The UK government could save £2bn by 2020 by overhauling its clunky technology and legacy contracts and shifting citizens to digital services, according to the Institute for Government.
The independent charity's report claims that savings through digital have so far been minimal. Far more could be saved with a proper focus on transformation of government systems and shifting more users to digital services.
A move to "online only" was touted by former Cabinet Office minister Francis Maude as far back as 2011. In 2012, a report by GDS claimed that digitising transactional (public-facing) government services could save £1.3bn a year, primarily through reducing staff numbers.
But those savings have not materialised.
It noted examples such as the Driver and Vehicle Licensing Agency being able to build a system in-house for £5m, as opposed to £26m quoted by a supplier. Publishing costs in the House of Commons fell by £4m to £7.7m as a result of using electronic papers, and gov.uk reduced the cost of running websites by £61m in 2014/15.
"These are mostly small changes. They are a long way from the savings that are needed. Making larger savings will require government organisations to achieve the wider transformation outlined above," it said.
"We have reached a tipping point," said the Making a Success of Digital Government report. "If the leadership does not emerge to drive the changes, there is a risk that digital teams will continue to be viewed as website designers, brought in only at the very end of policy design processes."
It said the absence of a strategy for the Government Digital Service since it was awarded £450m last November has left its role unclear.
It said the body needs to re-equip itself to support the government and should support and enforce central standards for user experience and to ensure interoperability.
"GDS should use its expertise and strategic overview of government to identify priority work and capability gaps, and deploy teams into departments to support their work where necessary."
However, it added that the body should "place less emphasis" on developing applications for cross-government use, only doing so where the market does not provide good options.
Report author Daniel Thornton said: "Tinkering around the edges of digital government has taken us only so far – now we need a fundamental change in the government’s approach."
He said it was "not encouraging" that the approach by departments has been mainly to extend their legacy outsourced contracts, as the Home Office did recently with its 18-year Fujitsu deal.
But he said an aggressive centre doesn't necessarily help. "For example GDS and the Cabinet Office helped reset Universal Credit but caused more harm than good with the Rural Payments Agency, by blurring accountability. GDS's recent aims to support, enable and ensure are clearer than the vague values that proceeded it."
He added that the control of departments' budgets have only gone so far in preventing spend on new projects, but have not been an adequate mechanism to tackle old systems and enable transformation.
Thornton said there are huge potential savings to be made if the government gets this right – "which makes it all the more disappointing that the PM and Chancellor have not been as explicit about their commitment to digital government as their predecessors". ®