The intelligent state — or when “good enough” isn’t, er, “good enough”

Some years back (well, the late 1990’s to be precise), I started setting out a vision of what I thought a future state might look like. One that had taken technology into the heart of the policy-making process – and which truly understood its impact on policy-making itself, rather than seeing technology purely as the means to execute public policy. I ended up called this concept ‘The Intelligent State’ – and went on to write an article that was intended to be the catalyst for a book which would explore this theme, how it might work – and what it would mean for the UK.

I was reminded of this recently as a by-product of using the latest desktop search tools – having set Windows Desktop search loose on the ramshackle digital archive that is increasingly coming to represent my recent past. I’m sure someone, somewhere, must have created a new piece of jargon for whatever the digital equivalent is of discovering some forgotten files in a dusty attic. For that is what desktop search is increasingly providing for me: a way of finding and surfacing ideas previously explored and developed, but long since put to one side and forgotten in the churn of our short-sighted everyday life.

Of course, ‘The Intelligent State’ never became a book (well, not yet anyway…). But I find it interesting to reflect on what I wrote at that time: which is my excuse for setting out here what a later, updated (unpublished) article articulated in 2004. So, my apologies in advance for the fact some of the statistics will doubtless now be out of date. But in the context of how we think about where the UK heads next, and the key role that technology has in helping us on that journey, here are my thoughts from 2 years ago: which I think still have great relevance today, as we contemplate progress on Gershon and the whole transformational government programme …

In the white-hot excitement of the “dotcom” bubble of the late twentieth and early twenty-first century, governments looked with increasing interest at what was happening in the private sector. They saw a new world emerging, one that enabled companies to take advantage of new technologies and new business models to transform the way they operated – with the result that goods and services could be delivered in ways many times more efficient than had previously been thought possible.

‘Clicks and mortar’, went the clichéd headlines, had overtaken ‘bricks and mortar’ – that is, businesses on the Internet were allegedly displacing traditional high street shops and shopping malls. Worried that they were missing the big party, the dotcom phenomenon provoked high profile commitments to “e-government” programmes intended to ensure that the public sector did not miss the opportunity to share in these Internet-driven benefits.

That was then, of course. A bit like the day after a wild weekend party, the rude, cold dawn of a Monday morning hangover soon arrived: reality re-established itself. The “dotcom” bubble imploded in a spectacular, stellar fashion. Many of us – and worse, many of our pension and long-term savings funds – got badly burnt. Of course, we should have known better and heeded the old adage about there being no such thing as a free lunch. So, apart from the vast amounts of venture capitalists’ money spent on indoor lawns, wok kitchens, “at your desk shiatsu massages”, and wall to wall virtual reality chill-out centres, does anything remain of that “new business model”? And if so, are there any lessons for government to learn – in terms of how it might apply some of the same principles to its own operations? And more importantly, are there lessons for how our system of government, and even democracy itself, can provide a state that works more efficiently and effectively for us, its citizens?

The answers are all – in principle at least – “Yes”. There has been much discussion of the two distinct phases in the “dotcom” bubble: those businesses in the first phase enlightened by a genuine and potentially viable new business model; and the second phase, which seemed to consist more of what I can only categorise as “carpet-baggers” who saw a chance to transfer money from the pockets of venture capitalists and investors into their own – and who quite possibly never intended to run a long term business.

Many of those first phase innovative dotcoms are still going, having established themselves as viable, highly valued businesses: from the likes of amazon.com through to lastminute.com and expedia.com. Technology has also enabled transformations in the way other, more traditional, businesses can regenerate their business models: take the example of budget airlines such as Easyjet, whose business model depends on smart use of the Internet.

It is important we do not lose sight of this first category – that of the real exemplars. The polluted dust-cloud that came billowing out as the “dotcom” bubble burst should not blind us to the value inherent in these true innovators. New technologies can provide improved ways of operating and delivering services – and our government, our essential public sector services, as much as the private sector, can beneficially exploit this.

And, on the face of it, governments across the world clearly agree: most governments are busy in a race to deliver “e-government” programmes that better those of their neighbours. Their intentions are admirable: to deliver and manage services electronically, efficiently and effectively – internally, for their own use, and to citizens. But the use of the “e” in front of these initiatives suggests that electronic channels are far from being core to the way public service delivery is managed and delivered.

And that, I believe, is where the true problem lies.

