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27 November 2014

Jon Cruddas MP’s speech about building a digital state: full text

Innovation and democracy.

By Jon Cruddas

Building a Digital State for Innovation and Democracy

Speech to the Institute of Government

Thursday, 27 November, 2014


Thank you Peter for inviting me to take part in your debate about effective government.

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I’d also like to add a thank you to Stefan Magdalinski for his contribution to this speech.

Stefan spent some of the summer in my office getting us up to speed on what digital technology  can do for government and politics.

Our task, in terms of Labour’s Policy Review has been to radically rethink Labour’s politics when there is little money to spend.

The 5 challenges you set out in your Programme for Effective Government very much speak to this agenda:

-Reducing the deficit;

-Economic growth for decent jobs and shared prosperity;

-Investing for prevention to tackle complex social problems at source,

-Reforming public services;

-And sharing and devolving power to communities and individuals.

If you read our Review Reports the organising principles are devolution and transformation, prevention, coproduction and human wellbeing- echoing many of your themes.


We organised our priorities around the 3 things that matter most to people: family, work and the local places they belong.

And we asked ourselves two questions.

What do we want government to do?
And what role can digital technology play in creating a government for innovation and more democracy.

It is this final question that I want to develop today.


The White Heat of Technological Revolution

In 1963 Harold Wilson defined the sixties as the decade of scientific revolution, and Labour as the party of modernity.

‘Our children’, he said, ‘are accepting as part of their everyday life things which would have been dismissed as science fiction a few years ago’.

Technical change was ‘greater than in the whole industrial revolution of the last 250 years’.

But Wilson warned that the white heat of technological revolution would only forge a better country if we were prepared to make far reaching changes in our economic and social attitudes.

Just over 50 years later Wilson’s scientific revolution looks old fashioned.

Think of the scene from Dr No when Sean Connery finds his way into Dr No’s multi-level control centre with its atomic reactor set in the floor.

The white coated technicians with their clipboards checking the banks of consoles with their flashing lights.

Today our children’s toys have more computer power.

Digital technology is transforming our institutions and businesses at an extraordinary rate.

We are at the beginning of a new industrial revolution and it is going to transform politics and government.

On Tuesday, my colleague, Chi Onwurah, Shadow Minister for Digital Government, launched Labour’s Digital Government Review.

An independent report setting out a vision for a new model of digital government.

If we are prepared to learn from Wilson’s white heat of technology revolution, the future holds extraordinary opportunities for creating wealth, for a more a democratic society, and for new, creative ways of living.


But let’s begin where we are today.

The disruption of technological change is greater than Wilson could have imagined.

It has unseated  whole industries and workforces.

Deindustrialisation and globalisation have transformed our class system and left our country scarred by dispossession.

Our football clubs, power-generating companies, airports and ports, water companies, rail franchises, chemical, engineering and electronic companies, merchant banks, and other assets have been sold off to foreign ownership.

The organisations and solidarities that protected workers from the power of capital have been weakened or have disappeared.

Millions have experienced falling living standards and stagnant wages.

Change has brought insecurity.

People feel abandoned, and disenchanted by party politics.

They are losing confidence in the ability of our public institutions to serve the common good.

Many believe that government is not interested in the things that matter to them.

Those who take decisions on behalf of others, whether in the private or the public sector, are too often unaccountable.

People are locked out of government and they know it.

So we are facing some of the biggest challenges in my lifetime.

Never has government felt so inadequate, nor our politics so small.                                         


Our system of government is out of date.

The British State was designed in an industrial age of mass production and mass administration.

It is no longer fit for purpose in this digital age of real-time innovation, cloud computing, and rising popular expectations for rapid service delivery.

Its power was built on the political union of our nations, and once stretched across a global empire.

Now it barely reaches Edinburgh.

It is over- centralised and undemocratic.

It needs a radical re-design and England needs a new devolution deal.


Moreover, our established political parties are in danger of being past their sell by date.

Their tribes are shrinking and memberships declining; their hierarchies and bureaucracies too slow and cumbersome.

Arguably they stifle initiative and innovation which hinders adaptation to new circumstances.

Our political parties were once vital, intermediary institutions between the people and the state. But in some parts of the country they have become so disconnected from society that they can no longer fulfill this role properly.

The erosion of organized democratic politics has left a void that has been filled by the state. It is a state shaped by the 1980s ideology of New Public Management with its faith in markets, micro-managing, and measuring.                                                        

It pursues ‘customer satisfaction’ and performance targets, but it fails  to look after the human relationships and trust that are the real value of our public services. Its risk averse, tick box culture crowds out initiative and innovation, and reduces individuals to statistics and outcomes.

Our politics has evolved in its image.

Top down and managerial.

Westminster mirroring Whitehall.

Policy making follows the example of the rule making elite within the civil service.

