The Scottish Government could be facing a public spending shortfall of £27 billion over the next seven years, more than 20 times greater than estimates from the Scottish Fiscal Commission, according to a new report from the National Institute of Economic and Social Research (NIESR) and Sopra Steria.
The report, titled Light at The End of The Fiscal Tunnel? looks the impact of austerity on Scotland and follows a UK-wide report from NEISR, which identified a £300 billion public sector spending gap.
The research warns that the cost of Brexit combined with a societal ‘austerity fatigue’ and demographic pressures, such as an ageing population, will create an increasing gap between Scotland’s growing needs from the public purse, and what public services will be actually able to deliver in the near future.
Government for the Amazon Generation
Rather than focus on increasing public debt, which would ‘break the fiscal rules’ in terms of the amount of debt allowed as a percentage of GDP, the paper argues that improving the efficiency of public services, to enable more to be achieved for less money.
Sopra Steria’s new strategy for government will focus on finding these efficiencies and enabling the country to provide improved customer-focused public services while reducing costs.
At a launch event in the company’s Edinburgh HQ yesterday, Sopra Steria provided more insight into the rationale behind the strategy and the organisation’s belief that digital technology can be an enabler of radical transformation for public services.
Adrian Fieldhouse, director for government, used well-known online services, such as Netflix and Amazon, as examples of innovation and how the introduction of new business models, revenue streams and accessibility, could change how citizens access and pay for public sector services.
Mr Fieldhouse focused on the question of what citizens actually want from government and public services, and how the expectations of users have changed in the era of Amazon Prime and online services.
Pay for Convenience
As an example of where costs can be saved and new revenue streams introduced, Mr Fieldhouse cited Sopra Steria’s company’s recent work with UK Visas & Immigration (UKVI). Visa applicants can use the basic levels of service, which are provided free, but can additionally pay a small amount for increased convenience or expediting services
The key, said Mr Fieldhouse, is to focus on the outcomes. In a world in which the evolution of technology is increasing, the idea of 10 year contracts to provide any sort of service becomes nonsensical. Scotland’s CivTech programme, which was created disrupt public sector procure by asking the question: How do you procure what you don’t know exists?
Scotland’s role as a pioneer in disruptive and transformative use of technology was also praised by the panel at the end of the event, with CivTech and CodeClan both being singled out as leading examples of driving change.
A Colleague, not a Vendor
Sopra Steria’s goal, with its new strategy, is to be a part of that ecosystem, ‘a colleague’ rather than a vendor. As part of this internal transformation one of Sopra Steria’s Scottish Regional Director Alison McLaughlin, has been seconded to a Digital Fellowship Programme being run out of the Scottish Government’s Digital Directorate.
According to Mags Moore, Sopra Steria’s new head of government for Scotland and Northern Ireland, the idea of ‘creative destruction’ will be a key part of many conversations moving forward. While the public sector may not relish having the ‘ugly conversations’ about disruption and transformation, the reality of the spending means they will have to be pushed forward.
Adrian Fieldhouse, told DIGIT:
“This research shows that government continues to face a significant challenge as it attempts to modernise and transform public services whilst tightly managing public spending. Without hiking public sector spending, we need to consider other, viable alternatives, including the use of transformational techniques to meet the fiscal challenges.
“We have shown this is possible through the recent UKVI announcement – which is a great example of a service designed with the end user in mind. If we don’t pursue different outcomes, then our public services may face an untenable situation, where they cannot deliver services in the way they have always done. Simply because, the public purse won’t sustain it.”
Mags Moore, the new Head of Government for Scotland and Northern Ireland at Sopra Steria, added:
“Scotland is a key market for Sopra Steria and we are excited to embrace a new direction that will see us continue and strengthen our close work with the public sector in Scotland through supporting digital opportunities to drive change.
“We plan to take this research and continue to build on it – this isn’t about creating problems, it’s about coming up with solutions. We’ve often said that we have ‘skin in the game’, and this is particularly true in Scotland. Programmes like Digital Leaders and SOCITM are living proof that we take this commitment seriously, and I look forward to leading the new government strategy in Scotland.”
The full Light at The End of The Fiscal Tunnel report, which outlines the public spending pressures in Scotland, can be read online.