Tag: 2014

Below is the text of the speech on the Open Government Partnership made by Francis Maude, the Cabinet Office Minister, in Paris on 24th April 2014.

It’s a great privilege to speak here in Paris about open data and transparency.

And it’s a particular pleasure to be the first to welcome Minister Lebranchu’s announcement that France is joining the Open Government Partnership (OPG). This is a major step forward for the OGP and one that we see as important to the long term viability of this growing but still fragile organisation.

We now have all but 1 of the group of 7 nations as members or committed on the path to membership. It’s no secret that I very much hope that that we can soon welcome an announcement of an intention to join OGP from the remaining great global economy, whose voice has so far been absent around the table.

Last year I was here in Paris and met with Minister Lebranchu to discuss a different area of our common responsibilities – civil service reform. Her insights, and those of her officials, were a powerful influence on the development of our programme of Whitehall reform. I also had a stimulating discussion with the team at Etelab and then met with the then Minister for SMEs, Innovation and Digital Economy, the impressive Madame Fleur Pellerin. And in October we welcomed the French team to London at our OGP summit.

I look forward to building on our legacy of cooperation and co-working. As close allies and close neighbours who share so much, there’s a great deal we can achieve together. France I suspect will come to play a central role in the global movement for transparency and I hope it’s not too long before we will be welcomed back in this amazing city for an OGP summit meeting.

To paraphrase a great Parisian, Victor Hugo, nothing is more powerful than an idea whose time has come. And transparency is an idea whose time has definitively come. In the past 2 and a half years, OGP has developed in a way that is little short of overwhelming. Starting with just 8 members in 2011, there are now 64 of us – embracing a third of the world’s population.

We’re all at different places along the path to greater openness, but we come together so we can support and learn from one another. I’m delighted France is now part of this. I know there is much we can learn from your experience.

From Australia to Ukraine, Bulgaria to Sierra Leone, Chile to Tunisia, OGP is spreading the message that transparency is a friend of the reformer.

And it’s vitally important that this message is heard by those countries that have gone through the biggest changes – and so the world can see that openness is a path to democracy and stability and prosperity. It’s also crucial that openness is baked in to the very fabric of government.

Attitudes to openness

In the UK we have a Frenchman to thank for our first ever exploration of the power of data collection.

After the Norman invasion of 1066, William the Conqueror – as he’s known on our side of La Manche – sent his emissaries to every corner of England to assess the value of property and livestock held by each landowner.

William’s Domesday Book was about consolidating information – and by extension power and wealth – in the hands of the privileged elite. And that set the pattern for most of what followed.

Governments have tended to hoard information. It was kept under lock and key, away from sight: never open; never shared; never scrutinised.

But in the 21st century, those in power can no longer take such an approach.

The networked, decentralised spirit of the internet age has started to permeate how we work, how we socialise and how we think. Technology has revolutionised the relationship between citizens and the state; it should both compel and empower governments to work in new ways.

Even the Domesday Book is now freely available online as open data.

At the same time, governments around the world are wrestling with how to respond to long term demographic and economic challenges, and rising public expectations.

In the UK – and throughout Europe – austerity in public finances will be a fact of life for some years to come. I recently met with an energetic selection of my counterparts in Madrid, including Minister Lebranchu, to discuss these very challenges. There will continue to be pressure on governments – of all political colours – to deliver more for less. Two paths are possible: the low road of salami slicing departmental budgets to impose top-down savings; and the high road of redesigning public services from the bottom up. Governments owe it to the public to take the high road. And that calls for a complete transformation of how we design and deliver public services and how we interact with citizens. And transparency needs to be central to that transformation.

5 principles for public sector reform

Our thinking in the UK led me to propose 5 principles for public service reform to help us meet these challenges. To be frank, we didn’t start out with these ideas. I come from the JFDI school of government – Just Do It. And just doing it has worked in the UK. For the first time ever we have secured real folding-money efficiency savings – an unprecedented £10 billion from central government in 2012 to 2013, the last year for which we have audited figures.

Out of this action we’ve started to distill some theory. And that’s these 5 ideas:

The first is tight control from the centre over common activities – such as property, IT and procurement – because this reduces costs and encourages collaborative working. This accounts for the lion’s share of the efficiency savings we made in the UK last year.

The second principle is looser control over operations: shifting power away from the centre and diversifying the range of public service providers. We strongly support staff-owned mutuals, joint ventures and social enterprises which raise productivity, improves services and cuts costs. These are alternatives to red-blooded privatisation and empower the very people who know best how to drive up standards.

Third, we need a properly innovative culture, so public servants have permission to try sensible new ideas, moving away from the risk aversion that has tended to hold back progress. I’ve seen for myself how Californian ideas such as ‘move fast and break things’ or the Israeli start up culture of failing – but failing fast and learning from it – underpin a truly creative environment.

An innovative culture means listening to different and non-traditional voices when making policy. One of the great things about the Open Government Partnership is it allows government and civil society to sit around the same table and learn from one another.

Fourth, digital by default. If a service can be delivered online, then it should only be delivered online, because as well as being cheaper, online services can be faster, simpler and more convenient for the public to use.

And the fifth principle – the most directly relevant to OGP – is openness. Because being transparent and publishing open data makes government more accountable to citizens and strengthens our democracy; it informs choice over public services; and it feeds economic and social growth.

Accountability

Too often, transparency is a fair weather friend. In opposition all politicians think transparency is a great idea. When they come to power they continue to think it’s a great idea for the first 12 months while all they’re doing is exposing what their predecessors did. And then they tend to get less keen.

But transparency shouldn’t be an optional extra, an add-on, or something that’s ‘nice to have’: it’s a fundamental part of good governance.

People should be able to see the inner workings of their government – after all, it’s supposed to work in their interests and act in their name.

Equally, taxpayers have a right to see where and how their money is spent.

And ultimately, public data belongs to the citizen, not the state.

It’s why in the UK we now publish all central governmental spending over £25,000. We also publish Quarterly Data Summaries to give a snapshot of how each of our departments spends their budget and they use their workforce.

And we publish all government contracts over £10,000 on our Contracts Finder website.

Of course, transparency can be very uncomfortable for governments where it exposes waste or highlights failure. But you can’t just cherry-pick the bits you want to be transparent about. It has to be all or nothing, otherwise it doesn’t work.

Because if you’re open about problems as they arise and you tell people when things go wrong, then they’re far more inclined to believe you when things are working and you want to talk about your achievements. Over time, being open builds trust.

This is the experience we had in the UK when we decided to publish assessments of the progress of our major projects, everything from new railways to transforming welfare.

When we first suggested including ‘traffic light’ ratings – red, amber, green status updates – some inside government were horrified. To be honest; some still are.

And, for sure, there were a number of bad headlines to begin with – but, when the dust settled, actually we got quite a few plaudits. People could see we meant what we said when we talked about being transparent and ultimately we got the credit for being open.

Open data

But transparency isn’t just a noble concept. It’s a practical tool for improving public services – delivering measureable results for citizens and for taxpayers.

Better performance information can help you to see where to save. Mastodon C is an example of a big data start-up company, incubated at our Open Data Institute and working with Open Health Care UK. By using prescription data from across England, variations in spending on different classes of drugs can be identified. It is then possible to calculate the potential savings to be achieved by moving from prescribing branded drugs to generic drugs. From statins alone, we could save around £200 million per year. When extended to all classes of drugs, the total potential savings could amount to £1.4 billion per year.

Similarly, transparency leaves no hiding place for failure. The release of NHS heart surgery performance data, for instance, has helped bring about dramatic improvements in survival rates.