The government front bench is organized around Whitehall’s bureaucratic silos.

The opposition front bench matches the government front bench.

The system suffers from inertia.

It has created a political class that has retreated into the state and finds itself estranged from society.

Mike Bracken, the Executive Director of Digital in the Cabinet Office, said in his speech here in October, ‘ In our digital age, traditional policy making is largely broken’.

It is ‘slow, inflexible, unnecessarily complicated, afraid of technology and afraid of change.’

Policy is made by theory and too often government can’t deliver it in practice.

Government Ministers from all parties have been addicted to ‘Big Bang’ policy announcements.

They have frequently ended in failure at huge cost to the tax payer.

Think of  a few of the better known examples.

The Millenium Dome – cost £789m

The Home Office ‘Immigration Case Work’ system  – cost £350m.

The abandoned NHS IT project digitalising patient records – cost up from £6.8bn to £10bn and rising.

Universal Credit – costs up from £2.2 bn to £12.8 bn

Cancellation of the e-borders contract with Raytheon cost £223.5m on top of £259m that was written off.

I could go on – the plan to sell off our forests, the stop start NHS reforms, the misallocated franchise award for the West Coast mainline – but the lessons are clear.

Our top down and mechanical public administration is out of touch with the everyday lives of large sections of the population.

It lacks the skills to deal with the private sector, it doesn’t create good quality public services, and it cannot cope with the complexities of todays social  problems.

These failures are compounded by its approach to digital technology.

The British State has the institutional and data architecture of  the pre-digital world.

It has spent 15 years building a digital infrastructure by outsourcing it to giant IT firms.

They digitalised existing, pre-digital processes without improvement or reform, wiring up each departmental silo, and locking government into multi-year contracts that became another expense.

Productivity increases were zero.

In 2013 £4.13 bn was paid to just 6 foreign suppliers.

In the heart of government we have created an inefficient, and out of date infrastructure of incompatible websites and data bases.

Hugely expensive to run.

Frontline staff  overwhelmed.

Citizens confronted with an obstacle course of form filling.

Those most in need sent from pillar to post.

Dr Frankenstein dreamed of the mystery of creation, and built a monster.  

We need a new way of governing our country that recognises our more federal union and which gives English, Scottish and Welsh people a stronger  voice and more control over their lives.

And we need a new model of the state to do it.

There are no magic fixes, but for the first time in history we have the technologies to help us achieve it.

I have taken two lessons from Labour’s Policy Review.                

The first is that politics across our Union is about power and control.

People are asking: ‘Who controls our country, who has power and who doesn’t?’

What is the price people pay for being powerless?

And the second is that the old model of party politics in which things are done to and for people, rather than with and by them, is part of the problem.

It does not now know how to answer these questions.

We will not build a better system of government with the old politics of command and control.

Nor by simply making demands on Whitehall for more spending.

The machinery of government needs redesigning.

And to make this happen our political parties will need to reinvent themselves or become increasingly irrelevant.

The traditional tools of policy making – money and top down government regulation – stifle peoples agency and initiative, and are too often ineffective.

Politicians need to be convenors and organisers, using our power to bring people together to help them find solutions to the problems they face.

Instead of imposing change on communities we need to use their insights and experience to find out what works.

Reform will be about campaigning and changing people’s behaviours.

And we need to genuinely involve those who will be affected, not offer them a tokenistic form of public consultation.

The policy world is buzzing with new ideas about how to define problems, and develop, design and test policy solutions in and with the public.

Our political parties have to open up and create networks to connect with the great array of small scale innovations in society that are pioneering new directions for policy.

This future represents a powerful challenge to my party.

Historically, our instincts have been to centralize, conform and control.

But we have made a start on the journey.

If Labour wins in 2015, we will introduce the biggest devolution of power to our cities and county regions in 100 years.

Our New Deal for England will push decision-making over transport, housing, regeneration, infrastructure and elements of welfare and public services closer to the communities they affect.

It will begin a dramatic redesigning of the British state and the economy.

A system of regional banking to bring capital to the regions;

Vocational education and skills training tailored to the local needs of business;

Public services that give individuals and communities more power and control over their design and delivery:

supporting people who need care to live independently;

helping troubled families help themselves to turn their lives around;

making sure every child has a good start in life with early years intervention and quality childcare.

And more community control:

over our high streets and local policing,

over homes for our sons and daughters and the places they are built,

and over our local transport and investment.

Devolution doesn’t end at town halls.

We want people to have a voice in their neighbourhoods and workplaces and that means pushing power and responsibility down to communities and individuals.

For example in Wales and England we will give football fans the right to sit on the boards of their football clubs.

It’s a politics that will lend people a helping hand, but it will also ask more of them.

Hilary Benn calls it ‘local power for local places’.

