PRESS RELEASE : Archaic tech sees public sector miss £45 billion annual savings [January 2025]

The press release issued by the Department for Science, Innovation and Technology on 19 January 2025.

Public sector workers are being held back by archaic technology according to a new report set to be published on Tuesday.

• Public sector workers are being held back by archaic technology – crippling productivity and slashing public satisfaction in services, according to a new report set to be published on Tuesday.
• Inheritance from previous government shows an overreliance on contractors sending costs rocketing and how outages and cyber-attacks are putting NHS and public services in jeopardy.
• Comes ahead of ambitious reforms and new tech putting AI and digital technology to work for the public sector, delivering on the AI Opportunities Action Plan and saving taxpayers billions while improving public services to deliver across Plan for Change.
• New AI tools ‘Connect’ and ‘Scout’ also announced to help speed up clean power connections and keep mega-projects running to time, driving growth and lowering energy bills in the long term.

Taxpayer funded services from the NHS to local councils are missing out on £45 billion in productivity savings – more than enough to pay for every primary school in the UK for a full year – because they are too often dependent on old and outdated technology.

With nearly half of public services unable to be accessed online, people are spending too much time applying for support in person, including time on hold or travelling to council offices. Public sector workers are also wasting time sifting through physical letters. This means response times are unnecessarily long with British citizens paying the price and wasting valuable time on government admin.

Examples highlighted in a new report set to be published this Tuesday show the shocking state the previous government left public technology. It includes outdated examples including the need to register a death in person, which demands time from people unnecessarily as they are mourning the death of a loved and the pointless burdens placed on small businesses, like forcing firms to put an advert in their local paper when they want to buy a lorry – getting in the way of growth.

Some departments manage over 500 paper-based services and a lack of information sharing between departments further hampers citizens, often the most vulnerable. For example, patients with long term health conditions can be forces to speak to over 40 different services to access the care and support they need and are entitled to, with these different public bodies rarely sharing information, leaving people to repeat themselves time and again.

To tackle these issues, the Technology Secretary will use digital tools, AI and common sense to overhaul public sector technology – so it saves money, treats people with respect, and just makes sense. He will set out a wholesale reshaping of how services use technology, reaching across local government, the NHS, and more, in a bid to modernise the state.

The changes due to be announced could save taxpayers billions by making public services more productive, as well as freeing up public servants and doctors to spend more time helping the people they serve. The changes will also make it easier for people to access government services and drive economic growth by supporting businesses get the approvals they need more quickly – delivering on multiple aims of the Government’s Plan for Change.

Just over a week after the AI Opportunities Action Plan, the changes will deliver on key recommendations by transforming citizens’ experiences of government services, improving productivity and strengthening the foundations from how data is used, to boosting skills, and attracting talent.

Technology Secretary Peter Kyle said:

Technology that sits at the foundation of our country has been left to wither and decay under the hands of the previous government, too often grinding to a halt and stalling essential public services – racking up a huge bill for the taxpayer.

It doesn’t have to be this way – and it won’t be with our Plan for Change. There is a £45 billion jackpot for the public sector if we get technology adoption right, that’s twice the size of the black hole we faced when we took office, and it’s not an opportunity we can let pass us by.    The new findings are also expected to show government departments have been pushed towards bringing in contractors and consultants to complete basic technological tasks instead of full-time staff. This trend was driven by weak salaries and headcount restrictions that stopped departments. This is despite them costing three times more than civil servants and eating up £14.5 billion in taxpayer money a year.

Findings will show that over one-in-four digital systems used by central government were found to be outdated. In the worst cases, this figure almost tripled (70%). This outdated technology can rack up huge maintenance costs, ultimately resulting in the taxpayer paying out three-to-four times more than if the technology was kept up to date.

A growing number of these outdated systems are “red-rated” for reliability and security risk. The report found that NHS England alone saw 123 critical service outages last year, often meaning appointments are missed and patients can’t get the care they need because staff were forced back to using paper-based systems.

Among the reforms to be announced later this week, a new offering from an expanded Government Digital Service will search for vulnerabilities across the public sector that hackers could use to shut down essential services and stop citizens accessing critical support. Support will then help different organisations fix these issues and make the UK more resilient to cyber attacks.

Energy AI tool – ‘Connect’

The Government is also today unveiling new AI tools that will help to speed up the queue to connect clean energy projects to the national grid, helping to reduce energy bills and power the AI economy amid plans to boost the UK’s computing power to drive growth, as part of the Plan for Change.

Connect, developed by AI experts in Whitehall, is an AI tool under development that could help to reduce delays large-scale energy generation projects, like wind and solar farms, are facing to get a connection to the electricity grid. New sources of clean, renewable energy will not only protect billpayers from unstable fossil fuel markets, but boost the UK’s wider energy security ambitions – freeing us up from relying on foreign sources of power and breaking the energy monopoly which countries like Russia currently control.

The technology will also support the work of the newly announced AI Energy Council, bringing together energy producers and big tech companies to understand the power demands of AI and the Government’s ambition to expand compute capacity by twenty times.

Over the last five years, the grid connection queue has grown tenfold and now contains over four times the amount of energy generation the UK is predicted to need by 2050. Many of these projects are speculative or do not have the necessary funding or planning permission to progress, causing delays for viable projects behind them.

Added to this, the ‘first-come, first-served’ connection process, and much-needed upgrades to the grid’s capacity, are contributing to energy developers facing delays of up to 10 years to get new renewable electricity flowing into the grid.

With input from the Department for Energy, Security and Net Zero, Ofgem and the National Energy System Operator, the team behind ‘Connect’ are exploring how this work – powered by AI – could be applied to better match energy generation projects – like ready-to-go large scale wind farm projects stuck in a queue – to grid capacity where it is available.

Energy Secretary Ed Miliband said:

This innovative use of AI could help us clean up the queue and slash waiting times to hook important energy projects up to the electricity grid, which is key to delivering our clean power by 2030 mission.

The sooner we can get more homegrown renewable energy onto the grid, the quicker we can deliver on our Plan for Change and homes and businesses can benefit from a new era of clean electricity.

Infrastructure AI tool – ‘Scout’

“Scout” is another tool developed by the team, which will help officials make sure major multi-billion-pound projects are delivered on time and to budget – whether that’s a new motorway or a mid-sized hospital. It does this by automatically analysing thousands of documents to help detect problems earlier, enabling timely interventions that keep critical projects on track.

The tool replaces manual processes where up to 150 reports and documents are reviewed, leading to crucial details being glossed over and opportunities to prevent problems missed. It will help civil servants to be more efficient, and improve the government’s ability to run multi-billion-pound projects to time and budget, fixing the foundations of our economy as we drive ahead in delivering economic growth.

In the tool’s analysis, it follows stringent guidelines set by the Infrastructure and Projects Authority,  and cuts manual processing time from hours in five minutes.

These tools are being announced following Matt Clifford’s AI Opportunity’s Action plan, where the Government accepted his recommendation to scale successful AI pilot projects within government. The wider plan looks to unleash AI to drive economic growth across the UK and deliver the Prime Minister’s Plan for Change.

Notes to editors:

• The State of Digital Government Report, with support from Bain & Company, is based on insights from over 500 leaders across 120 organisations, data from 100+ entities, and input from 65 stakeholders across public, private, and third sectors. It will be published next week in full.