But there is something more fundamental at work. Because giving people more information is another way of giving them more control. Transparency is about putting people in charge of the services they use and giving them a greater role and a louder voice in deciding what’s best for them.

Publishing exam results lets parents see whether their local school is improving so they can make the right choice for their children.

And publishing local crime statistics helps homebuyers to decide which neighborhood to move to – and empowers communities to demand more from their local police forces.

It’s a chance to create truly 21st century services, responsive to people’s individual needs and delivered in a way that’s convenient to them.

Over the last 4 years, the UK government has committed to release more and more public data to give our citizens real choice over their public services.

Our web portal, Data.gov.uk, is to transparency what the Louvre is to art. There are over 14,000 data sets there already, it’s the largest resource of its kind in the world, and more information is being added all the time.

Growth

On this scale, open data can be a raw material for economic growth – just like iron and coal were to the industrial revolution. It supports the creation of new markets and jobs – businesses of the future, which can help deliver lasting growth.

Every day more and more data is being generated, while new types of computing power give the ability to reap its true value. McKinsey has said that across Europe data could be worth £250 billion – the EU says £140 billion. Either way it’s an eye-watering amount. And to think – all this time governments had data sitting unused, when it could have been stimulating economic growth and innovation, or scientific research.

So we launched our Open Data Institute, to incubate new start-up companies that could use this data as a raw material.

The Open Data Institute, started in London by Sir Tim Berners-Lee and Sir Nigel Shadbolt, is now operating here in Paris too. It’s a great example of how much we can do together. By operating across different countries, it can unlock the best supplies of data, generate demand and enhance our knowledge of its potential to address common issues.

We also set out our commitment to a ‘right to data’.

Our default presumption is that everything should be published as a matter of course – there must be a compelling reason to withhold it.

It’s easy to be open about things that don’t really matter. But what really counts is being open about the things that do matter and releasing the information that people and organisations want to have so it can cultivate new enterprises and new jobs.

Through the Open Data User Group, individuals and businesses can request data to be released as open data. And many government departments now have dedicated transparency sector boards of their own, which challenge them to publish more data.

I know that France too is setting an example to other nations when it comes to making public sector data available.

The French government’s new open data platform, launched in December, represents a radical – and to date unique – direction for government data portals. It has been designed to publish submissions and contributions from anyone, not just from central government but from corporations, citizens and non-profit organisations too. This is a real rallying cry in terms of citizen engagement and encouraging others to enhance their efforts. It’s innovative, it’s exciting and I look forward to following its progress.

Last year, the governments of the then G8 came together under the UK Presidency to agree a landmark Open Data Charter – once again, the role of France in the development of this was crucial and your eagerness to stretch the ambition of this work enabled us to set strong principles for the release and re-use of data and for its accessibility. These principles on openness are a critical element in encouraging growth and ensuring consistency, helping governments and businesses to operate more closely together. I hope to see this adopted across the world and know many of you here share that ambition.

Conclusion

So, in conclusion, openness is not a soft option. It takes governments out of their normal comfort zone and requires tough decisions.

Countries like the UK and France have made a meaningful commitment to transparency through the Open Government Partnership.

It doesn’t mean following a set of absolute standards. Transparency means different things to different countries and each must find its own path.

It’s a trajectory – it’s about demonstrable progress toward greater openness, and, ultimately, better government and greater prosperity. And once you start on that path, it becomes an unstoppable and irreversible journey.

I’ve said it before and I’ll say it again: transparency is an idea whose time has come.

Thank you.

Below is the text of the speech made by Francis Maude, the Cabinet Office Minister, to the Oakeshott Memorial Lecture on 25th March 2014.

Introduction

It’s a great privilege and a pleasure to be invited to deliver this lecture today and to be a guest of the Employee Ownership Association and really a genuine honour to deliver the 2014 Robert Oakeshott Memorial Lecture.

It’s great to see representatives from John Lewis, Arup, Gripple, and some of the other amazing private sector success stories here today.

It’s also a pleasure to be at the ICAEW, itself a mutual albeit a membership mutual rather than a staff one. But a great deal of symmetry.

Robert Oakeshott lived through one of the most polarised eras in political history, yet his own place in that order was never a fixed one. His party political affiliations were broadly with the centre-left but he wrote widely, and his writings found expression across the pages of the Spectator, the Economist and the Financial Times.

Independent-minded, he was a man of very strong beliefs. Today his name has become synonymous with this cause above all others – the cause of employee ownership.

Historically, employee ownership has never really had a fixed ideological abode: it was often shunned by the left because of their dogmatic commitment to state ownership; down-played by the right in favour of what some saw as classic red-blooded capitalism.

I was remembering just last week when reading Tony Benn’s obituaries how in the 1970s he tried to save three companies by turning them into workers’ cooperatives, notably the Triumph motorcycle works at Meriden. It was an experiment really in syndicalist industrial reorganisation; and the failure of those ventures I think set back the cause of employee ownership and cooperatives by some years.

Public sector productivity

So how does all of this bear on the reform of public services? In 2010 when the coalition government was formed we faced a public service crisis. We faced the biggest budget deficit in the developed world; we faced rising public expectations relating to the quality of services; and we faced a stagnant economy.

Between 1997 and 2010, according to the Office for National Statistics, productivity in the public sector flat-lined. Yet in the private services sector – the nearest equivalent – over the same period productivity rose by nearly 30%. Even a back of the envelope analysis suggests that if productivity had risen by the same amount in the public sector, the annual deficit could have been at least a quarter smaller – probably much more – a cut of around £50 billion; or the economy larger by a minimum of £2,000 for every household. However you calculate it, the absolutely inescapable conclusion is that our economic and fiscal position would have been radically different.

So how do we drive up productivity in the public sector? There have been plenty over the years who didn’t believe you could. As a Treasury Minister in the early 1990s, I was charged with developing the Citizen’s Charter, an early programme concerned with the systematic improvement of public services. I faced what felt like a tacit conspiracy of defeatism. The Treasury struggled with the idea that services could be improved without departments constantly demanding more money. And departments themselves, faced with demands for better quality, entirely predictably confirmed the Treasury’s gloomy prognosis by – yes – demanding more money.

Absent from both sides was any recognition that productivity could be improved; that more could be achieved for the same amount; that the same could be achieved for less money; least of all the proposition that we are now amply proving on a monthly basis: that you can deliver more for less. This was the defeatist consensus that has held back public services for too long.

That approach reached its nadir in the last decade. The NHS budget more than doubled, but productivity if anything deteriorated. The apparent age of plenty seemed to have relieved the public sector of the need to be creative. And then suddenly one morning there was no money. As sir Ernest Rutherford famously is alleged to have said: “We’ve run out of money. Now we must think”.

Public service reform – 5 principles

Our thinking led us to propose public service reform which has followed 5 principles.

The first of those principles is openness, because transparency sharpens accountability, improves choice for the public, and it raises standards. So first, openness.

Second, digital by default. If a service can be delivered online, then it should only be delivered online because as well as being an order of magnitude cheaper – 30 times less than by post and 50 times less expensive than face to face – services delivered online can be faster, simpler and more convenient for the public to use. So second principle is digital by default.

Third, a properly innovative culture, so public servants have permission to try sensible new ideas, moving away from the risk aversion that has tended to hold back progress.

Fourth, tight control from the centre over common activities – like property, IT and procurement – because it reduces costs and encourages collaborative working. These tight central controls account for two thirds of the £10 billion we saved for the taxpayer just last year in central government spending alone.