It enshrines the principle of subsidiarity and sharing power and responsibility in Labour’s statecraft.

But for devolution to really work we need big change in Westminster and Whitehall.

Renewing the United Kingdom  will require  a new model state for democracy and innovation.

I don’t mean just bolting onto the existing one.

 I mean let’s build an entire new digital machinery of government alongside the existing state so that we can create an efficient system and transform the relationship between the citizen and the state.

Digital technology provides us with the practical means.

We just need the politics and the leadership to get on and do it.

According to Government figures it will save us £1.7bn a year just moving offline services online.

I  don’t underestimate the scale of change.

It requires the wholesale reinvention of the way government operates.

And it means a civil service which has digital DNA at its core – a DNA which puts the needs of the public first.

With the size of spending cuts to come we literally cannot afford the status quo.

And at some point in the next 10 to 20 years every developed economy will have to reinvent the state to be truly digital.

Over the next few years our largest government IT contracts will come to an end.

If we want better public services and a more responsive, efficient state AND substantial cost savings, this is the way to go.


How do we start?

Francis Maude and  the Government Digital Service (GDS) have already made a start.  Maude describes two roads to transformation. 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.                                                        

Labour will take the high road.

Charlie Mingus, the great jazz bassist, once said: ‘Anyone can make the simple complicated, creativity is making the complicated simple.’

Simplicity matters.

No more big bang policies.

We copy the internet.

We build networks of modest achievements rather than grandiose projects.

Digital reform means human-scale communities in control of their own services, continually able to make small, focused improvements.

Policy making means experimenting to see what works in practice.

Investing to prevent social problems at source.

Collaborating to save duplication.

Give the keys to a new generation of digitally-literate civil servants.

Try a new feature,  watch and see what happens.

Rapid, small steps of change.

If it works, use  it.

If it doesn’t, think again.

Put the front-line staff and the people who use the services in control.

Let them work together to decide what improvements to make, and how best to use their resources.

People stop being cogs in a machine and they start driving it.

Services will get designed by people who actually work on them and use them.

Adam Lent of the RSA calls it, ‘Small is powerful’.

Amazon and Google did not start with £billion pound budgets.

They started small and cheap.                                          

They ran fast, and they proved their value as they grew.

In technology a shortage of budget spurs innovation.

A new model of government should do the same.

Breaking down silos means breaking out of Whitehall.

In digital, ‘local or national’ , ‘centralised or decentralised’,  are false dichotomies.

We need to think in terms of  federated government.

Networked government. 

The Government Digital Service (GDS) can foster a distributed network of peer institutions in our cities, networked together to become greater than the sum of their parts.

Our cities were at the heart of the first industrial revolution, and they will drive the digital revolution.

GDS city nodes will focus on transforming services in their city regions, but they could also specialise in one aspect of a new distributed UK government platform on behalf of the nation.

For example, Birmingham could run the pan-UK digital platform for social care, Manchester planning, Swansea motoring, Newcastle tax, Liverpool pensions.

Already there are examples of collaborative procurement using this hub and spoke model.   GDS, Crown Commercial Services and the Commissioning Academy can provide support

Improving services will mean that the people running them – the ministers, senior civil servants and Permanent Secretaries – will need to be close to deliverers and users.

In the pre-digital era we needed departments in Whitehall because we moved files around on trolleys.

We don’t now, which means we can bring government closer to the people.

Building government as a network means also  introducing shared platforms for local government for collaboration of local services and agencies, and data sharing.

Digital government is do-able.

The benefits to people’s lives will be huge. Here are 5:


1. Big savings in operational expenditure.                               

Digital government is cheaper government.                     

It will cost a fraction of the up to £7bn a year we spend just running our current IT system.

The new G-Cloud procurement system is levelling the playing field for 1000 smaller suppliers. It has already made 50 per cent savings on IT purchases. The £80 million government spent with the six big foreign IT suppliers in a single week in 2013 compares to £87 million spent with 270 firms through G-Cloud over the entire year. 

One example:  DCMS has used an open source UK SME, and cut its  intranet cost by 90 per cent.

2. Serving the needs of the public, not the convenience of government.                                                        

Digital makes services simpler.                                   

The new Individual Electoral Registration has a 92 per cent user satisfaction rate, with most finishing in under 3 minutes.

The new prison visitors online booking system gives a choice of three potential dates when you can visit a prisoner. Most people book a slot from a smartphone.

And digital creates new services like changing address, offsetting tax/benefits, and real time VAT.


3. Speeding up the policy feedback loop.                     

Digital allows people to feed back on services quickly and simply.                                                 

It makes sure their voices are heard and it provides an incentive for staff to improve.

For example the organisation Patient Opinion allows people to tell their story – good or bad – about their local health service.                          

And it is about to launch Care Opinion which will give carers a voice and the chance to share experiences.