‘e’ is not something that should be separate or additional to the way business and policy-making is conducted: it should be core to the way our governments live and breathe. By breaking ‘e’ out in this way from its core business, the billions invested in IT each year appears to have little persistent, productive outcomes. “Business as usual” carries on across the public sector – while alongside it numerous unco-ordinated IT projects consume precious resource with little measurable outcome (as reports from the likes of the Public Accounts Committee and the National Audit Office demonstrate). A 2002 NAO report for example warned of a high risk that taxpayers’ money would be wasted on electronic services that no one would use – unless IT projects were planned more efficiently and marketed more effectively.

The underlying policy objective of delivering better, broader, and more efficient access to the wide diversity of public services remains a good aspiration. So too is the development of more efficient and streamlined internal business processes. And governments are using the development of IT services such as online business forms and interactive citizen services to encourage citizens to participate more actively with government. Businesses too can see the potential benefits: reducing the complexity and bureaucracy (or “red-tape”) of their interactions with government through the smart application of technology and e-commerce best practice.

But governments still often deliver services focused on their own perception of needs rather than of those they serve. In general the system and processes that underpin the operations of our public services appear deeply flawed: every UK government department and agency delivers each of its services separately. So if you want to claim all state benefits for which you might be eligible, you have to interact with at least three entirely different government bodies: your local authority (who administer housing benefit and council tax allowance), the Department for Work and Pensions (who administer Job Seeker’s Allowance and Child Benefit) and the Inland Revenue (who administer New Tax Credits).

So now, instead, of spending a day visiting three different government offices, you can spend a day visiting three or more completely different government web sites to do the same thing (or, if you’re feeling particularly bored – or desperate – phone three completely separate call centres and provide each of them with the same information).

Each time you fill in an “online” form (which may still be one you have to print out, complete with a pen and return through the post), you have to re-supply the same personal information. So old fashioned paper has merely become “e-paper”: as inefficient as anything that has gone before. That seductive ‘e’ is actually a misleading sticking plaster that masks the reality that little has fundamentally changed in the way these services operate. In many cases, ‘e’ has become an additional cost, with new helpdesk staff and new systems required to support these new channels, and yet no associated benefits or savings for the public purse.

Back in 1997, my colleague Phil Stradling worked with several government departments and high street banks to demonstrate how joined-up services could be delivered at the point of delivery – regardless of the fact that the back office departments remained silod in the way they structured the administration of those services. This joined-up service worked. This is a key point: back in 1997, everyone agreed technology was an enabler, not a blocker – that services could be delivered in citizen-centric ways. So what stopped such joined-up services being delivered? Why, all these years later, do we still have no services that really approach what was delivered through technology back in 1997?

This is not to point blame at anyone: the types of change we are talking about are both comprehensive and complex. Rather it is to point up the fact that we need to work across state, public policy, citizen and technology boundaries. To change systems and patterns of human behaviour we have long grown accustomed to is no trivial task. We need to work collectively to help address such issues. The current status quo undermines both public service reform and the future of the UK, placing us at a competitive and social disadvantage with other nations who are busy truly transforming the way their countries operate.

Such inefficiency, inconvenience and poor service is of course both a nuisance and a waste of finite public resources. But far more serious and life-threatening consequences arise from our ‘un-joined-up’ government model. Lord Laming’s Climbié Report and the Bichard Inquiry , for example, demonstrate the truly devastating results of the systemic failure of public agencies to work properly together.

Managing the change to a user-oriented mode of government – built on the concepts of a modern, citizen-centric democracy – remains the key challenge. Do we want the UK left to exist in a ‘good enough’ state or to make the change to ‘great’? And without the aspiration and driving changes required to potentially move the UK to ‘great’, the outlook is not promising. Given the international challenges we face – and the willingness of other countries to reinvent themselves – it is likely that natural processes of attrition will end up ensuring that one day we wake up to discover that the UK is not even ‘good enough’ if we do not make the right structural changes now. And recovering from that position will be more costly and painful than taking such actions whilst we still have the opportunity.

This silo approach to public services has a high economic cost, ranging from inefficient use of resources through to deliberate and fraudulent manipulation. In the UK alone, it is estimated that billions of pounds are lost annually through fraud – a large part of which is directly attributable to the current silo nature of publicly funded departments and organisations. An investigation in the UK by the Benefit Fraud Inspectorate (BFI) revealed potentially high levels of fraud due to the lack of co-ordination between the central Government Benefits Agency (responsible for paying out some £96 Billion annually) and the housing benefits paid out by local authorities (a further £13.7 Billion annually). The BFI found that as well as a lack of co-operation between the central and local agencies, a vast array of incompatible computer systems were also contributory factors. The BFI put a figure of £840 Million per annum on the estimated losses arising from this lack of co-ordination alone.

