The creaking computer system has already caused thousands of state pensioners to miss out on payments and is hindering the delivery of frontline services, the National Audit Office has warned.
The Treasury’s 2021 Spending Review made a commitment to invest £8bn in digital, data and technology transformation by 2025.
But billions more – alongside significant computer expertise – may be needed to drag Government computers into the 21st century.
The National Audit Office, which scrutinises public spending for Parliament, highlighted the recent pension scandal as a consequence of poor digital services.
It estimated that 210,000 women were underpaid £1.3bn of state pension after mothers taking a break from the workplace to raise children found their home responsibilities protection not married up with their National Insurance contributions.
And the credibility of the Government’s plans to allow people to file their taxes online has been undermined by repeated delays and a bill that has increased about sixfold.
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The final bill for the modernisation of computer systems dealing with VAT, income tax, self-assessment and corporation tax is now expected to be £1.3bn – an increase of more than £1bn from earlier estimates.
The biggest IT project failure was the NHS National Program for IT which was supposed to centralise the health records of Britons online so medical staff could access information easily and quickly.
This cost the taxpayer more than £10bn – £3.6bn more than ministers had anticipated. From the outset, the project was plagued by delays with the delivery of core systems stalled due to fears that some software was not fit for purpose.
The independent public spending watchdog has previously warned that UK government department IT systems are old-fashioned and inefficient.
In July 2021, a report identified six key areas of concern, concluding that successive governments demonstrated “a consistent pattern of underperformance” over a quarter of a century.
And new research out in Spring found most digital change decisions in government are made by generalist leaders who lack the expertise to understand the digital challenges.
Only four percent of civil servants are computer professionals, compared with an industry average of between eight and 12 percent.
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To save billions of pounds of taxpayer’s money, ministers and civil servants running departments need to improve their understanding of digital transformation, the latest report says.
Root and branch reform is needed after earlier digital transformation attempts across the government added new changes on top of existing services using old data and systems.
This has just entrenched higher costs and earlier inefficiencies, the watchdog said. Gareth Davies, head of the National Audit Office, warned that failure to bite the bullet of more funding has led to poor value, with more money required for emergency measures or a sticking plaster approach.
“The underlying challenge is that adequately funding responsible capital programmes for our public services leaves less for higher profile projects,” he said.
“Investing adequately to maximise value for taxpayers and service users is equally vital for IT systems. Recent NAO reports chart how ageing systems are creating problems for service users, such as state pensioners missing out on payments they are entitled to.
“Outdated technology also acts as a brake on vital innovation in the delivery of frontline services. We welcome the new focus from the government on identifying public services where digital transformation, alongside better-quality data, can make the biggest difference to service users and taxpayers.”
“Just like buildings, this will require long-term investment to deliver the most value. Given the many pressing demands on public funding in the coming decades, the imperative to get the most from every pound of public money has never been stronger.”
A government spokesperson said: “We are putting digital at the heart of what we do, including by upskilling 90% of senior civil servants in digital, data and technology to ensure we can deliver in the digital age.”
“As the NAO report recognises, the Central Digital and Data Office is playing a leading role in delivering long-term digital transformation across government.”
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