Brave New World

Civil servants: if your department hasn’t moved some of its services online, you’re behind the times; in the wrong paradigm; a square peg in a round hole; an analogue transmitter in a digital age. It’s best to get clichés out of the way early on, because when discussing the topic of digital public services, they’re par for the course.

This is a big topic, and an urgent one. Formerly part of the ‘Smarter Government’ initiative, the drive for digital public services is now called ‘channel shift’ – and it’s central to the coalition’s aims and ethos. How should the switched-on civil servant respond?

In the past few months, Cabinet Office minister Francis Maude has frequently indicated that some face-to-face services, deemed superfluous, will be closed in favour of online alternatives. In some departments, meanwhile, systems for handling paper-based forms will shut down, with clients directed instead to web-based portals. Indeed, Maude couldn’t have been clearer when speaking at the Conservative Party conference last month. “We’re working urgently on channel shift,” he told a fringe meeting. CSW understands that the government wants to adopt a mindset in which government transactions and information are ‘digital by default’.

Just last week, the government published its business plans online, revealing some changes that will be happening this year. The targets for the Department for Work and Pensions (DWP) were clearest: by the end of December, DWP must “move Jobseeker’s Allowance online”. Further, the department has to increase the proportion of Jobseeker’s Allowance claims made online to 80 per cent by June 2011, and by September 2011 has to introduce a digital telephony service to provide automated answers to contractor’s queries.

Digital telephony is the ugly sister of moving services online, but has at least been invited to the ball (albeit smuggled in by a back entrance and ignored by the paparazzi.) Channel shift doesn’t just mean services moving online, though that’s generally how the term is used: actually, any shift from traditional mediums of service delivery to new, cheaper access points falls under the definition.

The benefits

Both online services and automated telephone services are, as a rule, significantly cheaper than face to face, paper-based or postal alternatives. Before addressing the conference fringe, Maude stressed to CSW that “moving transactions online produces big efficiency savings”; and in his Spending Review speech, the chancellor named a number of channel shift projects that he hopes will produce big savings.

Launching new digital services, though, costs money up-front; investment is always required, says Lord Knight, a work and pensions minister in the last government. So civil servants will have to put forward a proposal to the Efficiency and Reform Group (ERG) – which, under the current ‘control regime’, must sign off any IT project worth more than £1m – and this should focus rigorously on demonstrating both that there’s a clear market for the new service, and that officials have made careful plans to ensure a rapid return on investment. Civil servants must “make a clear business case”, says Knight.

The Treasury will also have to be persuaded, and it’s always sceptical of promises of future savings. “There is widespread scepticism in the Treasury when you say: ‘spend to save’,” says Maude. This will not be an easy sell; but officials will find their case much strengthened if they can show that their plans revolve around the reuse and adaptation of existing equipment and capabilities rather than the purchase of wholly new systems. At Tory conference, Maude’s advice in building a successful business case was clear: “Be creative, be innovative. We need to move away from the assumption that all investments need to be in brand-spanking new technologies,” he said. “What can be reused? We need to do much more cheap and cheerful stuff.”

The ERG may also be persuaded by evidence that channel shift projects will have other, wider benefits for departmental efficiency or collaboration. For example, Companies House found that by moving the submission of company returns and accounts online, the department could better collaborate with HMRC.

Arthur West is customer insight manager at Companies House. He explains that “the majority of accountants will submit accounts at the same time as submitting records to HMRC,” and cites the creation of a joint filing process, whereby customers can submit their corporation tax forms online simultaneously, as “one of our key achievements”.

Companies House and HMRC can now share the same data, making it easier for the service user, and encouraging people to start using online services. Consequently, says West, Companies House has been able to cope with a doubling in demand without needing to increase staff numbers.

How do you shift channels?

One key element of building a strong business case is to demonstrate that the new service will fit the needs of the user. If it does, customers will migrate; but if the new service is awkward to use or user-unfriendly, getting people to migrate will be infinitely harder.