So “e-government” needs to be about much more than the provision of online services and interactions with citizens and businesses. Efficient online services have other major dividends for governments and those who fund them. Even reducing a small percentage of the amount currently estimated to be lost through fraud or waste ensures a payback far larger than the initial “e-government” investment.

In early 2003, CGEY reported on progress in Europe on online public sector services . They found that:

From the 10,500 public service providers analysed in this study across the 18 participating countries, 86% are available on line. This shows a growth of 12% in one year (from October 2001 to October 2002). For the 20 public services analysed across the 15 EU member states, plus Norway, Iceland and Switzerland, the online sophistication has grown by 15%-points in one year from 45% to 60% with Denmark, Sweden, Ireland and Finland showing progress beyond the level of two-way interaction. The greatest progress has been made by online services for businesses. In almost every country, public services for businesses score significantly higher than those for citizens and this gap is growing.

Well, we’ll ignore the fact for the moment that the phrase ‘online’ seems to mean so many things (in the UK for example, most government services currently classified as ‘online’ are in fact static forms available on a web site that a citizen can print out, fill in with a pen and, er, post back in the usual way. Not quite what I believe we had in mind).

The conclusion that business services are growing faster than citizen services is not surprising. Business services are generally already more structured and may already have been conducted electronically using pre-Internet technologies such as EDI. Governments may also take a policy decision to oblige businesses to interact electronically (as the UK has done for certain services, mandating electronic use by 2008). Citizen services however often involve a wide variety of different agencies and therefore present more complex business and technical problems in their “joined-up” online delivery. Rather than avoid resolving these issues, as the CGEY findings suggest, governments should instead dedicate more focus on them to drive through the necessary changes.

In March 2004, Gartner further stoked the debate by reporting:

Most e-government programs have reached or start[ed] moving beyond the Trough of Disillusionment. Governments around the world have realized that their obsession with delivering more online services and electronic front-office applications will not help them meet their original objectives. The focus must shift to deploying effective enterprise architectures, supporting the re-engineering of legacy applications into smaller components, greater attention to non-portal channels, and establishing more rigorous performance measurement frameworks .

Whilst it is true that governments probably expected quicker pay-back from “e-government” investments than it has been possible to deliver, the Gartner analysis illustrates part of the problem. The blocking issues here – and the potential for true transformation – are not solely technology issues to do with best practice architectures and technical components as Gartner seem to imply (although I don’t deny that implementation of their recommendations would at least be a welcome step in the right direction). They are the underlying dysfunctional business models and processes that exist in much of the way the public sector is structured, often as a result of our own history rather than of deliberate design.

Even the best technology in the world will do little to transform government if there is little change in the way the public sector itself operates. Delivering technology transformations in planned co-ordination with associated business process reform provides the best route to improved services and hence a worthwhile return on investment. As Gartner point out, until government moves away from its current mandation of the use of portals and truly embraces the intermediary model for the delivery of public services they may well continue to find themselves stuck in their present ‘trough of disillusionment’.

Overall, governments need to balance the benefits of the significant investments in public services they are making with the need to transition to a model that places businesses and citizens in control of their public services experiences. Government also needs to re-assure its users with guarantees relating to personal privacy and citizen rights. For example, in return for being able to operate more efficiently and at lower cost internally as a result of asking us to buy-in to ideas such as a central citizen registry or entitlement card, we should expect the reciprocal right to be easily able to hold service providers to account. To view, for example, information on who has used or accessed our personal information and for what purposes.

For the social contract to continue to work between the citizen and the state, rights and obligations on both sides need to be recognised and adhered to. And technology can provide a smart way of guaranteeing and enforcing that contract between the citizen and the state.

Current estimates around Whitehall suggest as many as 180,000 civil servants might not be required if government can manage to overhaul the public sector on the back of changes in the way it operates. That type of outcome needs to be taken seriously – and debated honestly – if we are to realise the aspiration of delivering better, higher quality services without increasingly punitive taxes being levied on citizens and businesses. The recent Gershon efficiency review and the Chancellor of the Exchequer’s associated targets for headcount reduction have only just begun to catalyse such debates.

So reform of public services needs to be less about technology as a snake-oil cure for all of government’s ills, but centred instead on the issue at the heart of this discussion: how does a modern democracy ensure the best provision of public services? This will involve a wide range of vested interests on all sides being prepared to set aside inertia, dogma and the status quo.

If we can agree what type of society we’re trying to build, and the role of public services in that society, we can at last start to plan the journey that will take us there. The focus needs to be on the citizen, the needs of business and what sort of democracy and society we want to build for the future. That is not to say government does not have a moral duty to current public sector employees in terms of how it transitions to a new model: it clearly does. [Transparency declaration: I used to be a public sector employee myself …] But that should not override its duty to the wider interests of the UK population and the social and economic viability of our nation’s future. If we do not move the debate on to the real battlegrounds, it is not only the nascent economies of the likes of China and India that will overtake us, but closer to home the East European ones of the new Europe too.

