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Turning the Treasury: Rethinking the UK’s digital spend
Earlier this month, the government published a ‘Performance Review of Digital Spend’. The Chief Secretary to the Treasury, Darren Jones, nipped straight on to LinkedIn to put his seal of approval on a ‘wonky but important piece of work’. He backed that up with a speech at the Institute for Government that ranks among the most thoughtful public interventions from a Treasury minister on the inner workings of the state in many years.
None of this was ever going to make the top item on ITV News. But in a quiet and undemonstrative way it signals an appetite for change that could amount to something more radical than DOGE’s chainsaw. The challenge now is seeing it through.
A long time ago, when I was still working for GDS, we used to talk about the ‘square of despair’ – the four horsemen who showed up repeatedly at the scene of apocalyptic technology project failures. You got a different list of four depending on who you asked. But without exception, everyone’s list included funding.
Public discourse about how much cash gets assigned to items on the state’s shopping list is loud and lengthy. The Spring statement will crank this up another notch. There’s never enough for everyone; millions of words are poured over who should win out. The slightly deeper dives into state finances – often penned by former officials – brood darkly over the influence of the ‘Treasury brain’ and its draining effect on the nation’s resolve and vigour. But these, too, tend to focus not so much on the ‘how’ as the ‘how much’.
The methods matter. The way money is distributed to solve the knottiest public service challenges isn’t secret. There are enough pdfs, articles and web pages more or less outlining who decides; who opines; how much paperwork is required to release what; the assurance stages, the timescales, the analysis and evaluation. What isn’t as obvious is what all of this bureaucracy is actually intended for; or indeed, whether it is intentional at all. It’s the product of choices, certainly, but choices that rarely break the surface of political discourse. Yet this framework is rarely treated as a series of decisions actively made by somebody. Instead, it is reduced to something akin to the ocean currents: complex, mysterious and beyond the limits of human influence; exerting a profound influence on the climate. At times, it seems the Green Book and heuristics of Treasury analysts have been handed to the country as if by fate.
As far as I can tell, this state of acceptance extends into HM Treasury officialdom itself, where taking active interest in setting the rules of the game – or indeed managing the behaviour of the institution and those working in it – is seen as a low priority. The exciting business of helping the Chancellor weigh up their political calculus is considered of far greater importance.
When it comes to major programmes, the Treasury, like most finance ministries around the world, acts more like a debt management office than an investor. It gives out large amounts of money, over long periods of time, to delivery models that are recognised and familiar, looking for a reliable return more in hope than expectation.
It matters not whether all that money is needed at the start, or whether the future can be reliably predicted, or whether that familiar delivery model – large-scale outsourcing, say – has proven reliable in delivering outcomes. The game for teams within the public sector is a Kafkaesque one: invest huge effort upfront to convince decision-makers — often armed with even less data — that you know what you’re talking about. More often than not, it also means pretending your project harmonises with every other big public initiative, inviting the perils of ‘everythingism’ called out in this excellent report by Joe Hill.
If you win the argument, take your cheque and get on with it. Every year or so somebody will ask whether you’ve met a list of milestones that are now largely irrelevant to the programme’s success; you humour them. And when you’ve run out of money, start the whole process again in order to find cash for maintaining something that was not quite right at the start, and certainly isn’t now.
What the Performance Review recommends, in essence, is giving the government the option to apply an investor’s mindset to public spending on digital and technology. Put smaller amounts of money into new ideas much faster. See if they work – and if they scale. Invest in portfolios so one can prioritise spending across a range of different risks. Change the personnel involved in assessing the merit of investment cases so that they are more aware of the technology choices involved, and context in which the service’s users will interact with the state. Make the burden of bureaucracy proportionate to the risk taken with public money.
It’s important not to stretch this analogy beyond breaking point. Government isn’t about to become a venture capitalist – nor should it. It must look for returns that aren’t measured solely in terms of cash. For as long as ‘cashable’ benefits are king, narrow minded definitions of public value win out. We need to think broader than that.
At least this Performance Review recognises that to make less risky investments in public services underpinned by technology, the government needs to change the process, change the people and change the balance between investment and maintenance. Not many countries have got that far; they will have to eventually. The recommendations in this report are the clearest public statement yet that the UK government recognises a need for a new kind of financial intent. If these changes stick, and extend their reach beyond digital and technology, then perhaps we can leave the chainsaw in the cupboard.
Written by
Andrew Greenway
Founder