Minister for the Cabinet Office Francis Maude gave the keynote speech at the World-Class Public Services Conference organised by Intellect at the Royal Society in London on 11 June 2012. Draft text is below - check against delivery.
In hard times, when resources are tight, there is always a temptation to cling to the old ways; to go with the familiar; to resist doing things that are disruptive.
But that is just when you need to be disruptive and challenge the old orthodoxies.
Because of, not in spite of, the huge challenges we are facing - the mountain of debt we inherited, the on-going economic uncertainty across Europe, and an ageing population - our public services need, more than ever, creative, dynamic, pioneering solutions.
What’s more, the quality and efficiency of our public services will play a vital role in shaping the competitiveness of this country - the link between public services and growth is too little talked about.
It would be a great mistake to think that in these turbulent times, with less money, that we have fewer choices. We do have choices.
Carrying on as we are is the risky option and the weak choice. That’s why we are reforming government, to make sure we can support the vital services people depend on. The reality we must face is that the UK Government is spending less money and will continue to reduce spending in the years ahead. We are using our current assets more intensively, managing our suppliers coherently and integrating our infrastructure.
We also have more radical ambitions - to transform the way we operate, to channel our resources more effectively, and to open Government up: to new ideas, to new businesses and entrepreneurs and to new technology.
To do this we need to be on the cutting edge ensuring our services are fit for the 21st century - agile, flexible and digital by default.
We need to make government synonymous with digital services that are cost-effective, and easy to use, not costly, embarrassing failures.
And we need to be at the forefront of the Open Data revolution so we are exploiting our data resources to drive efficiency, increase choice and spur new growth.
This all makes for a great challenge - and a great opportunity.
We couldn’t get moving fast enough on this agenda.
When this government came into office we inherited the largest deficit this country had ever seen.
I was given a task by the Prime Minister - save money in central government.
So we set about relentlessly pursuing efficiency and driving out wasteful spending - in order that squeezed resources could be sharply targeted at frontline services.
It wasn’t easy - we have been renegotiating contracts, tackling vested interests and large suppliers, and cutting back on spend on consultants and advertising. Not the most glamorous or headline-grabbing work.
But it has delivered real cashable efficiencies: an initial £3.75billion cash savings found in ten months since coming into office to March last year. And the savings figures for 2011/12 are being audited but estimated to be upward of £5billion.
However, this is just the start of the story as we seek to deliver far deeper, more radical change.
A key plank of realising our ambition is to transform the way the public sector uses technology internally and for the provision of digital public services.
We all know that over the years government technology programmes have developed a really bad name.
Of course all big organisations - whether in the public or private sector - have examples of failure in delivering big projects and programmes, often ones where technology is a critical enabler.
But in the public sector these failures are of course very high profile - and some of these failures have been spectacular.
So what went wrong?
In the past, the government procured all of its IT needs together with simple commodity requirements like email, collaboration and word processing procured alongside complex ones such as systems related to welfare and taxation.
And contracts were consistently awarded to a limited number of very large suppliers on long-term exclusive contracts.
As a result there was inadequate competition and an abdication of control. The concept of having one supplier, aggregated supply, increased project risk and removed competitive tension.
The Government repeatedly found itself paying large amounts for systems that were delivered late, over budget and which often did not fully meet the original policy requirement. If indeed, they were delivered at all. There are plenty of well-documented disasters - such as DH’s now terminated National programme for IT.
Ultimately, the last Government lost control of IT - it outsourced not only delivery, but its entire strategy and ability to shape the future of our public services.
At the same time smaller, more innovative and efficient suppliers were finding themselves locked out of the supply of services to Government because of what was described by Parliament as a powerful “oligopoly” of large suppliers.
Procurements took so long only the big companies could absorb the cost - which they naturally passed on to us.
All in all, we had an approach that was bad for users, bad for the taxpayer and bad for growth.
While more and more money was being pumped into government IT - as much as £20 billion a year based on some estimates - investment that should have boosted the capacity for the public sector to deliver efficient services, public sector productivity was actually declining.
