UK Spending Review - Round-up of reactions to Osborne’s surprise digital boost

Derek du Preez Profile picture for user ddpreez November 25, 2015
Industry and stakeholders are starting to give their reaction to the news that George Osborne would be putting a significant chunk of money into digital transformation.

Yesterday saw Chancellor of the Exchequer George Osborne announce the results of his latest Spending Review, which much to many people’s surprise, saw a huge boost for digital investment. As I highlighted yesterday, in the 2010 Spending Review document the word ‘digital’ was only mentioned four times. Yesterday’s document sees the word feature 58 times.

And it wasn’t just sentiment. The Chancellor appeared to follow through with the cash and announced that he would be investing £1.8 billion in digital transformation over the next five years, with £450 million going to the Government Digital Service.

I wrote my initial reactions to the news yesterday, saying that it seemed like those at the top of government are finally giving digital the much needed support and financial backing it deserves. Obviously the devil will be in the detail and much now relies on good execution, but initial reactions are good.

However, I thought it would be good to pull together some other initial reactions that have been put out there or fed through to me too, to get a better picture.

The Twitterati

Twitter was obviously the go-to place for initial reactions. Here are some of the top ones I noticed:


We also got some comment through from some groups that whilst they have an interest in government spending, are meant to be somewhat impartial. Here are some of the top ones so far.

Carolyn Fairbairn, CBI Director-General, said:

Businesses will be pleased to see the Chancellor staying the course on deficit reduction, his commitment to an industrial strategy, and the emphasis on nurturing a vibrant business community.

Standouts include maintaining spending on infrastructure; ramping up housebuilding; support for energy-intensive sectors and for advanced manufacturing.

Business recognises there are tough choices to be made in balancing the books, but many are reaching a tipping point, where the cumulative burden of the living wage, apprenticeship levy and business rates risk hurting competitiveness.

Firms will be reassured by the protection of the science budget, but the shift from grants to loans for Innovate UK could dampen bold and game changing innovation, particularly amongst smaller businesses.

Public services underpin productivity and prosperity. With the population ageing and expecting more from public services, extra investment must be matched by transformational reform, such as making more use of digital transactions, to have a sustainable impact.

Julian David, CEO of techUK, said:

techUK welcomes the Chancellor’s commitment to make the UK the most digitally advanced tax administration in the world. As we have seen from online self-assessment – technology can be a huge help for citizens and companies that have to navigate the UK’s complex taxation system.

The news of investing £1.8 billion in digital transformation, including an increased budget of £450m for the Government Digital Service is welcome evidence of the government’s commitment to digital transformation. Government and industry must work closely together to bring innovation to government.

The Chancellor’s decision to protect science spend in real terms at £4.7bn will be welcomed by the UK tech sector which depends upon the research, skills and talent that flows from our world leading universities. However, switching grants to loans for innovation could inhibit progress of the UK’s start up community.

Full funding for the Five Year Forward View for the NHS and potential increased spending on social care in real terms are welcome, but it is critical that these services are able to make much more effective use of data to deliver patient-centric care at affordable cost across health and social care. NHS England will only achieve the scale of efficiency savings required through the effective use of tech.

On the Apprenticeship Levy, techUK urges the Government to listen closely to the needs to tech employers and ensure that the levy does not undermine existing initiatives by companies to nurture future talent.

Joel Bellman, lead partner for digital government & public sector at Deloitte, the business advisory firm, said:

In his Autumn Statement today, the Chancellor announced an investment of £1.8 billion in digital technology and transformation projects across the public sector over the next four years.

Digital transformation is now so fundamental to the Government’s thinking that is prevalent in every corner of the Spending Review.

The word ‘digital’ appeared just four times in the Spending Review 2010 document, but it has 58 appearances in today’s report. Digital has moved from being an experimental public policy concept to being one that is core to the new policies announced today. These include digital tax accounts, end-to-end justice reform, criminal investigation and even patient records.

The additional £450 million for the Government Digital Service, whilst many Whitehall civil service teams are shrinking, shows the value that the Chancellor puts on digital as a driver for change.

Peter Riddell, Director, Institute for Government said:

The Chancellor today announced a much smaller squeeze on departmental spending plans than he indicated in his July Budget. But despite the reduced scale of cuts in the immediate future, there are still big challenges in implementation if the plans are to be achieved.