The fifth principle is loose control over operations, which is where employee ownership steps in. The people who know best how to deliver public services best aren’t the politicians in Westminster or the bureaucrats in Whitehall and in town halls, but the professionals working on the frontline. Tight control over the centre must be matched by much looser control over operations.

Opening up public services

For too long, delivery of public services has been shackled by a top-down, Whitehall-knows-best attitude. Public sector workers were left feeling alienated: dispossessed from effective control over their ability to shape the services they had responsibility for delivering.

Too often there seemed to be a binary choice: either the public sector as a bureaucratic in-house monopoly provider; or on the other hand, full-blown red-blooded commercial privatisation or outsourcing.

Happily, that’s changed and there are now alternatives. Social enterprises. Joint ventures. Voluntary and charitable organisations. And, of course, public service mutuals.

And it’s this last – public service mutuals – that is the fastest growing alternative, which is arousing most interest among governments abroad and which will I believe will increasingly be the way of the future.

Creating a new sector

Why? Because creating a mutual releases creative energy and entrepreneurialism. And that’s the problem many critics have with this programme. They either don’t believe entrepreneurs exist in the public sector. That it’s solely the domain of stuffy bureaucrats. Or they don’t think entrepreneurialism should be allowed to mix with the public service ethos, lest it contaminates the purity of this ethos. Both I believe are wrong. There are loads of latent entrepreneurs in the public sector. They may not think of themselves as entrepreneurs, but they have all of that spirit of enterprise, the willingness to back their ideas, and invest their energy and creativity to make things happen.

It doesn’t mean they all want to be Branson-type millionaires and billionaires. In most spinouts the staff themselves have chosen that the entity should be a not-for-profit company or organisation. They didn’t need to make that choice – they would have had the opportunity to make it a for-profit organisation – but for the most part that’s the choice they made.

Yes you can get improved productivity through conventional outsourcing. That will often be the right option to take. But rarely in my experience does it deliver the almost overnight improvement that mutualisation can stimulate.

The last government started down the path of mutualisation. But their approach was in my view and that of others, too top-down, too prescriptive and bureaucratic; and resulted in no more than a handful of new mutuals.

I decided against this approach. And I want to do something at this stage that ministers too rarely do which is to pay a tribute to the civil servants who worked with me on this programme during this period led by Rannia Leontaridi. This is a team of officials who have been creative, dedicated, incredibly hard working, incredibly effective in making things happen. So I’d like to say a very big thank you to you Rannia and all of your team who have supported me during this programme. So we decided against the top-down approach. So there was no White Paper; no all-encompassing strategy; no big bang media launch. It was what I know think of as the JFDI school of government – the just do it school of government. We didn’t start with the theory and move on to the practice. We did it the other way round. We decided we’d find a hundred flowers and build a hothouse around them so they can bloom and grow.

So the first thing was to identify groups of workers who wanted to spin out from the public sector. As Pathfinders, we gave intensive support to these organisations, who in return shared their experiences with us and with others. Many of these Pathfinders are now among the country’s best performing mutuals.

Next, we made £10 million available through our Mutual Support Programme. It’s not a lot of money – I know that. But we’ve made it go a really long way. The funding isn’t allocated directly. Instead it’s used to build the capability of these new businesses – as that’s what they are – through professional expertise and advice. That’s the way the government can negotiate the best deal and, over time, we’ve built up a valuable set of tools and templates which upcoming spinouts can access and draw upon for free.

And there’s no “one size fits all” approach, no one size fits all format. Some mutuals are conventional companies; some are companies limited by guarantee; some are community interest companies; some choose to be charities. Some have 100% employee ownership; but to qualify there must be no less than 25% employee ownership so that staff can exercise at least negative control over the entity. So there’s a whole spectrum of different models available, and each group must select the right course for their particular horse. Each spinout is a journey for and by its own staff. They’re the ones in the driving seat, leading the change.

Progress so far

And our approach is working.

4 years after the last general election, the number of mutuals has increased tenfold to nearly 100. Between them they employ over 35,000 people, delivering around £1.5 billion worth of services. They’re in sectors ranging from libraries and elderly social care to mental health services and school support. They range in size from a handful of staff to upwards of 2000 staff.

Neither is this confined to any one region – it’s certainly not a London niche – it’s a national success story. The map of mutuals shows them spread across Britain. The results are spectacular. Waste and costs down. Staff satisfaction up. Absenteeism – a key test or morale and productivity – is falling and falling sharply. Business growing.

Staff engagement surveys bear out the simple truth that service improves and productivity rises when the staff have a stake; when they feel they belong; and that their individual voice and actions count.

Our latest data shows that after an organisation spins out as a mutual absenteeism falls by 20%; staff turnover falls by 16%. Take City Healthcare Partnership based in Hull as an example. 91% of staff said they now feel trusted to do their jobs – and this level of empowerment has had a knock-on effect in the quality of care they give. Since they left the NHS in 2010, there has been a 14% increase in patients who’ve rated their care and support as excellent, and 92% say they would recommend the service to family and friends.

No wonder City Healthcare came 46th in the Times 2014 Top 100 Not for Profit Companies to work for.

At SEQOL in Swindon, a groundbreaking mutual formed by integrating in one entity intermediate healthcare activities from the PCT with some social care activity from the council, staff proudly showed me the stockroom, where a nurse had painstakingly attached stickers with the unit price of each item. “Why did you do that?” I asked the nurse showing me round. “To make us more aware of the cost so we could save money”, was the response. “But why?” I persisted. “You’re a not for profit organisation and none of you will benefit financially from the savings you make”. “No. But every pound we save makes us more competitive. And it’s a pound we can put straight back into better patient care”.

And that’s the point. There’s absolutely nothing wrong with better financial reward for public servants. But it’s not the biggest driver of better productivity. It’s the satisfaction people get from putting their ideas into action, and seeing swift results. It’s the sense of pride that it’s their organisation that is delivering the service. That they can make improvements quickly, taking responsibility for making things happen, without new ideas getting bogged down in bureaucratic treacle. Just looking at the Baxendale Awards for Employee Owned Businesses this year, you can see the spinouts dominating the innovation category. So in a mutual, public servants can give effect to their public service ethos with immediate and gratifying speed.

Whenever I visit a mutual – which I do a lot, it’s a drug, it’s addictive – I always ask the same question of staff: “Would you go back to work for the council/health authority/ministry?”

The answer is always “No”. “Why not?” “Because in a mutual we can do things”.

That’s the essence of it. People can see how things can be done better and do it. They can give effect and take responsibility and pride for making things happen. People typically say they are working harder than they were but they are enjoying it more, it’s more rewarding, more fulfilling. That’s why I think the public service mutual is the way of the future.

Growth

Of course, the public service ethos remains front and centre. But it doesn’t have to be at the expense of strong commercial instinct.

Spinouts are winning new business – and winning new business fast. A study from Boston Consulting Group projects an average increase in revenues of 10% this year.

MyCSP, which is responsible for administering the Civil Service Pension Scheme, was the first mutual joint venture to spin out from central government. Under its contract the cost of the service to the taxpayer will halve over eight years. The private sector partner has taken on the transformation and IT costs that would otherwise have fallen to the Exchequer. Under its innovative equity structure, the Government retains a 35% stake. The staff, with a 25% stake, all received a first year dividend of nearly £700. And in its first year of operation it gained 47 new clients. This is a growth business.

Social AdVentures in Salford saw a growth in revenues last year of no less than 262%.

3BM in London increased their business by over 25% in their first year as a mutual.

Since spinning out in July 2011 – in the middle of the economic downturn – Allied Health Professionals in Suffolk has increased its number of staff from 63 to around 100; its turnover from just over £2 million to £3 million – all on the back of winning new contracts.