A little over a year ago this Government set out an ICT Strategy focused on making government technology cheaper, more transparent, more innovative and flexible - with more opportunities for new suppliers, including SMEs.
Last month, our one year on report confirmed we are making significant progress against these aims.
Since 2010, spend controls on ICT contracts have been highly effective in reducing spend and increasing the reuse of services.
In the past it was all too rare for departments, agencies and public bodies to reuse or adapt systems which were available ‘off the shelf’ - or had already been commissioned by another part of government, leading to wasteful duplication.
Now we have an ICT database covering 1 million assets across government, including equipment, services, systems and their availability for reuse.
Thanks to contract renegotiations we have also made savings of £160m on ICT contracts during the last financial year, with an additional £70m for wider public sector organisations.
And most importantly we have started to create a competitive and open marketplace from which we buy IT services and solutions - ending the oligopoly of large suppliers and opening up opportunities to new suppliers, including SMEs.
Perhaps the best example of this is the launch of the G-Cloud framework and the creation of CloudStore - the online marketplace for cloud ICT services that allows public sector organisations to purchase off the shelf IT services on a pay-as-you-go basis.
The initial launch led to over 600 expressions of interest, with the Government Procurement Service subsequently awarding framework agreements to around 250 suppliers, of which around three-quarters are SMEs.
Through the use of efficient and online tools (rather than paper-based bureaucratic processes) the CloudStore makes it as simple as possible for suppliers to engage with government - and I’ve heard suppliers say they can’t believe how easy it is to use.
The Maritime and Coastguard Agency became the first public authority to make a purchase with an SME to buy Agile educational software. The whole process was completed in less than 24 hours.
This is the future. We have recently launched a second “G-Cloud framework” with additional SME-friendly features - giving more companies an opportunity to supply services through the CloudStore online catalogue.
Digital is not another channel, it is the delivery choice for this generation.
With the ambition of making public service provision ‘digital by default’ we have established the Government Digital Service to drive service delivery to digital across government and provide support, advice and technical expertise for Departments as they develop new digital delivery models.
Already we have seen the beta launch of GOV.UK which signalled a new approach to providing services based on real user needs rather than internal Government processes and traditions.
Later this year GOV.UK hopes to place the information and services from hundreds of different government sites on a single, definitive domain. Initial user feedback and testing suggests the average time spent finding information will be reduced from around 120 seconds to 80 seconds, and 10% more people come away from the new site with an accurate understanding of how to complete a task compared to its predecessor. That equates to users suffering 1million fewer mistakes each and every month, with all the attendant savings in time and money for all parties.
Along with numerous digital UK SMEs, we are developing and commissioning new transactional services with departments including BIS, Justice and Transport.
We have seen services as e-petitions demonstrate how these digital services can transform our current model: with development costs of just £133,000 for 2 major releases, and using open source technology, it becomes cheaper and more tailored to user needs as take-up increases. And the cost per transaction is currently under 3 pence and falling.
This is the new model for digital service provision and through the life of this Parliament we will transform many existing government transactions in this way.
For the first time in Government we’re using agile, iterative processes, open source technology platforms and world-class in-house development teams alongside the best digital innovation the market can offer.
However, the digital challenge in government remains profound.
For too long, we have expected the procurement of expensive, proprietary technologies to provide a panacea, yet digital public services lag far behind the everyday digital products we increasingly depend on to run our lives.
While we are relentlessly focused on meeting user needs, the financial and efficiency benefits of transforming our services digitally are colossal. Digital channels are much cheaper than post, phone, or face-to-face interactions. On average, the cost per transaction for a digital service across government is less than 20p - compared to over £3 by telephone, and almost £9 for a face to face transaction and over £12 by post.
We must eliminate failure waste. At the moment, a large proportion of our service delivery costs are incurred through incomplete or failed digital transactions. And these transactions create cross-channel duplication, which burdens the user and costs government a huge amount in repeated costs. For HMRC alone, they estimate that 35% of calls to its contact centres are avoidable, which would save £75m.
While many sectors have already begun to deliver their services online by default - our use of digital public services lags far behind that of the private sector. For example, 74% of people use the internet for car insurance, but only 51% buy car tax online. 40% of pensioners’ bank online, but only 3% apply for their state pension online.
