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Report of the Digital Government Review

Creating Better Outcomes by Building Digital Partnerships

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Introduction: spending money to create the right outcomes

Governments need to buy things from suppliers – be it staplers, pens, paper, telephones, computers, electricity, bricks, roads or hospitals. Government does not build these things itself it buys them in from the outside. It does this because it can be the best way of delivering services. Why would government own a pencil factory and make its own pencils when instead it can buy it from a firm that specializes in making pencils?

In the world of digital government, those services could be commoditized items such as a desktop computer, a telephone, an Internet connection, cloud hosting or a desktop productivity application. Staplers, pens, paper and electricity are similarly commoditized – they are easily described and bought in simple, well-described units: one hundred pens, one hundred telephones, one hundred computers, or one thousand units of electricity to power the computers for a year.

The services that a digital government buys can also be more complex such as a new website, user research or a payroll application. Sometimes government might choose to do these things themselves: sometimes they might choose to buy from someone else – because of capacity or particular skill requirements.

These purchases cannot easily be described in units. They need a more developed and informed discussion between government and the supplier to come to an agreement on what is being bought and how it is being delivered. With a selected supplier this discussion will continue all the way through until the delivery is completed, for example for the full life of a payroll application or website.

Procurement is the term used for the overarching process that includes the act of buying things from suppliers. Procurement typically also includes activities such as training for staff, along with activities between buyers and suppliers such as market research, negotiation, frameworks and vetting.

These activities are intended to help people who are making the buying decisions to make informed decisions and get better outcomes from the process, to be able to satisfy the needs of the people that we are providing public services to.

These external suppliers (whether they be private or third sector, large or small) can be seen as part of the public sector’s delivery capability.

It is vital to spend this money in an informed and effective fashion. If we can reduce this external spend, just as if we can reduce the internal spend, then this frees up money to be spent in others areas such as improved frontline services and improved digital inclusion.

As well as spending this money more cost-effectively, this chapter will consider how the money spent on digital technologies can be used to support desired outcomes. All political parties have expressed a desire to spend more money with smaller firms to increase innovation and create more economic growth. Labour has committed to creating a Small Business Administration and support to assist with this challenge [153]; and is also committed to support social enterprises.

How can we spend more of the digital money with both small firms and social enterprises? Can digital help other areas of government spend more money with these organisations?

“Procurement processes are still hugely more time- and resource intensive than for the private sector: procurements which take literally minutes for the private sector can take weeks or months for the public sector.” – Small Company


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