And in Norfolk, East Coast Community Healthcare’s first year profit was 40% ahead of plans.

The point is that each of these new mutuals represents a new and dynamic enterprise in the market economy. They are all incentivised one way or another to improve and grow. They all strengthen the market for their services and they make the market deeper, wider and more competitive. And as we have seen all too clearly in the last year, public service commissioners had become too dependent in too many areas on too limited a range of suppliers. Every new mutual helps to remedy that deficiency to improve the depth and dynamism of the market.

Argument

So – cutting costs; improving quality; supporting economic growth and jobs: what’s not to like about all that?

I had a really interesting experience recently when successfully negotiating in the European Parliament some much needed changes to EU public procurement rules. We wanted to have a provision that would shield future new public service mutuals from the immediate full panoply of EU regulations while they established themselves as businesses. We had brilliant support from British Conservative and Liberal MEPs. But beyond them? Well, the Socialists thought that it was promoting privatisation by the back door. And some on the centre-right thought it was a scandalous erosion of the pure milk of the competitive free market.

Well let’s examine both contentions. Is mutualisation equivalent to privatisation? Technically yes. Mutuals are spinouts from the public sector into the private or social sectors so they get classified as non-public sector. It’s certainly not privatisation by the back door though. It’s as open a process as you could want.

On the other hand does mutualisation by negotiation frustrate competition? Well actually not at all. It promotes it. It opens it up a broader hybrid economy with a wider range of suppliers – there’s a place for mutual spinouts, joint ventures and charities and voluntary organisations, alongside private companies and the public sector. So it’s just worth asking ourselves why is such a small proportion of public service delivered by suppliers outside the public sector? Because I think part of it is conventional outsourcing and privatisation is fraught with political and industrial relations risk. It can look ideological and dogmatic, and can arouse the hostility of the staff. It makes managers anxious because of the fear that the contract will be overpriced leading to excess profits and uncomfortable hearings at the Public Accounts Committee.

But mutualisation can square all these circles. If it is driven by the staff and is a not-for-profit then where’s the problem? And if it’s for profit then why not keep a stake for the state? Then the taxpayer benefits along with the staff and managers. And often the alternative to a mutual joint venture is a straight outsourcing. And I don’t come across many public servants who, if their operation is going to move out of the public sector, wouldn’t prefer themselves to have a stake and some control over the new entity.

So for the staff it can feel like a lower risk alternative to straight privatisation and for managers a way of harvesting productivity gains without the downside of immediate competition. Because in nearly all situations, a negotiated spinout into a mutual or mutual joint venture must be followed after a few years by an unfettered competition, where the mutual will have the advantage of a track record and incumbent advantage but will staff to go up against the competition.

Next steps

But while we have come a long way since 2010, we’ve only reached the end of the introductory chapter of this story. For many years to come the state is going to be facing, here and across the world, the same combination of tight budgets, rising expectations and challenging economic circumstances.

We’re going to continue to be expected to deliver more for less; so the transformation can never cease – spreading deeper and wider, further and faster. Public service mutuals should be front and centre of that transformation. So we now need to move on the next chapter in this story.

First, I want to remove the blocks that obstruct motivated staff from spinning out from public sector control.

I can announce today plans to establish a peer review scheme to support staff and local authorities interested and involved in developing mutuals. Working with the Local Government Association, we’re looking to establish a voluntary programme that will offer best practice advice and examine perceived barriers to spinning out.

And our new Commissioning Academy will continue to build among commissioners across the public sector knowledge and confidence in how to support and negotiate new spinouts.

Second, I want to encourage even more spinouts in those areas where significant numbers of mutuals have already been created, such as healthcare.

Next month, following his review of staff engagement in the NHS, Chris Ham will provide a set of recommendations to government. Chris’ review has looked at how to give staff a stronger role in their organisations, including through mutual models. This included looking at Circle’s incredibly successful strategy for empowering and engaging staff at Hinchingbrooke NHS Trust and supporting frontline staff in delivering service change.

And we’re also working with the Department of Health to explore options for increasing staff control across the NHS, including expanding the Right to Provide.

Third, we’re going to focus our efforts on sectors with the greatest potential. I have spoken about the potential in youth services and adult social care where there are huge opportunities for mutualisation. We are also working to expand the offer in children’s services and in acute trusts. I have ensured that the current probation reforms have mutuals as a serious delivery option. We’ve even had expressions of interest from fire brigades about mutualising fire services in 1 or 2 areas. Fourth, because what we’re seeing here is the creation of a whole new sector of organisations, I want to ensure that their progress and successes are recorded and underpinned by quality data which is freely available.

So far we’ve done much of the research in-house, in keeping with the kind of start-up nature of this programme. But as with any successful policy, maturity is marked by the state taking a step back.

I am pleased to announce that Cabinet Office we’re working with the Employee Ownership Association to set up a networked centre that brings together all the data on spinouts into one place, allowing everyone to see how they’re performing and what they’re achieving. That’s the next chapter in this story.

Beyond the public sector

The potential for growth is echoed in the private sector experience too. The employee owned sector has been one of the quiet success stories of the British economy in the last 20 years. Companies which are employee owned, or which have large and significant employee ownership stakes, now account for over £25 billion in total annual turnover. And they’re helping to lead the economic recovery, by growing at a rate 50% higher than the economy at large.

So support for employee ownership across both sectors has been and will remain a priority for this government and a core part of our long-term economic plan, a point reinforced by the Chancellor in last week’s Budget, which confirmed 3 new tax reliefs to encourage and promote employee ownership; I’m sure you all look forward to seeing more detail on these in the Finance Bill being published I think later this week. This had a nostalgic resonance for me. I recall as Financial Secretary to the Treasury working on the tax measures to support employee ownership that appeared in the 1991 Budget! This will always, I suspect, be a work in progress.

Conclusion

So, to conclude, 35 years on from Robert Oakeshott creating the Employee Ownership Association, now is the time to put employee ownership right at the heart of our public services.

Shifting power away from the centre and diversifying the range of public service providers is a historic opportunity to redesign how public services are delivered – not just to reduce costs, but to improve service, increase staff morale and stimulate growth.

And that’s a winning combination.

Below is the text of the speech made by Francis Maude, the Cabinet Office Minister, on 13th March 2014.

Introduction

Thank you very much Judy [Baker, Chair of the Cyber Security Challenge].

It’s a great privilege to be asked to open the final of this year’s Cyber Security Challenge Masterclass.

It’s in its fourth year, as you said, and congratulations to you for kicking it off Judy. It’s got 75 sponsors from across government, business and academia – working closely together toward a shared aim, which is incredibly important, of a safe and secure internet.

So thank you to Stephanie [Daman, CEO] and the entire board for the work you’ve done to make this possible.

And it’s a particular pleasure to see your patron, Baroness Pauline Neville-Jones, here in the room tonight.

Pauline recently stepped down as the Prime Minister’s Special Representative to Business on Cyber Security and in both this and her previous role as Minister for Security she’s helped advance the cause of cyber security immeasurably, particularly in raising awareness among senior business figures. And I think I can say if it hadn’t been for your passion and commitment to this Pauline, I think it’s much less likely that the government would have done this extraordinary thing which was – at a time of falling budgets overall and deep financial constraint – actually to commit a significant additional sum to this whole project and the programme and you deserve huge credit for that – so thank you from all of us.

We can never be complacent and there’s much work still to do – and there always will be, this will always be a work in progress – but over the past few years cyber security has rapidly moved up the agenda of company boards. UK businesses are now far better placed to manage the risks that exists.

