Innovation in UK Local Government: From Cashable Savings to New Revenue

30 July 2013

Chris Smith

Chris Smith

Former Head of Digital Transformation

One of the best examples in innovation to come out of the public sector in recent memory is well underway in an English local authority.

Regardless of its providence, which could be traced to the success of businesses providing outsourcing services to public sector organisations, the massive technology and transformation project underway defines the future of innovation in local government across the United Kingdom (and, perhaps, the world).

In a time of doing more with less, driven largely by spending cuts, local authorities are facing a financial black hole of approximately £15 billion in the next five years, according to SOLACE.

Over the past few years, public sector organisations have rushed to use technology and other means to achieve mandated savings. However, for many, it has either been too late or not enough, resulting in many continuing to financially struggle, whilst maintaining front line services. he reason is their leaders have been unable - or unwilling - to implement needed change to find new ways of becoming self-sustaining.

Local authorities must do more to transform how they operate to deliver value, transparency and accountability to taxpayers including ensuring front line services are maintained to customers, with less tax revenue.

Going back to the English local authority, its visionary leaders have dared to go into uncharted waters. ood for them, and taxpayers, I must add.

Initially driven by a desire to deliver cashable savings, they have  realised early on that it could not only deliver savings by establishing a shared service for itself but the local authority could generate revenue if it provided innovative outsourcing services to other public sector organisations.

It is worth pointing out that the UK is the world's second largest public sector outsourcing market, worth £3.7 billion in  2012 (Source: Information Services Group). In other words, there is plenty of room - and appetite - for local authorities to enter and succeed in the future.

What is remarkable here isn't that the local authority has taken a more business mindset in terms of improving operations such as sharing in back-office areas including finance, human resources and procurement. The real innovation has come as a result of embracing fresh ideas including new technologies that will enable the creation of an agile business model required to overcome a host of identified challenges.

This means looking at and using technology differently. It isn't just used to address operations inefficiencies such as stopping overpayments to suppliers.

The right technology - which gives users the relevant insight to make smarter, timely decisions - can deliver better, personalised customer service to taxpayers.

Forward-looking local authorities are putting their customers first by setting a clear vision of the future, developing a technology roadmap and change management programme to succeed in the future.

Those that get it right will not only have happy customers but will probably pick up a few additional votes in 2015.

The public sector is innovating at an unprecedented rate. For some, especially employees, it's a scary time. It is only natural.  Yet, I believe we are entering an exciting era of new government run for and by commercially minded citizens. 

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