When the Driver and Vehicle Licensing Agency introduced online vehicle tax renewal – often cited since as a great success – it encountered an interesting problem: brand loyalty. According to DVLA research, 40-50 per cent of those who were slow to adopt the new system said they were reluctant to migrate because they believed that, by renewing their car tax at the local post office, they were ensuring that it remained open. In fact, post offices received tiny fees for selling car tax discs; but until the DVLA challenged these views, it would always be pushing uphill in trying to encourage migration.

The best way to make sure a service fits the needs of a user is to commission research. West explains that “you don’t go out to customers and say: ‘We want you to shift channel’. The underlying requirement is to understand how customers interact with you, understand what they want to see in the future, and build those systems around customers’ needs”.

West adds that the new systems must, of course, be thoroughly tested. He advises using a mix of internal staff and external customers. “Before we unleashed a service on customers we would get our staff to put ‘customer shoes’ on, so people who have knowledge of how customers will operate can go through the process,” he says. In fact, he advises using internal staff as much as possible; external research is expensive, he says, and “Once you’ve seen three or four users, you’re not going to see many other problems after that. You don’t need hundreds of customers in tests.”

However, West’s experience relates to the users of Companies House: a highly literate set of people who are knowledgeable about their needs. When testing more complex services or those aimed at different demographics, such as users of Jobcentre Plus, it’s probably wise to do extensive testing with user groups.

Like many government services, those run by Companies House have interfaces with the products and services offered by non-governmental organisations, and West points out that ensuring new online services are compatible with other related services can save money for both providers and users. Many accountants use private sector software with set templates, so Companies House worked with the software developers to develop a joint online template. As a result, this year 93 per cent of all annual returns submitted came in electronically, and – while only 23 per cent of accounts submitted were electronic (there is a long history of paper records in accountancy) – West says the “lion’s share” was submitted using the templates built by Companies House with the private sector. There are clear cost savings from such digital, template-built submissions, and Companies House is to incentivise people to submit more accounts online by introducing a lower fee for digital filers.

Obstacles 

There are some challenges in making online services work, of course – particularly where the public fear the potential side-effects of putting their data online. Knight says there are “sensitivities around losing civil liberties when the government holds data, and [around] which bodies have the right to see that data”. And the Tories feel these concerns keenly: Maude advises civil servants to pursue small-scale projects using existing data rather than gathering and storing new information.

Fraud is also a concern. There must be suitable checks and balances, and many services involve a need to verify people’s identities. “From the government’s perspective, you need to be able to know they are who they say they are,” Knight explains.

Peter Hurst is the chief executive of CIFAS – a not-for-profit membership association which works to prevent fraud – and he sounds a warning about the risk involved in moving services online. “Fraud risk varies by delivery channel, with face-to-face being the lowest risk, followed by postal and then telephone, and lastly the internet,” he says. The private sector has been selling services and verifying identities for some years online, he adds, and government departments should seek the advice of businesses that have overcome similar challenges.

Hurst gives a specific warning to DWP, which is moving Jobseeker’s Allowance online. “Fraudsters who are aware of the government’s intention to deliver state benefits and credits over the internet will already be gearing up to see how secure any new system is, what the new processes are and how familiar staff are with the systems and processes,” he says. “It will be essential to build in adequate checks before a claim is paid.”

CIFAS has a database of 300,000 fraud cases which it provides to members so they can watch out for fraudsters. But the public sector has been slow to get on board: currently, only one public sector body – the Legal Services Commission – is a member. The LSC uses the system to check whether false or inaccurate information has been provided in the past by legal aid claimants or providers. But a spokesman for CIFAS confirms that three more public bodies are in talks about joining, and adds that departments are looking into using credit reference agency checks and data owned by the private sector. (It could be politically troublesome if government has to share its own data with the private sector, however.)