The fact that so many leading companies are enthusiastically involved with this challenge is testament to this. Just look at the range of sponsors here tonight – BT, Juniper, CGHQ, National Crime Agency, Lockheed Martin and Bank of England. This kind of cooperation is precisely why we as a government are supporting the Cyber Security Challenge financially through our National Cyber Security Programme.

Cyber Security Challenge Masterclass final

Sometimes, when we talk about cyber security it’s all about the dark side – the threat. We shouldn’t lose sight of the fact that this is a threat because of the existence of something marvellous and how appropriate that in these few days when we’re celebrating 25 years of the World Wide Web, we should reflect on the transformation of all of our lives that the internet has brought; what a force for good it is in our lives, for the economy, for our ability to connect with each other and to organise our lives differently and better. It’s the biggest social and technological change in my lifetime.

And I think one of the strengths of the Cyber Security Challenge is that – in the middle of the sober and menacing nature of the cyber threat – it seeks to respond in a very positive way, by identifying and nurturing some of the exceptional talent that can be found in schools and universities and, of course, in offices and homes around the country.

So let me start by congratulating our participants. You’ve been put through a series of challenging scenarios and you’ve had to flex your intellectual muscles to get here tonight, so well done.

I’m told that there are 42 of you who have made it through to this face-to-face stage. Well, 42 as we know is a very auspicious number. According to The Hitchhiker’s Guide to the Galaxy, 42 is the answer to The Ultimate Question of Life, the Universe, and Everything.

Don’t worry – we’re not looking for anything quite as profound over the next couple of days.

Quite simply, we’re looking for raw talent.

There’s a gap between the increasing opportunities to work in cyber security and the availability of people with the right skills. And for the good of national security, commercial interests and the wellbeing of everybody, it’s a gap we need to close. And I’m increasingly confident we can. We haven’t yet, but we can.

Computer programmers and software engineers; logicians and statisticians; code breakers and code makers – as a nation, we’ve produced some of the greats. We have in the UK a fantastically rich heritage, from the Babbage Difference Engine to Tim Berners-Lee’s World Wide Web.

We have some of the best universities in the world for science and technology too.

But the kinds of people we’re looking for won’t always come with a double first from Cambridge. Or even from Oxford, which I’m told is much easier…

We know that aptitude can be found in all sorts of places.

Take Tommy Flowers for instance – the man who developed Colossus, the world’s first programmable electronic digital computer. He worked as an electrical engineer for the General Post Office – the forerunner of BT, which makes tonight’s venue perhaps an especially fitting one. During the Second World War, the government’s code and cypher school at Bletchley Park was sceptical about his invention, so – poor fellow – he had to build it in his spare time using his own money.

But it worked and went on to play an instrumental role in the planning for D-Day, 70 years ago.

Bletchley Park was full of people from all kinds of different backgrounds.

Dillwyn Knox, a renowned expert in Egyptian papyrus.

Pioneering women like the zoologist Miriam Rothschild and the linguist Mavis Batey who, not content with cracking Enigma codes, went on to become a noted garden historian after the war.

And I noticed when I was at Cheltenham in GCHQ recently at the little museum they have of Bletchley memorabilia, a list of the names of people who had been recruited to Bletchley from universities during the last war. Next to J. R. R. Tolkien – the connection between Norse mythology and breaking cyphers is obvious – I noticed 2 names from my old Cambridge college, who were fellows there when I was there, who’d been recruited. And were they computer scientists or mathematicians? No, they were ancient historians. One of them produced a classic work on ancient Rome. What was needed was brainpower: sheer, intellectual brainpower. The ability to process difficult things and make sense of things that didn’t seem to make sense. Intellectually formidable, all of these people served their country, even though they probably didn’t recognise at the time the significance of what they were doing.

When Churchill went to visit Bletchley, he is reported to have said: “When I told you to leave no stone unturned recruiting for this place, I didn’t expect you to take me literally.”

Well, tomorrow you’re going to be I’m told in the Churchill War Rooms – and we’ll be looking for the kinds of people with the skills to be the next Tommy Flowers or Mavis Batey.

And we all know they’re out there, but they’re not always obvious.

On a visit a year or so ago, I remember meeting a young apprentice at a small cyber company in Malvern where, rather improbably, there is this cluster of cyber security related businesses. Not where you’d expect to find it – but great. And this young man who was 16, starting his apprenticeship, he’d been thrown out of school. He wasn’t succeeding academically, it wasn’t his thing. He was disruptive at school and they’d bunged him out. But he loved computers, he loved doing this stuff and was brilliant at it – and he’s found his niche. And I remember asking him how many like you were there in your school – and he replied about half the class. That’s quite a rich talent pool to draw from and are we getting as good as we need to be at spotting that raw talent and using it? Helping people find their niche, the thing they’re brilliant at. And in this country, which is such a rich source of talent, ingenuity and creativity, we must be finding more of them, more quickly, earlier and getting them to work.

So that young man has found his niche and I’m sure he will go on to do amazing things. Some of the brightest and best are self-taught. We want to find people who might not have trodden the usual conventionally career path.

So that’s why we have been supporting the Cyber Security Challenge, through the National Cyber Security Programme, to demonstrate the excitement of this profession to as wide an audience as possible.

That includes young people, making their first tentative steps into the workplace.

But it also includes people already in the world of work, who have the skills, the aptitude or the ability, but haven’t previously considered this as a career – they might not think they have the right technical qualifications or because they’ve already started on a different career trajectory.

So one of the things we want to do is to make it easier for sideways entry mid-career.

A case in point is the winner of the first Cyber Security Challenge – Dan Summers – who was working as a postman. He still works for Royal Mail – but now in vulnerability management.

I can tell you today, that almost 1 in 3 people who have previously reached the final face-to-face stage of this competition go on to find work in the field of cyber security.

So for a third of the contestants here tonight, the next 2 days could be the first step on this new career path.

And even those who choose not to pursue it as a career will leave this contest with an increased awareness, which they will take with them into other careers and workplaces.

Another previous masterclass winner, Jonathan Millican, will be speaking later and I look forward to hearing about his challenge.

Schools Challenge

But it’s by no means a case of “mission accomplished” and never will be. This will always be a work in progress. The internet is defined by its openness and its speed. It’s organic, self-sustaining and self-propelling. It doesn’t have a rewind button. You can’t pause it. It’s going to go on growing – and our training and education has to keep pace.

So to avoid a gap in our cyber defences in 10 or 20 years’ time, we need to look not just to the needs of the current workforce, but over the horizon, to those still in school.

562 schools no less have already registered for the Cyber Security Challenge Schools Programme, with an additional 170 still to be contacted for the next round. Potentially that’s almost 22,000 pupils who have gone from having little or no knowledge of cyber security to now recognising it as an exciting and realistic career opportunity.

So we’ve made a further grant of £100,000 to the Cyber Security Challenge to expand the pilot regionally and nationally, so it can run twice yearly, and can link participating schools to local universities.

I’m pleased to see some of the schools here tonight – and the final of the schools competition takes place next week.

Cyber Security Strategy

Our support for the Cyber Security Challenge is an important part of our Cyber Security Strategy.

We’ve backed the strategy with £650 million over 4 years – to which we added another £210 million last year, to take us through to 2015 to 2016.

In a time of austerity, most areas of government have had to contend with a squeeze on their budgets – so the fact we are increasing spending on cyber security demonstrates how high it rates in our priorities.

But spending, by itself, is not enough. Better skills underpin the government’s whole Cyber Security Strategy. We simply won’t achieve all the other objectives without it.

Earlier today, the Department for Business announced a range of measures we are taking to help increase our capability.

