Press release

Government publishes costs of transactional services for the first time

The government has for the first time released details of the cost per transaction for some of the biggest services it provides to citizens.

17 January 2013

The government has for the first time released details of the cost per transaction for some of the biggest services it provides to citizens, the Minister for the Cabinet Office, Francis Maude, announced today.

Every year there are more than a billion transactions between British citizens and the state. This government has counted how many such transactions there are - mapping the interaction between the citizen and state. Today, cost-per-transaction data for 44 of the biggest public services are being released, including:

  • visa applications;
  • Child Benefit claims;
  • Companies House account filing;
  • practical driving test bookings;
  • student finance applications.

Taken together, these 44 services process over a billion transactions every year - over 88% of the total handled by central government. They cost just over £2bn a year to run.

Costs range from:

  • 5p for Stamp Duty Reserve Tax returns; and
  • 47p to pay Statutory Off-Road Notification (SORN);
    to:
  • £223 to process visa applications; and
  • £727 to process every claim through the Single Payment Scheme (SPS) managed by the Rural Payments Agency (RPA).

Francis Maude said:

Making this data public is an important step for transparency and ensuring government is accountable for the cost and efficiency of the services it provides. The UK government has never done this before and, as far as we know, no other country systematically tells its citizens how much they pay for the services they use - for example, to pay car tax, apply for a passport, or file annual business returns.

This data sets a baseline for service performance - something the public can, and should, judge our progress on as we move to making all government services ‘digital by default’, as set out in the Government Digital Strategy and the departmental digital strategies published at the end of last year.

Making government digital is also at the heart of our plans to reform the Civil Service, helping it to work in new, faster, more efficient ways, be smaller, more open and less bureaucratic.

Mike Bracken, Executive Director for the Government Digital Service (GDS), said:

At Government Digital Service our focus is always on users. Greater visibility around service performance - including cost per transaction - is an essential step towards delivering digital services that are simpler, clearer and faster. We are working closely with departments to transform key public services and help them to become digital by default.

As a further commitment to transparency, the government has provided a data file of the costs of the 44 services which can be downloaded and is also available on data.gov.

Comparing services is a complex matter. The most expensive service is not necessarily the least efficient. For example, the Passport Applications service costs £64.68 per transaction, but is a highly complex process involving identity checks, secure printing of passports, postage and multiple channels, both online and offline. The Statutory Off-Road Notification (SORN) service, on the other hand, is a much simpler transaction that can be done completely online and costs just £0.47 per transaction.

This data is constantly evolving, and GDS will continue to support government departments in providing the data and conduct a regular data collection exercise. Transactions Explorer will ultimately allow both the government and the public to effectively compare service performance over time, and provide ready access to a powerful measure of progress and improvement.

Notes to editors:

  1. The cost per government transaction data and the Transactions Explorer can be found here: transactionsexplorer.cabinetoffice.gov.uk

  2. There is a huge volume of transactions with government. There were more than 1bn individual transactions with central government departments in 2011/12. This number rises to nearer 1.5 billion when other governmental organisations, such as local government, are taken into account. These transactions are not evenly spread across departments, with just seven responsible for around 90% of central government transactions. These are HMRC, DfT, DWP, BIS, DEFRA, MoJ and the Home Office.

  3. The government provides more than 650 transactional services, used over 1 billion times every year - but presently there are only a handful where a large majority of people who could use the online option do so.

  4. The data released today follows the release of the list of government transactions by volume in July 2012. Read the GDS blog post.

  5. Taxpayers are currently spending an estimated £4 billion each year on providing non-digital transactions - such as by telephone or post. By putting everyday transactions online, the government will deliver savings of £1.2 billion by 2015. On the basis of historical savings achieved by existing digital services, we estimate that £1.7 to £1.8bn of total annual savings could be made by shifting the transactional services offered by central government departments from offline to digital channels. Of this, £1.1 to £1.3bn will be saved directly by government, with the rest passed on to service users through lower prices. These figures do not include the potential costs of a transition to digital, but also do not include the additional savings that could be gained from fundamental service redesign or back-end technology changes.

  6. The Government Digital Strategy and individual departmental strategies are available at www.gov.uk/digitalstrategy
  7. Digitising transactional services will save people and businesses time and money; by making transactions faster, reducing the number of failed transactions and simplifying the end-to-end process. Our estimates suggest that an hour spent interacting with government costs the average citizen £14.70. If just half an hour were saved by digitising every transaction currently completed offline, the total savings to the economy could therefore be around £1.8 billion. Furthermore, many public services are run by agencies that recover their costs directly through user charges, so reducing costs provides the potential for savings to be passed on to users.

  8. The Government Digital Service (GDS) was set up within the Cabinet Office to deliver world-class digital products that meet people’s needs and offer better value for taxpayers’ money. For more information about GDS, visit http://digital.cabinetoffice.gov.uk/

  9. The Civil Service Reform Plan set out a series of practical actions which will help make central government smaller, faster, more unified, more accountable for delivery, more commercially capable and more digital. It can be found at www.civilservice.gov.uk/reform

 

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