There is a lot of stress on digitalising government with the ambition that by 2020 people will have the option to pay online for every central government service. Funding has been increased to support these ambitious plans. Transformation will, however, require Whitehall to work in new ways as well as managing with many fewer civil servants.

The other striking feature of the statement is the big changes to local government financing. The increased powers for councils are being accompanied by increased financial responsibilities which are likely to result in higher council taxes.

Those a little less impartial

There was also plenty of vendor comment coming into my inbox, which whilst not exactly the most impartial, does occasionally provide some insight into the dynamics between suppliers and government buyers. Here are some of the more interesting ones.

Steven Cox, VP, Head of Public Sector at Fujitsu UK and Ireland said:

With today’s announcement, the simple fact is that the Government has re-assessed its spending and Departments must now look at models that can help them become more economically efficient without negatively impacting services and the lives of UK citizens – perhaps in the way that David Cameron envisaged back in September when he pledged to run public services like businesses in order to boost productivity and efficiency.

There is much duplication across Departments with similar teams doing identical jobs – the

George Osborne
George Osborne

likes of HR, finance, and so on that could be grouped together to deliver a better, more efficient and cost effective back-office service. Similarly there are significant opportunities to digitalise the way public services are delivered to citizens. Digitalising services will also reduce the demands placed on civil servants, as well as the demands placed on the infrastructure, and therefore the cost, of the country

James Norman, UK Public Sector CIO, EMC, said:

Data is Power. This is what Matt Hancock said in a speech last month at the Institute for Government as he promised to tackle sharing and linking data in Government, in an attempt to improve public services. What we hope to see from the Spending Review is a clear indication that the Government recognises the need to embrace technology if they are to keep up with developments being made in the private sector.

We hope to see an emphasis on the creation of a digital foundation made of data and not paper. Hancock highlights the need for open data and transparency, as well as a smarter approach to drive efficiencies within government. Government as a Platform (GaaP) has been spoken about briefly in the past and we know that it has been reiterated that a commitment to GaaP strategy will be continued. No one group has all the answers. Knowledge sharing and an understanding of the need to collaborate and communicate effectively with all sectors will be important moving forward. We want to see more digital transformation within government, but this will only be possible if the financial and community support is there.

Steve Thorn, CGI’s SVP Public Sector, said:

The announcement of a further investment of £1.8 Billion in digital technology and transformation made by the Chancellor today is to be thoroughly welcomed. However, the process must go deeper than simple front-end digitisation. It is critically important that the underlying business processes of government are transformed, and data is shared, to ensure this investment delivers the best possible results.

Our new research with 4,000 UK civil servants, released today, shows that cyber security (49%), poor quality data (33%) and lack of interoperability (38%) are still barriers preventing civil servants from sharing data and collaborating more fully. We at CGI welcome the chance to work closely with the public sector to help deliver greater collaboration and digitisation.

Mick Wayman, Head of Public Sector, Vodafone UK, said:

Yesterday’s Autumn Statement and Spending Review re-confirms that the challenges the public sector faces will continue, with local government seeing a budget reduction and no increase in funding for police. Although no immediate cuts have been announced for the NHS or policing, all public sector organisations will still have to seek genuine transformation in order to continue to provide core public services. The public sector needs to do this in the face of increasing demand and in a challenging financial environment.

Technology has a role to play in this transformation, above and beyond what has happened to date. It can create long term savings and drive up productivity in a relatively short time frame, enabling our UK public sector workers, both on and behind the frontline, to be more productive and efficient. Not only that, but this can all be done while delivering services to citizens in the way they want and need them.

If frontline workers can increase the amount of time spent in the community with citizens, even by a relatively small amount, it can have a significant cumulative impact. The police forces who are using mobile devices and 4G connectivity while on the beat (Met Police, for example), estimate they gain on average an hour per officer per shift – time that can be reinvested in

government as a platform
keeping our communities safer. For the NHS, using technology in this way could contribute to the £22bn in efficiency savings it is still expected to deliver by 2020.

Suraj Kika, CEO and founder of Jadu.

There is £1.8bn going into digital which will build on the excellent successes in digital transformation so far - it would be great to see Gov trust SMEs more to deliver as GDS cannot do it all alone. Big service integrators and outsourcing deals should ensure there is a focus on value and should include SMEs as more core to their overall service delivery.

Avoiding using contractors and consultants would also help . No culture was ever built on temporary contract resources, freelancers and people with short-term interests. Departments need focus on making digital services that are ‘built to last’.

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