We’ve now developed cyber security content for each stage of education, including teaching materials and e-learning courses to promote cyber security learning in schools. And we’ve funded initiatives for graduates and post-graduate students, as well as internships and apprenticeships, because we want to strengthen the skills of new entrants.

But closing the gap between demand and availability of skills doesn’t just require a focus on education – we also need to ensure cyber security presents an attractive and appealing career choice.

So the task for industry and business and government is to work together to turn cyber security from a little understood role performed by a small number of technical experts, to a mainstream profession – one that’s respected and valued, with proper opportunities for development and progression, so it can attract and retain the best talent.

CESG, the Information Security Arm of GCHQ at Cheltenham, now has a scheme to certify cyber security professionals in the UK. It helps government and business to recruit people with the right skills – at the right level – to the right jobs.

Together with the development of National Skills Standards and learning pathways, developed in conjunction with e-skills UK, it’s helping to define a career path because through regular opportunities for re-assessment it enables individuals to progress as their skills and experience grows.

Next week, the Department for Business is hosting a Cyber Security Skills Showcase to raise awareness about what government is doing and how industry can get involved – and I’m pleased that the Cyber Security Challenge will be represented there.

Finally, because of the relentless and ever-changing nature of cyber threats, we also need to be on the front foot to develop new skills and capabilities in the future.

Cyber security research

4 years ago, our understanding of cyber security was relatively low and there wasn’t really the means of expanding that knowledge in a sustained way, which is why we are also investing in research.

Today we have 11 new Academic Centres of Excellence in Cyber Security Research; there are 3 new Research Institutes and 2 centres for doctoral training. They’ll help us appreciate and predict cyber risks and identify gaps in our defences – because, as the old adage goes, to be forewarned is to be forearmed.

Conclusion

So, in conclusion, over the next 2 days, you’re going to battle it out face-to-face until one of you emerges as “Top Gun”. But actually, this is a competition from which everyone stands to gain.

Our workforce will be more skilled.

The UK will be a more secure place to do business.

People will be safer online.

Ultimately, better cyber security shouldn’t be viewed as a necessary evil – it should be seen as a massive opportunity. For many, including some of those in this competition, it’s an opportunity for a satisfying and rewarding career. It’s also one of the businesses of the future that can help the UK achieve strong lasting growth. And it will help us all reap maximum benefit from the limitless potential of the information age.

So very good luck to you all – thank you very much.

Below is the text of the speech made by Francis Maude, the Cabinet Office Minister, in Dubai on 10th February 2014.

Introduction

It’s a pleasure to be back in the Gulf among friends.

I was here in Dubai in October last year for the GITEX conference to discuss the digital revolution – from the opportunities of big data to the challenges of cyber security.

This time around we’re talking about the future of government services – digital technology is an absolutely crucial part of this, although there are many other ingredients too.

In the UK, public sector reform has been an immediate response to the urgent need to reduce the national deficit. But there is a greater prize at stake – the opportunity to create 21st century services: cost-effective and sustainable for the future, but also faster and more responsive to people’s needs.

Of course no 2 countries have exactly the same experience. But around the world governments are facing similar challenges: squeezed budgets, rising expectations, low growth. So we need a new paradigm for government services. One that delivers better services focused on user need, at much lower cost, in a way that supports economic growth.

It gives governments a clear choice. Indiscriminate salami-sliced cuts to front line services; the soft option path of least resistance. Simpler for the bureaucrat, who doesn’t have to face the political consequences of service cuts. But the second – the high road – of cutting government’s own costs and driving innovation and change – is the way to go.

That’s what we did in the UK. It’s tough. It’s means unrelenting hard practical work. But it can bring about lasting change.

All round the world I’ve seen governments wrestling with the same problems.

I’ve seen how Singapore’s Public Service 21 programme encourages staff to question assumptions and seek new ways of doing things. I visited India too, and saw how they recognised the importance of improving their civil service through training.

And I’ve seen how countries like Estonia and South Korea are leading the way in digital.

I was particularly taken with the Korean phrase “Bali-bali”, meaning “quick! quick!” – surely a phrase that’s stamped across the heart of anyone in politics? Certainly one that my own long-suffering staff have had to learn to live with!

The UK has a long history of cooperation, friendship and open dialogue with our Gulf partners. And while there is no single formula for success – especially in a region with distinct cultures and differing political systems – there is still much we can learn from each other about the future of government.

So today I’m going to speak about 5 principles that characterise the UK’s approach to public service reform since the coalition government was formed in 2010.

I stress that we did not start with these principles. We started not with the theory but with the practice of making changes to test what worked and what didn’t. These principles are distilled from that practice and that experience. They’re pragmatic, not ideological. I think they can be of widespread application, for governments of all origins, whether right, centre or left. We all face the same challenges and we can all learn from each other’s experiences.

Open government

The first principle of public service reform is openness.

Using transparency and open data to bring about continuous improvement can help governments to address rising public demands and the challenges of austerity.

This won’t always be comfortable. In fact transparency can be extremely uncomfortable – open data exposes waste and taxpayers are able to see exactly how their money is spent.

But this sharpens accountability and informs choice over public services. And combined with ever increasing technological capability, it will ultimately create more accountable, efficient and effective governments.

Open data is also a raw material for economic growth – supporting the creation of new markets, businesses and jobs.

In the UK we have committed to enhance the scope, breadth and usability of published contractual data which will help stimulate greater diversity in government suppliers.

And last year, G8 governments came together under the UK Presidency to agree a landmark Open Data Charter. This sets principles for the release and re-use of data and for its accessibility. Having these principles on openness is a critical element in encouraging growth and ensuring consistency, helping governments and businesses to operate more closely together.

Transparency is an idea whose time has come. And it is the friend of the reformer. Governments that work with it, and go with the grain, will be stronger for it.

Tight centralised control

My second principle is that tight control from the centre over common activities – like property, IT, procurement, management information, and oversight of major projects – reduces costs and encourages collaborative working.

Back in 2010, when the coalition government was formed, the UK was spending £4 for every £3 it raised in taxes. Billions of pounds got frittered away on wasteful consultancy, superfluous advertising and disastrous projects. And no effort was made to get to grips with the millions lost every year to fraud, error and debt.

Many of the fundamental components of efficient management and effective oversight had been conspicuous by their absence.

So within days of coming to office we introduced tough spending controls on discretionary spend in central departments.

Immediately we started renegotiating contracts with our biggest suppliers – dealing with them as a single customer instead of letting them play one part of government off against another.

We have also reduced the size of the civil service by more than 15% which allowed us to cut the cost of the government estate by vacating buildings that were no longer needed.

And we created something that had been lacking in government for too long – a strong corporate centre. Known as the Efficiency and Reform Group it works across artificial departmental boundaries to implement cross government solutions to cross government problems.

It’s about making government work more like the best-run businesses; ensuring every penny of taxpayers money is used to maximum effect.

And as a result of this tough-minded approach, in our first year we saved £3.75 billion, in our second £5.5 billion, £10 billion in our third year.

And in the first half of the current financial year we saved £5.4 billion – 73% more than we had saved at the same point last year.

Loose control

But we need to do much more to balance the books – we need to find new and better ways of working.

So my third principle is that tight control over the centre must be matched by looser control over operations.

Spin-outs and services commissioned outside the public sector should become the norm.

Public service mutuals, joint ventures and charitable enterprise are attractive alternatives to the old binary choice between delivering services in-house or full red-blooded privatisation.

That was a stagnant, rigid and unimaginative model which stifled innovation.

So in the UK we are breaking the public sector monopoly over service provision. We already have around 80 live and trading staff owned mutuals, up from just 9 in 2010, with responsibility for well over £1 billion worth of services – everything from libraries to elderly social care.