This is people power which can hold services to account and create real-time improvements cutting down on the huge costs of failure demand.                     

And staff gain too.                                            

Fareham Council, working with John Seddon, has just given their staff a pay rise based on savings created by system redesign and reducing failure demand.


4. Digital can create people power.                       

 It can bring people together so that they can build new friendships and new communities, and make their voices heard.

There are countless groups like Carer watch , the Able Here Community website, Nottingham’s Circle for older citizens, and Leicester’s Community Arthritis Self Help, who provide a digital lifeline of friendship and community to people who might be feeling isolated and powerless.

And it works for the staff of services. Patchwork set up by Dominic Campbell allows professionals working in child protection to keep in touch. Individuals and agencies working on the same case are joined up and communicating.


5. Transforming government silos into platforms.

Silos are hierarchical, inward looking, and closed bureaucracies. Platforms are core digital infrastructures that provide standardisation and open data for innovation and the integration of new policies and services.     

Gov.UK is a platform for all government with  6-8000 people publishing on it. Changing policy does not require the kind of multi-billion pound overhaul created by the introduction of Universal Credit.                  

Government takes the shape of a network of platforms rather than a bundle of individual silos. Better communication, more collaboration and sharing of data between services, more efficient, and simpler for people to use.


How about a Digital Charter- a modern Magna Carta?

Digital technology alone will not create a fairer society.

It will not shape public services to individual need.

It is how we harness technology that matters. We can create a more democratic and connected society, or we can allow it to lead to a more authoritarian, contact-less world.

As my colleague Chi Onwurah says, ‘Digital can create social value if more people can take part in the digital revolution’.

We want digital power to be about people’s power.      

I’ll end with 3 political priorities for a digital revolution that will put people first.


The first priority is digital inclusion

Digital government won’t improve society if we don’t include everyone.

21 per cent of the UK population, 12 million people, lack  basic online skills.

The majority are  amongst the poorest in society.

80 per cent of government interactions are with this section of society.

The Tinder Foundation calculates the cost of achieving 100 per cent digital inclusion by 2020 is £876m, split three ways between government, the voluntary and private sectors.

Liverpool’s community based campaign for digital inclusion which has reduced the proportion of its citizens unable to use the internet from 29 per cent to 17 per cent.

And lets support the fantastic  growing network of volunteer run Code Clubs teaching  9-11 year olds to write code.

That’s the way to increasing digital social mobility.


The second priority is Open Data

Digital Government won’t be more transparent and accountable unless there is open data.

Public sector data is not a government asset it controls but, with necessary exceptions, it belongs to the people.

Releasing public sector performance data as open data enables those outside established policy making to identify problems. HEFCE have published data on HE participation by ward revealing much more precise information to target problem areas school by school.

And it offers innovation and business benefits.

The Ordnance Survey database is the most visited public sector database in the world and makes it fast and cheap to establish a map based start up service.

The Open Data Institute, founded by Sir Tim Berners-Lee and Sir Nigel Shadbolt   is a world leader in unlocking the power of big data to spread knowledge and to tackle local and global issues.                                

Two of its start ups are:                                          

The Spend Network,  a repository for Government transaction data providing both buyers and suppliers with an insight into government spending;                                        

And Open Corporates, the largest open database of corporates in the world, bringing some transparency and accountability to the business activities of these powerful organisations- re-imagining the notion of corporate citizenship.


The third priority is digital democracy

Digital government won’t give people more control over their lives unless it’s trusted with citizen’s data.

Right now, it’s not proving itself worthy of that trust. There are too many mishaps and too much confusion.

We need a Digital Charter which will protect individuals and establish their rights over their own data and digital identity.

And because we will need to share data between services we need new government institutions to manage these large, sensitive datasets.

Get this right and we can make a simple offer to everyone  – if you’ve already told one bit of government something about you, you shouldn’t need to tell any other bit of government the same thing.

And we can balance that with a simple promise – no bit of government will get access to the data you’ve given without your explicit consent.

If we establish this basic framework we can kick start a ‘big data’ economy in the UK.

In 1963 Harold Wilson defined Labour as the party of the ‘white heat of the scientific revolution’.

To change society a technological revolution requires far-reaching changes in all our social and economic attitudes.

The digital revolution is Labour’s opportunity to renew  our country and shape the future.

Transform our own party and lead the change to democratise our political system.

Build a wealth creating economy of decent jobs and new opportunities for everyone.                                                                 

Design responsive and efficient public services with staff and people who use them, and put relationships at their centre.

Share power and knowledge with people to help them to help themselves.

This is big reform and big saving, not big spending.

It is part of Labour’s history. We grew out of the popular movements of self-help and self-improvement.

And it is Labour’s future.

Because we win – we only win- when we are the party of hope and modernity.

Thank you.