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By | Kat Hall 16th October 2015 09:58

So, GDS saved Brits £1.7bn through 'digital transformation'. Sure about that?

NAO says no, for one

Analysis Claims that the Government Digital Services saved the taxpayer £1.7bn during the last Parliament through "digital transformation" have been repeated so frequently of late, it seems the figure will go down as the main business case for the body's existence over the last Parliament.

This is particularly true with the exodus of the GDS top brass following Mike Bracken's departure, amid rumours that spend on the body is being slashed.

No recent summary of the GDS in both national and trade publications has been complete without mention of this stat. And in fact this week it was wheeled out again during a debate involving much hand-wringing on the future of digital in government and whether GDS will be cut.

"During the last Parliament £1.7bn was saved thanks to digital transformation and the Government Digital Service cost £58m. This is therefore a very good return on investment," said Lord Bridges of Headley.

It's hard to argue with that number - except for the unfortunate fact it is not actually true.

Julian McCrae, deputy director of the Institute for Government, a charity working to increase government effectiveness, said: "The claim that money has been saved money from digital transformation is just not true. Relatively little transformation is coming through there."

The National Audit Office has also said there is "little evidence" of savings through digital channel shift (PDF).

The figure of £1.7bn originates from the Cabinet Office's efficiency savings for the last Parliament, which were released two months ago. In total the department claimed £18.6bn in savings through various areas, such as cancelling infrastructure projects and flogging off property.

Those figures were internally audited (PDF) by the government's audit office to rate the credibility of each cost saving area. However, the £1.7bn number just appears in the press release rather than the audited breakdown.

The only specific mention of GDS in the audit are for savings of £103m for its Public Services Network (PSN) telecommunications and hosting, £105m for GDS transformation, which includes £61m for the cost of shutting down websites and £36m savings by providing the department for Work and Pensions with a cheaper identity assurance tool (albeit one that is yet to work).

The biggest saving mentioned is £391m in spend controls, essentially not allowing departments to spend a lot of money on stupid projects. That leaves an outstanding figure of £1.1bn unaccounted for in the cost saving claims.

McCrae said the unaudited use of this number was "not particularly transparent".

However, he said it is likely the rest of that figure has been derived from other areas such as cancelling IT projects and renegotiating contracts. "They will have some private rationale for that figure, my guess is it will be within some of those other work stream areas."

To be entirely fair to the Cabinet Office, the exact wording of its press release is saving "from digital and technology related activities." [Italics added].

But the point is that saving is being repositioned as something that has occurred due to digital transformation - suggesting digital services have taken out significant costs of government. The only instance where that seems to be true is the saving of £61m by running fewer websites.

That is quite a significant shortfall in the original promise to save £1.2bn by "digitising" public services before 2015, and £1.7bn per year after 2015 by moving to digital transactions.

Most commentators feel that some sort of central body is required to set standards and provide project assurance (and when you look at the figures, real savings have been made by the controls process). McCrae notes the "absolute disastrous model of the past, where everything was outsourced - including the ability to commission, too."

The point is that nearly five years on, the promise of digital services "so good people prefer to use them" has not been delivered. And that is something that ought to be taken into account when assessing what the GDS' future should looks like, and whether 700 staff and a budget of £58m is needed. Pretending otherwise will not help anyone. ®

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