Another concern is that of access to the new services – not everyone is able to access the internet or use a computer. The latest figures from the Office of National Statistics show that 9.2m adults have never used the internet, of which 4m are from the most disadvantaged groups in society: 39 per cent of the total are over 65; 38 per cent are unemployed; and 19 per cent are families with children.

A Cabinet Office spokesperson told CSWthat while “the government is committed to moving more quickly to digital delivery of government information and transactions”, it is “currently working with Martha Lane Fox, the UK digital champion, on her proposals to improve the way we deliver online services”. Lane Fox is the government’s digital inclusion champion and heads up an organisation called Race 2012 Online. In an interview with CSW earlier this year, Lane Fox said that she has “big scary targets”, and that by 2012: “We’d like no families to be without internet access; no unemployed people should be unable to use the web; and 60 per cent of over-65-year-olds should be able to use the web.” The government is also seeking to offset digital worries by using more digital telephony and by providing a range of services at post offices.

What happens to traditional channels?

One of the most effective ways to encourage migration to new services is simply to close traditional access points. The cabinet secretary has been raising this possibility for most of two years, and Maude said recently to CSW: “If we’re going to do this channel shift, we’ll have to be much more aggressive in closing down other channels.” Dr Martin Read, an ERG board member, has also told CSW in an interview (see news, p3 and interview, p19) that some departments have “already got the internet channel but nobody’s making the effort to turn other channels off”.

“For a lot of this stuff, we’ve also got a telephone channel and an over-the-counter channel,” he added. “If you could switch the over-the-counter channel off – or at least minimise it – and really ramp down on the telephone work, you’d be saving lots of money; and that’s with [online] channels that already exist.”

There are some obvious possible objections.The general secretary of the PCS trade union, Mark Serwotka, is worried about the job losses entailed in channel shift. “For many government functions, either because of their complexity or sensitivity, there is no substitute for face-to-face contact and we have deep concerns about plans to reduce this further, as services to the public will inevitably suffer,” he says. “It has been proved time and again that IT is not always the cheapest or most effective solution to running government services. We’ve seen recently in HMRC how the new computer system has added to the problems caused by cutting jobs and closing offices.”

More fundamentally, closing channels risks disenfranchising users who are unable or unwilling to adapt. But this is a challenge rather than an insurmountable obstacle: done well, channel shift strategies should provide better services for the majority, while freeing up resources to offer more support for those who need it. So the government has set out the opportunities; it is now up to civil servants to ensure that the strategy works as well for users as it does for service providers and finance directors.

Case Study: Insolvency Service

Analysing the people who go bankrupt, the Insolvency Service identified a group of indebted, private individuals who – according to chief executive Stephen Speed (see interview, p6) – are “very unlikely to be causing harm in the economy”, and developed a brand new online service offering ‘Debt Relief Orders’ (DROs): a cheap, fast form of bankruptcy.

With this group, the service has accepted a higher level of risk than it would with individuals involved in bigger or more complex financial deals, and brought in external partners – including the Citizens’ Advice Bureau and the National Debt Line – to advise individuals on the use of DROs and walk them through the web-based application process. The service “takes the process out of the courts and deals with it quickly and cheaply”, says Speed, noting that the system is entirely electronic and involves almost no paperwork for the Insolvency Service.

DRO applications are subjected to six automated checks, using external providers such as credit reference agency Experien, and those given the ‘green light’ can be approved by the Insolvency Service immediately. Using this simple process and external partners, the Insolvency Service is able to charge just £90 (it normally charges the estate of a bankrupt individual £1715, covering the extensive costs of the much more involved full bankruptcy process).
The system is “180 degrees different” from the service’s traditional approach, says Speed, “in terms of the risk we’re prepared to take; in building an intermediary community and training them to work in a space they know well; in providing a really straightforward IT system which allows the order to be made in minutes.” For him, it represents the future: “That’s the model we’d like to take out into the public service aspects of what we do.”