Part of the problem lies in the fact that the United Kingdom is doing well enough that it doesn’t feel the need for fundamental reform. After all, the UK is the fourth largest economy by GDP, has the twelfth highest GDP per head and despite the move away from traditional manufacturing and industry, is still ranked fifth largest in the world for manufacturing output and fourth for services.

But statistics can always prove whatever you like: underneath those headline statistics on manufacturing and services is the reality that over 70% of GDP is now contributed by services, with just under 30% from manufacturing. The UK is ranked in twenty-first place for its overall global competitiveness – and doesn’t make the top fifty for highest economic growth. The share of foreign direct investment into the EU that the UK receives fell from 28 percent in 1998 to just 5 percent in 2003. The most dynamic part of our economy, outperforming many others, is in the creative area: possibly a sign of things to come and something we should look to exploit.

As Jim Collins has pointed out in Good to Great , what often prevents a company or organisation from becoming great as opposed to merely good is that when things appear to be ‘good enough’ there is no incentive to reform and become great. There seems little reason why the same principle does not apply to government – and indeed to a nation – too.

One other obstacle is that technology, far from being recognised as one potential weapon in how UK plc reinvents itself, is often presented by the media in a negative or destructive light: viruses, threats to personal privacy, high street closed-circuit cameras snooping on our every move, failed IT projects and so on. But this is only true if we, as citizens, take a passive role. Technology can equally be the means by which citizens reach a balance with the state, using it to safeguard their rights.

We need much more debate on these topics, debates that seek to find a balance between public policy, citizen interests and the legitimate needs of law and enforcement.

Today, the UK government is already spending some £12billion+ annually on IT-related projects. The overall return for UK plc on this investment does not appear to me as good as it could be – largely since IT remains mapped onto the existing dysfunctional ways of doing things, rather than being used intelligently to help with the transformation of services and the way government and the wider public services eco-system thinks and operates.

While frontline services such as health and education remain an area of high concern for UK citizens, it is difficult to justify why IT expenditure on this level should continue: unless it proves able to return a high value and demonstrable improvements in the operation and service delivery obligations of the state. The recent recommendations from the Gershon Efficiency Review and the appointment of the Head of e-Government in the shape of Ian Watmore will help: but only if they can help influence the whole approach to the way government and the state operates, rather than operating in an IT box. IT-change needs to be a supporting pillar of business process reform and modernisation – if we can find both the political will and a wider consensus within British society that this needs to happen.

Far from being exclusively the kind of ‘big brother’ threat that the media likes to portray, technology can be used to square the circle of enabling the state to become more efficient whilst strengthening our rights as citizens. Over time the primary objective needs to be a consensus on how we re-engineer the way government and the state works, both internally and in its interactions with citizens and businesses. If we can achieve this, government will be able to improve its operations, reduce administration costs and inefficiencies and put more into frontline services. And expenditure on IT will be an investment that delivers benefits rather than being seen as an operational cost of its own with no real business value.

Innovative approaches from elsewhere in the world illustrate best practices in the development and delivery of government in the twenty-first century that we could apply to UK plc – if we could only successfully challenge so many of the assumptions that make us merely ‘good enough’ rather than ‘great’.

If we get this right – and clearly we must – we can help move the UK on from its post-industrial, emergent “knowledge-economy” age. The result will be what, for want of a better term, I have nicknamed the birth of the Intelligent State: a state rewired at its very core with technology and simplified, citizen-focused processes; a state predicated on the needs of citizens and society; a state that delivers higher quality public services at lower cost.

Idealistic? No doubt – but also achievable: if, that is, we can move the “e-government” debate on from its current narrow focus. Far from the conclusions that Nicholas Carr reaches in his paper IT Doesn’t Matter, technology can provide a truly transformational asset that can help a country such as the UK re-develop, redefine and re-invent itself.

What remains to be proven however is whether we can help overcome our institutional tendency to tolerate the status quo and our muddling-through, ‘good enough’ world status – and hence enable the transformation that the UK’s public services, our underlying democratic model and institutions, and our future competitive educational and economic position in the world need.


This blog post originally appeared when I hosted NTOUK on SimpleBlog. It’s one of several I’m retrieving and posting here to bring together my posts in one place. The content, date and time shown for this post replicates the original. Many links are, inevitably, broken: where I can, I’ll substitute ones that work, particularly where the Internet Archive Wayback Machine has captured the content originally linked to.

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