They foster a sense of ownership and empowerment. Everyone understands their role. Everyone has an incentive to make it work.

And it frees public sector workers to do their job as they know best – because the people who know best are not politicians or bureaucrats, but those who deliver frontline services day-in, day-out.

When this public service ethos is married to entrepreneurialism it can be an incredibly powerful force.

It’s part of a mindset which elevates the service that the public receives above the structure that delivers it.

Digital

My fourth principle is about digital.

If a service can be delivered online, then it should be delivered only online.

This is the approach which is guiding the transformation of 25 of the largest transactional government services in the UK so they are simpler, clearer, faster and – most importantly – designed around the needs of the user.

Every superfluous page, every unnecessary question, is another dead end for an angry, frustrated and confused user.

So by digital by default, we mean creating digital services that are so straightforward that all those who can use them will choose to do so, and those who can’t are given the support they need.

It’s an iterative process – building and testing in small chunks and working quickly to make improvements along the way. The feedback continues – so do the refinements – and over time the services will evolve to keep pace with new demands.

And we can achieve huge cost savings by doing it this way.

In the past, governments seldom – if ever – consulted people about the services they were using. It was a “Big Bang” approach which sent money and expectations hurtling down a black hole.

The first the public would see of a service was when it went live, by which time it would be too late to make any changes if it didn’t work.

But that’s completely the wrong way.

Only when you find out what people want, how they want it delivered and how they intend to use it do you even begin to think about designing the service or building the technology.

And digital public services can also stimulate a generation of world-beating software and service businesses.

By committing to open standards and open source software, governments can create a more open market for IT suppliers, increasing competition, lowering licensing costs and advancing innovation.

Innovation

I’ve talked about new ways of doing things – new models of delivery, new digital services and a new attitude toward openness and growth.

All this requires the right the skills and culture within the public service, so my fifth principle is innovation.

Public servants must be given the flexibility to try sensible and innovative ideas, rejecting those which don’t work and adopting those that do.

Risk and recklessness are not the same thing – risk, if managed properly, can be pioneering, original and transformative.

And the real error isn’t making a single mistake – new ones are forgivable, repeated ones less so. The real error is never to try anything new in the first place – or to continue doing something that isn’t working.

So we need a culture that is more open and less bureaucratic, focused on the delivery of outcomes rather than the process or the structures.

Where people feel able to challenge – so the status quo receives the same scrutiny as a new idea.

And where public servants are afforded the training and skills they need with the responsibility to do their jobs and to be accountable for what they achieve.

And what sort of skills do I mean?

I’m talking about the commercial skills necessary for public servants to feel confident commissioning services from the private and voluntary sectors.

The digital skills needed to design online services based around user needs.

And the leadership skills necessary to embrace the changes needed to deliver government priorities and projects on time and on budget.

All institutions must keep pace with changing circumstances – the best organisations continually seek to improve themselves.

And in the public sector, success must be measured not in staff numbers or hours worked, or in spreadsheets and emails, but by the answer to the question: “How has my work today helped people?”

Conclusion

Open, tight, loose, digital, innovative.

These are what I believe should be the characteristics of productive, effective and successful governments, now and in future.

But this is a race with no finishing line – we will never be able to say “mission accomplished” or “job done”.

The work of making government more efficient never ends.

Because organisations are either getting better or getting worse. There is no in between, no steady state. If you think you’re staying the same, you are getting worse.

So where the UK has expertise we want to share it – and where we need to improve, we are ready and eager to learn.

And I look forward to our discussions today.

Below is the text of the speech made by Francis Maude, the Cabinet Office Minister, on Sprint 14 on 29th January 2014.

It’s a pleasure to welcome you here today.

I remember how many of us struggled through the snow this time last year to Sprint 13 at the QEII Centre.

Then we set out a bold ambition to make 25 major public services fully digital.

We gave ourselves just 400 working days to deliver this transformation. One year on – 200 working days in – we can reveal some of those digital services for the first time.

This time we’re at the London Film Museum…so perhaps I should subtitle this speech “Close Encounters of the Digital Kind”…or “Honey I Shrunk the Costs.”

In fairness, no one will ever – probably – make a Hollywood film about our work.

People don’t choose to work for government to be famous or rich. They want to make a difference and to contribute to the future of their country.

But actually increasingly our digital agenda is bringing the “wow” factor to how the UK government is viewed especially abroad. We’re showing that it’s possible for government to be at the forefront of innovation.

And we’re showing that it’s possible to make public services better while saving taxpayers’ money – perhaps the holy grail of efficiency.

Today is designed to give you a glimpse of how and why.

Transformation

When Steve Jobs unveiled the iPhone he spoke of the icons being so bright and clear that people would want to “lick them right off the screen.”

Well, we didn’t exactly have that in mind when the guys designed the government’s new website, GOV.UK, but the look and feel certainly mattered.

It’s clear, consistent and uncluttered.

That’s why we’re proud it beat off the Shard and the Olympic cauldron to win the coveted – and unsought – Design Museum Award – eat your heart out Thomas Heatherwick.

But design is about more than appearance.

Sir Jonathan Ive, Apple’s British born designer, put it best when he said:

‘The word design is everything and nothing. We think of design as not just the product’s appearance: it’s what the product is and how it works. The design and the product are inseparable.’

So what does that mean for government?

It means putting users at the heart of public services.

Only when you know what people need, how they want it delivered and how they’ll use it do you even begin to think about building the technology.

It’s a theme that runs through this government – whether ensuring the primacy of patients’ needs in the NHS; or designing education services around the requirements of children and parents.

It’s obvious really – but too easily forgotten when bureaucracies become too large, too powerful or too remote.

So digital by default isn’t about swapping paper or telephone based services for digital ones as an end in itself.

Digital-by-default is a change to the whole way we design and deliver services.

A chance to revolutionise public services in the way that eBay and Amazon have revolutionised the marketplace.

And to renew the relationship between citizens and the state…just as Skype has brought people closer together and Facebook keeps people connected.

Exemplars

That’s not to say previous governments haven’t tried.

Back in 1999, the Modernising Government White Paper proposed that half of government services should be delivered electronically by 2005 and all of them by 2008.

But progress was piecemeal to say the least. The old online – in inverted commas – student loan application process ended by printing out a 30 page form to sign and send off by post.

There’s no good reason for government transactions to be that complex. The airline industry contends with numerous complex regulations. Yet you can cut through them all to book a flight with a few clicks.

So how is it different this time?

It’s about delivery.

We’re changing things by doing them, not by talking about them. We’re the JFDI school of government.

We’ve started with a first wave of 25 exemplars. Our objective is to create digital services that are so good, people choose to use them.

Of course, they’re not going to be perfect first time – nor will they ever be. It’s an iterative process. It doesn’t end when the service goes live. It will evolve. The feedback will continue – and so will the refinements.

And the proof of success is whether people use them or not.

Take the Carer’s Allowance for example.

Already 45% of applicants are using our online beta.

This isn’t the result of an expensive marketing campaign to force people to shift.

The service is good enough that people have chosen to use it – voting with their fingers and mice…

We are here today to show, not to tell.

Ministers and senior officials from several government departments are going to demonstrate 5 of our new digital services.

– registering to vote

– applying for a visa

– Pay-As-You Earn services for employees

– viewing your driving record

– booking prison visits

These are bread-and-butter transactions that people want to be quick and hassle free, at a time of their convenience, not when it’s convenient for the government.

If we get it right – and we are, as you will see in a few minutes – we will make life better for citizens and businesses. And we will change the way people think about how government works.

