The UK public sector employs more than 27m people – nearly 20pc of Britain’s population. This enormous patchwork of institutions, from local councils to central government departments, has a total spend of around £800bn.
When you are dealing with organisations of this size, it is natural that there will be inefficiencies. A single local council needs to cover hundreds of different disciplines, from pruning trees to special needs education, gritting roads to pest control. Each of these individual disciplines is likely to have its own IT system and operational platform. This means that a single council can run more than 70 different systems, none of which talk to one another, each linked to a separate budget.
As an entrepreneur, this model frustrates me. Silos are counterproductive: you can’t pass on best practice, share resource, or collectively problem-solve when you operate in a bubble.
There is another issue: the way that government budgets are allocated completely destroys any incentive for councils to unify operations or work with other departments. When the government slashed local council budgets a few years ago, the austerity measures meant that salary increases were stopped and any budget left over at the end of the year was reclaimed. Local councils now rush to spend their entire budget or risk losing it. Different departments are in competition with each other, which prevents them from working for the greater good. It’s quite perverse and the opposite of a pro-efficiency mindset.
At BigChange, we work with several local councils. Unlike many of their peers, these councils are battling these pressures and are trying to change. They have brought in the digital transformation specialists and business improvement executives and are actively looking to modernise.
Our platform typically takes out up to five legacy systems in one go, replacing them with a seamless, cross-discipline platform that unites the tree surgeons, special needs teachers and gritters alike. It’s incredibly exciting to see the savings that we can generate. And these councils shouldn’t have to lose their budgets; they should be able to funnel the savings into other under-funded projects, such as help for the disabled.
This would be a revolutionary change to the outmoded model but one that is sorely needed. There is huge potential for us, and others like us, to help councils and other government departments but progress is slow. It’s not down to the people – most councils employ brilliant and committed staff. It’s the system that is flawed.
One of the main reasons that there has been a huge push for government to do more business with small firms like ours is so that the public sector can benefit from our innovation and speed of delivery. But the government must do more: it must take the bold step of incentivising the public sector to make the big changes.