The government could save up to £33 billion a year - the equivalent of £500 for each person in the country – by using public data more effectively. A specialist ‘Data Force’ unit should be set up in Whitehall to start identifying these savings in areas such as tax avoidance and benefit fraud.
A new report – The Big Data Opportunity – by think tank Policy Exchange says that better use of data, technology and analytics could help the government save money by improving efficiency rather than reducing service levels.
The research found that applying cutting-edge data and analytics in the UK public sector could generate potential savings of up to £16–£33 billion a year.
- £13–22 billion from using data to optimise the day-to-day running of government departments and drive up public sector productivity
- £1–3 billion from reducing fraud and error in the benefits system
- £2–8 billion from collecting a greater share of unpaid taxes
The report identifies examples of where and how a more efficient use of public data could lead to tangible improvements in public service efficiency:
- The Home Office could analyse airport queues in real time to anticipate bottlenecks and ensure enough desks are open to cope with fluctuations in passenger numbers. Officials could also look for hidden patterns in historic data and track activity on social media to identify opportunities for performance improvement
- The ONS could save £500 million by abolishing the census and instead combine existing government data sources to estimate the size of the UK population. A "virtual census" based on the electoral roll, council tax register and other sources might deliver acceptable quality and be more up-to-date
- HMRC could collect more unpaid tax by accelerating the use of algorithms to mine data (including tax returns and third party data) and flag cases that need to be investigated to ensure the correct tax is paid. Better management information might also help identify and spread best practice between different tax offices.
The report calls for the creation of an elite ‘Data Force’ which would report to the Prime Minister and have the power to access departments' data, identify inefficiencies and put forward cost cutting solutions. In their first year this team of data scientists would have an objective to identify at least £1 billion of additional savings.
It also acknowledges the tension between extracting value from public data and protecting the rights of individuals who do not wish to be tracked, monitored or singled out. To hold politicians to the highest ethical standards, the government should adopt a "Code for Responsible Analytics" which would bake in respect for privacy and civil liberties.
Chris Yiu, author of the report, "Across the public sector, extraordinary quantities of data are amassed in the course of running public services – from managing welfare payments and the NHS, through to issuing passports and driving licences. Finding ways to share or link this data together has the potential to save time for citizens and money for taxpayers.
"The government will need the capability to conduct analytics effectively, and the courage to pursue this agenda with integrity. This is only partly about cutting-edge data science skills. Just as important – if not more so – is ensuring its leaders are literate in the scientific method and confident combining big data with sound judgment."
For more information contact Nick Faith on 07960 996 233 or at