Our efforts to rationalise the number of government websites is a case in point.

Previously, departments didn’t keep records. No one had a grip on this. Costs were duplicated and government looked and was fragmented.

But the public shouldn’t need to understand where the role of one department ends and another starts to find the information they need. Which is why every ministerial department has been brought together online under GOV.UK.

Now started transitioning the agency and arm’s length body sites.

And yet closing government websites sometimes feels like a nightmarish game of splat-the-rat. As soon as you knock one website on the head, another pops out somewhere else.

The number keeps going on up as fast and we close them!

Later this week, we will publish our latest quarterly update. Although 19 websites have closed and a further 18 sites have transitioned to GOV.UK since the last update in October, the total number of open central government websites that we’re aware of has risen to 455 – 15 more than the previous report!

There’s absolutely no reason for every single bit of government to have its own unique web presence. So we’re going to press on.

Nearly 300 government websites will migrate to GOV.UK over the coming year. Over a third (111) of these have already moved, but we must finish the remainder, bringing together government information and services in one place, with lower costs and consistent standards and simplicity for the user.

Deficit reduction

Many of you here today have been working to deliver these kinds of transformations.

And there is an adrenaline that comes from doing things differently. So you can take real encouragement and motivation from being part of this.

We can also be proud that digital is one of the major contributions to reducing the deficit and encouraging growth in the British economy.

As the Chancellor highlighted recently, every part of the public sector will continue to need to face up to the challenge of reduced budgets for some time to come.

And we know much more money can be saved – staggering savings potentially – while actually improving quality online.

Last year we saved the taxpayer over £500 million by stopping projects not aligned to our IT spending controls. Digitalising public services could save citizens, the Exchequer and businesses £1.2 billion over the course of this parliament, rising to an estimated £1.7 billion each year after 2015.

The cost of digital transactions is lower for a start – not just a little bit lower, but a lot.

– 20 times lower than over the phone

– 30 times lower than by post

– and 50 times lower than face-to-face

But we’re also changing our whole approach to procuring and running IT.

Previously, the UK government spent more on IT than any other country in Europe except Switzerland, although I think that included the cost of CERN. They were looking for the God Particle – but over here, we were left with an ungodly mess.

In the old world, we were procuring programmes before they had been designed – or over such a long period of time that the technology was out of date before it was delivered.

To re-visit the film metaphor: we were promised “It’s a Wonderful Life”, charged a “Fist Full of Dollars” – and then a “Few Dollars More” – but we were left with “Titanic”.

For too long, big IT and big failures have stalked government. Now we want to see a new world, a start-up world, where what you can do matters most and where value includes both cost and quality.

At the time of the last General Election just 6% of central government procurement spend was with SMEs and government did not even monitor who its suppliers were.

We’ve stripped out unnecessary bureaucracy and paperwork and ensured a level-playing field for all businesses. Now direct spend with SMEs is up above 10% and we are spending a further 9% indirectly. That’s good news for SMEs across Britain but we want to see these numbers grow further.

I am pleased to see Stephen Allott here in the audience today, the Crown Representative for SMEs – he’s done fantastic work in driving the government’s SME agenda forward.

We know the best technology and digital ideas often come from small businesses, but too often in the past they were excluded from government work. There was a sense that if you hired a big multi-national, which everyone knew the name of, you’d never be fired.

We weren’t just missing out on innovation, we were paying top dollar for yesterday’s technology.

One great example of the potential from small businesses was when we retendered a hosting contract. The incumbent big supplier bid £4 million; a UK-based small business offered to do it for £60,000. We saved taxpayers 98.5%.

I don’t think we can make savings of that scale everywhere but hard-working people expect us to try as hard as we possibly can. We’ve published our IT red lines which I will be unashamedly militant about enforcing:

– no IT contracts will be allowed to exceed £100 million without a powerful reason

– hosting contracts will not last for more than 2 years –the cost of hosting halves every 18 months, why commit to a longer contract?

– there will be no automatic contract extensions without a compelling case

– and companies with a contract for service provision will not be allowed to provide system integration in the same part of government; there is a conflict of interest here, and contracts are too opaque

The whole point is for Whitehall to look beyond the oligopoly IT suppliers – the legacy technology giants.

We want the right technology at the right price for taxpayers – whether that’s from an innovative big supplier which gets the new ways of working with us, or a start-up.

And don’t think British start-ups are all in Tech City. We are seeing clusters springing up right across the country from Northern Ireland to Manchester and Liverpool and Newcastle – this is the future of Britain.

To harness the power of these innovative new companies we’ve created the CloudStore – a whole new concept in IT buying.

An open market where public sector organisations can purchase IT off the shelf. For both government and the companies listed, this means less bureaucracy and less hassle.

The public sector as a whole has already spent more than £78 million through CloudStore. And over half of this – 53% – is going to small and medium-sized firms.

Central government is spending even more with SMEs – two thirds of its purchases on CloudStore, 66%, are going to SMEs.

If we saw as much money going through CloudStore every month as we did this November, the annual spend would be £120 million. That’s a lot of money going through channels specifically designed to be accessible to all businesses, whatever their size.

But we’re not stopping there.

That’s why I’m pleased to set out my ambition today that through the CloudStore and digital services framework we will spend a further £100 million with small businesses offering IT services and technology to government by the next General Election.

SMEs are engines of growth in our economy and this is a massive vote of confidence in the role they are playing to help Britain compete and win in the global race.

Open standards for document formats

Over the past few years we’ve moved away from a small oligopoly of IT suppliers to create a more open market. And yet the software we use in government is still supplied by just a few large companies.

I want to see a greater range of software used, so people have access to the information they need and can get their work done without having to buy a particular propriety brand. In the first instance, this should help departments to do something as simple as sharing documents with each other more easily.

So we have been talking to users about the problems they face when they read or work with our documents – and we have been inviting ideas on how to solve these challenges.

Today I can announce that we’ve set out the document formats that we propose should be adopted across government – and we’re asking you to tell us what you think about them.

It’s not about banning any one product or imposing an arbitrary list of standards. Our plan, as you would expect, is about going back to the user needs, setting down our preferences and making sure we can choose the software that meets our requirements best.

Technical standards for document formats may not set the pulse racing – it may not sound like the first shot in a revolution. But be in no doubt: the adoption of open standards in government threatens the power of lock-in to propriety vendors yet it will give departments the power to choose what is right for them and the citizens who use their services.

So a combination of open standards and a fairer procurement process can be a winning combination for Britain’s small businesses.

Conclusion

In the last 18 months, numerous foreign delegations – from as far afield as South Korea, Kazakhstan, and the Netherlands – have visited the Government Digital Service in Holborn, keen to learn from their experience.

The New Zealand government is using our open code to build its own version of GOV.UK.

And in October, when the so-called Obamacare website ran into problems, US commentators pointed – in a way that must have been really annoying for them – to the UK’s approach as a better alternative.

Praise for government IT projects is an unfamiliar spectre.

We all live with the experience of the Lasting Power of Attorney Team who had to add a positive feedback button because of the number of comments they were getting.

But I think the closer people look at what we’re doing, the more they will see something special.

So you should feel rightly proud of what you have achieved. We’ve set the bar high – and I have every confidence that you will deliver what you have set out to over the next 200 days.

I’m proud of what all of you have done to set us on this course.

But that’s not the end of it. There are risks.

We can’t slow down. And we can’t have even a glimmer of complacency.

Lots still to do.

The work goes on. Not just to deliver digital-by-default, but more broadly, because making government more efficient and delivering simpler, clearer, faster services is a task that should never end.