Local Government – Rising to the digital challenge

Councils aren't short of challenges at the moment, but rising to the digital challenge is an opportunity they can't afford to ignore, both to make financial savings and to stay relevant in a digital age, says PwC's Jonathan House.

Digital has already had a significant impact on local government – and the pace of change only looks set to quicken. What was emerging technology not long ago – social, mobile, analytics and cloud – is now everyday, with the next round of innovation always on the horizon. This rapid cycle is having a significant impact on the newer generations of consumers who expect ever-more accessible, portable, flexible and personalised services and experiences. So, how can local authorities respond?

Many councils are already using digital technology to transform services, moving to self-service and automation where possible. Automated intelligence can provide basic decision-making and online and telephone-based support, with minimal staff intervention, and also deliver welcome efficiency savings for councils who have long exhausted traditional avenues for reductions. PwC's annual local government survey – the Local State We're In – shows that 60 per cent of chief executives and 70 per cent of leaders are confident that their council is fully embracing the opportunity digital offers. Yet ask the public the same question and only 28 per cent agree.

Part of the issue may be that too many councils, while perhaps reaping the benefits of limited investment in digital to deliver savings, are not yet embracing digital in its broader sense. The digital opportunity for local government extends well beyond shifting transactions and information online and needs to be embedded throughout the organisation. As we put it, councils do not need a digital strategy; they need a business strategy for a digital age.

The Management Consultancies Association (MCA) Think Tank report, Local Government: Time for Reinvention, highlights the impact taking advantage of digital technologies is having at a London borough PwC is working with. By redefining the way the council works and embedding digital technologies and thinking, the authority has been able to reduce its operating costs, while also enabling frontline service delivery to be improved through digital portals enabling self-service, automation of service requests and also community self-support.

Digital is a key enabler for fostering a new relationship between citizen and council, and for fostering relationships between citizens and enabling them to achieve outcomes without the active intervention of the council. Digital approaches, for example community hubs and social listening, can provide customers with greater independence, allowing them to manage their own information and access to services, enabling a more personalised relationship with their council, as well as contributing to savings. 

For the council, having an integrated view of service users and assets can provide powerful business intelligence. With tough choices to be made in the years ahead, having that evidence that shows the relationship between inputs, outcomes and impact is essential. Data analytics and business intelligence will be critical for councils as they translate new priorities into smarter interventions, choices and working.

While much of the data that is needed already exists, it is often held in separate departments or separate organisations. Data needs to be integrated across organisations for it to be meaningfully used in order to measure impact and outcomes on a multi-organisational basis across an area. Using data in this way means councils move beyond managing demand via introducing multiple service points towards an outcome-based approach, rooted in prevention and early intervention across a whole place.

Few councils today have the capability they need to translate the data they hold into the insight that is needed to underpin decision making. While half of PwC's survey respondents said they currently use data analytics to underpin their decision making and strategy, only around a third of chief executives agree their council has the capability it needs in this area.

Developing skills and investing in capability in digital and data analytics must be an urgent requirement for local authorities if they're to fully reap the opportunities that digital and data offer.  Delivering transformation on the scale needed requires strategic vision and leadership to ensure digital thinking is fully embraced by leadership, the workforce and the community. 

But with local government austerity looking set to continue well into the next parliament, alongside rising demand and expectations, the digital challenge is one every council must rise to.

Originally featured on Local Government Executive.

Jonathan House is a director at PwC.