With a 30% switch of current activities to digital, we estimate potential savings in administrative costs of up to £3.8billion.
Our challenge is to make our digital services clearer, simpler and faster - so people will choose to use them. This will require the right digital skills embedded in the Civil Service at every level. And it will require a readjustment from our suppliers and partners. No longer will we accept long-term contracts which see government departments being charged £15,000 to change a word on a website, or accept hosting costs 300 times higher than market leading cloud based services.
The UK has a vibrant and growing culture of digital innovation - an ecosystem which can drive economic growth in troubled times. Government can and must embrace these new organisations, and enable them to transform public services for the digital age. By opening Government commissioning and service provision to these innovators, user needs will be met, Government will become more efficient and jobs will be created in a high growth, globally competitive marketplace.
Digital delivery also matters to our Open Public Services agenda - which will see more and more of our public services delivered not by the public sector itself but from outside, whether by mutuals, joint ventures, social or charitable enterprises or other commercial providers.
A Commercial Models Team has been established in Cabinet Office to support this objective of transforming and opening up the public sector - introducing smarter ownership structures.
Technology can of course fundamentally support business transformations and often necessitates a re-think as to the right model - either to bring in new expertise or because the nature of the business is better suited to a different model.
The Commercial Models Team will be working closely with the Government Digital Service to consider and integrate digital solutions where possible.
And as we move towards “digital by default” delivery across the public sector, they will also consider the implications this will have on existing delivery models.
The final area I want to touch on today is transparency and Open Data.
Historically, governments have hoarded their data - but over the last 20 years something momentous has happened: the world has opened up.
For the first time we have the technology to meet a growing demand for greater openness that is uncontainable and irresistible. It is easier for citizens to demand data - easier for governments to supply it.
Transparency is a defining passion for this government - and the UK is leading the world in making data more freely available.
This has three key benefits. Firstly it means that government is held to account. We have started the regular publication of central department spending data over £25,000 and local government spending over £500.
The result is there are no hiding places. Putting this data out exposes waste, inefficiency and duplication across public services.
Secondly our data commitments are giving people choices about their public services that they’ve never had before - indeed how can you have a choice if you don’t know the options?
We’ve released over 40,000 datasets on our flagship data portal, data.gov.uk, that cover health, education, transport, crime and justice.
Today people can see local crime statistics, hospital infection rates, school results and more. This openness exposes what’s inadequate and drives improvements.
Thirdly releasing data is also driving new waves of growth as we put out raw data in the public domain for entrepreneurs and businesses to work with.
From the release of NHS data to promote life sciences research to the publication of data from all 5,000 weather stations in the UK - we are creating an information marketplace.
Economic opportunities are already emerging in the UK, particularly amongst SMEs and high value sectors in which Britain has global competitive advantage, some of the most high profile of these being based in the ‘Silicon Roundabout’ and TechCity in East London.
We’ve now reached a pivotal moment on this - where we consider the rules and ways of working in a data-rich world. How we use our data resources effectively, creatively and responsibly.
The Cabinet Office will shortly be publishing an Open Data White Paper which will set out the next steps on this agenda - outlining how we will continue to unlock the benefits of data by enhancing access, building trust in data sharing and getting smarter at using data.
The UK has a great technological heritage and I want our public sector to lead the world in exploiting new technology in the future.
So we can empower our citizens; so we can deliver greater value to the taxpayer; so we can support vital economic growth.
This will require a culture change. Across government we need to understand the role of IT in supporting public services better. We need to significantly raise the quality of our in house digital skills and capabilities - as we redesign our public services to become digital by default.
And as I said at the beginning we need to open government up - to the people and organisations that use our services. To suppliers - whatever their size we must be open for business. And we must pursue transparency and Open Data.
Progress has been made - but our work has just begun and we will be setting out further reforms in our Open Data White Paper - and in the Civil Service Reform plan.
Government can come out of this spending review period not only spending less, not only wasting less, but also better, more innovative and providing services that are designed around not Whitehall’s needs but the needs of our users. That’s something worth working towards.