Where should cash-strapped public sector organisations allocate funds?

Upskilling employees, smarter outsourcing and new technology could help reduce costs and reduce debt – and deliver better service


TS Eliot’s poem The Waste Land, published exactly a century ago, begins with the words: “April is the cruellest month.” One hundred years on, considering the exorbitant rise of energy costs for British citizens and businesses in April 2022, it’s hard to disagree. Unfortunately, it appears worse is to come, with many feeling the world will end with a whimper – so how can the public sector cope?

On 5 May, the Bank of England lifted interest rates to a 13-year high and forecast that inflation would soar above 10% in the coming months, warning that the surging rise in living costs could plunge the economy into recession this year. But it’s not only citizens who are squeezed; the public sector is already in the red – just as demand for public services is likely to reach unprecedented levels.

The latest Office for National Statistics figures show that total public sector debt stood at £2,344 billion at the end of March 2022. This is equivalent to 96.2% of Gross Domestic Product (GDP), a level not seen since the early 1960s.

Further, public sector net borrowing was £151.8 billion in the year to March 2022. This was the third-highest borrowing figure since records began in 1947, and is around 6.4% of GDP.

Given this gloomy backdrop, how should public sector organisations plagued by money worries invest in technology solutions that best serve struggling citizens? Granted, costly gambles on the metaverse and vanity projects are not a good idea right now, but what’s the best way to allocate funds?

Jon Crowcroft is a co-founder of iKVA, an artificial intelligence knowledge management company, chair of The Alan Turing Institute, and Marconi professor of communications systems in the computer laboratory at the University of Cambridge. He is well placed to answer these critical questions.

Investing in skills to address huge delivery challenges

“My advice would be to match the budget to the current skills base, or organisations will face the challenge of undertaking a huge retraining exercise that will overwhelm their resources,” he says. “Government departments such as transport, energy and healthcare are relatively technologically advanced and staffed by individuals who inherently use technology for timetabling systems, power grid maintenance and data analysis. Computing is embedded into job roles in these departments, particularly in healthcare.”

Other areas, such as the legal sector, have more limited skills, Crowcroft says. Their relative ability should inform where additional funds will be required to support the deployment of technological solutions. 

Alex Case is public sector industry principal at Pegasystems and a former senior civil servant at 10 Downing Street and the Cabinet Office, who recently oversaw cross-Whitehall Brexit delivery. He has also led large-scale public sector reform initiatives in the UK and Canada – and is in no doubt of the scale of the task ahead.

“The government continues to face huge delivery challenges, from coronavirus, Brexit, the war in Ukraine or the cost-of-living crisis, including dealing with backlogs, driving levelling up, getting the health service back on track, transforming social care and dealing with the safety of tall buildings. These need government operations to run effectively and efficiently and for the least amount of cost possible.”

Low-code can revolutionise how government designs and builds IT. It can help a business to get what it wants and needs from a new system, not the system the IT team thinks the business needs

Low-code software development uses drag-and-drop features instead of extensive coding language to build applications. The result is that it is faster to complete and non-professional coders can use it. This makes it an excellent option to accelerate innovation and reduce costs, suggests Case. Its uses across government departments could include streaming and improving outdated and clunky customer service processes, digitising inefficient and complex programmes and back-office processes, and modernising debt collection while reducing fraud.

“Low-code can revolutionise how government designs and builds IT. It can help a business to get what it wants and needs from a new system, not the system the IT team thinks the business needs.”

Additionally, he says this approach can bridge the frequent divide between business users, subject matter experts, product owners, and the technical design and developer teams.

Where, though, should the public sector focus its investment now? Crowcroft contends that it is less where and more how the money should be spent, celebrating the increased adoption of AI. “During the pandemic, the public sector successfully used AI and automation to meet increased demand for services,” he says. 

“AI can automate bureaucratic processes that are currently resource-intensive, reducing the human workload. This will offer cost-savings, improve accuracy, and enable people to do other things that have a positive return for their organisations, such as analysing data to identify where other improvements can be made.”

An example of this is in the care sector, says Crowcroft. By automating some of the paperwork, the amount of time a care worker can spend with people in need increases. “The processes at the human level are reflected in documentation, and that shouldn’t be the case anymore,” he adds.

One obvious way for the public sector to reduce costs is by being smarter with outsourcing while improving in-house skills. For instance, the value of contracts awarded by the UK government and public bodies to consultants was £2.5bn in 2020-21, as organisations used the private sector to deal with the pandemic. 

“Consultants will always have a place in the public sector,” concludes Crowcroft. “But using technology to unlock data insights and training our people to understand the information – will improve confidence in their decision-making.”

Is low-code the answer to public sector worries?

“The government knows that low-code can help take the pressure off and has invited proposals for innovative platforms and software for digital public services,” says Mark Smitham, lead for public sector marketing at Mendix, a low-code platform. “Their shared vision is to deliver more user-centred, cost-effective, local public services through open, collaborative and reusable work.”

He suggests Knowsley Council is a prime example of a local service provider that used low-code to adapt to the increased demand from residents and local businesses. “In just 24 hours, the council built an application that enables Knowsley residents to request assistance or volunteer their services to support their local community,” Smitham continues. “This application connected people who need help with those who can help, providing support for 7,000 vulnerable residents.”

Elsewhere, a low-code platform is being used to address the growing issue of financial debt with core business transformation at StepChange, the UK’s largest debt management charity, says Alex Case, public sector industry principal at Pegasystems. “Additionally, low-code solutions are being deployed to tackle costly fraud and errors for the Department for Work and Pensions. It is transforming how the country registers land and property, and even supporting how the Ministry of Defence recruits essential skills to predict and deal with a fast-paced and changing environment.”