more widely across government.35 There can be many handovers between different teams delivering a service – policy, operations, digital and transformation. Furthermore, not all services are …

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Across government, legacy systems are a key source of inefficiency and a major constraint to improving and modernising government services. Legacy systems are difficult and expensive to run and maintain and there are substantial hidden costs from additional business processes to overcome their limitations.40 CDDO has assessed the scale of …

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