Service transformation: A better service for citizens and businesses, a better deal for the taxpayer

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Foreword by Sir David Varney

Our economy is dominated by the service sector, which has undergone considerable change over the past decade. Technology has enabled a revolution in the way service providers interact with their customers. These changes are continuing as citizens and businesses seek better value for money and greater convenience.
There have been significant improvements to public service delivery over recent years. The Government's programme of investment and reform has delivered real improvements in the way that services are delivered, many of which are highlighted in this report. However, social, demographic and technological changes continue apace and there are increasing challenges to keep up with the best in the private sector. Differences between the public and private sector are likely to grow over the next decade unless public sector service delivery is further transformed.
The Government historically delivers services through departments. The department might deliver the service directly, through agents or agencies, alone or in cooperation with local government. Each solution is a child of its time and circumstances, with little over-arching view of the Government's relationship with the citizen. Thus, I have found that departments which provide services focus predominantly not on the citizen, but on an aspect of the citizen called `the customer'. This allows the department to focus on the delivery of their service -- a transactional relationship.
The end result is that the citizen who needs multiple services is left to join up the various islands of service to meet his or her needs. As departments do not appear to accept each other's identification of the citizen, the citizen has to validate his or her identity at each service transaction. This model of service provision is underpinned by a mass of helplines, call centres, front-line offices and websites. A similar situation applies to interactions with business resulting in business being required to provide the same information to many parts of government.
The leading edge of the new service economy that has emerged is much slicker, more immediate, more convenient to the citizen and less intrusive on the busy citizen's time. The focus is increasingly on the totality of the relationship with the citizen.
Today there are excellent examples in the public sector of entities cooperating to give citizens and businesses a better service. These need support and encouragement and we need to grow and emulate their achievements across the whole of the public service sector. The existence of these programmes is encouraging, but a much more fundamental and widespread change is necessary if the public sector service economy is to match the performance of the best service providers. My report lays out the steps we can take in the 2007 Comprehensive Spending Review to lift substantially our service performance in interacting with citizens and businesses.
We need to continue to follow international developments and learn from other countries' experiences of creating a more responsive and integrated public service. However, the experience in the private sector indicates that organisations when faced with the choice between incremental improvement of today's business model and tomorrow's -- frequently choose today's. This reflects the ability of today's business operator to demonstrate how more resources can deliver a better result. Tomorrow's business model adherents often struggle to provide such clear evidence. Yet business history demonstrates the demise of many organisations whose adherence to today's model meant they lost touch with their customer base. If the public service is not transformed then we can anticipate much less effective and more expensive delivery and more citizens put off by the indifference to their needs. We need to remind ourselves that it is often the most vulnerable parts of society that are most put off by this.
My hope is that the UK's public service will respond to this report and create a world-class public service economy. Other governments faced with the issues described above have decided to impose structural change to deliver better public services, such as building new departments for citizen and business facing services. Although I do not favour this approach at present in the UK, I recommend that progress in other countries is kept under review and used to test the progress of our transformation. If we show signs of lagging behind then these structural change alternatives need reconsideration.
This report was compiled with considerable assistance from individual public servants in both central and local government. I was additionally assisted by a consultative committee of individuals who all provided advice. I am indebted to them all and to the small team in HM Treasury.
Sir David Varney

Executive summary

In the 2006 Budget the Chancellor asked for advice on the opportunities for transforming the delivery of public services by looking at how the channels through which services are delivered can be made more responsive to the needs of citizens and businesses.
Since 1997, the Government has undertaken a comprehensive programme of public service reform. This has focused on tackling under-investment in key public services and aimed to bring public services in the UK up to the best level available internationally. The reform programme has been designed to raise standards of service, reduce inequalities and increase responsiveness to users and is supported by many innovative projects across central and local government.
Much has been achieved in the past decade. Compared to 1997, the government is now providing more services online or through comprehensive telephone contact centres -- allowing citizens and businesses improved ways to access government. Access to NHS Direct Online has grown by 74 per cent comparing this year to the last. In transport, citizens can now apply via the Internet for provisional driving licences and vehicle registration at any time. By the end of September 2006, 3.7 million motorists had renewed their car tax online.
However, the world is changing rapidly, with new challenges emerging that must be addressed. Citizens and businesses increasingly see their time as a limited resource. They rightly demand that their interactions with public services deliver value and that problems are resolved first time. Despite the considerable strides and innovations that have been made, there is more to do to ensure the delivery of public services keeps pace with the best of private sector service delivery, particularly in the use of technology and 24-hour, seven days a week services. New technology offers the potential to facilitate collaborative working. The Transformational Government strategy has set the scene for transformation of contact with citizens and businesses, including increasing the focus on the user of public services and making the most of technological advances.
This report focuses on the opportunities for change in the channels through which services are delivered to citizens and businesses. Over the next ten years, there is an opportunity to provide better public services for citizens and businesses and to do so at a lower cost to the taxpayer. Realising these outcomes will require citizen and business focused transformation that should see citizens having single points of contact with government to meet a range of their needs and businesses having to provide information only once to government. In addition, providing joined- up services designed around the needs of the citizen or business will yield efficiency savings by reducing duplication across the public sector. This ought to be the public service aspiration for Government.
This review builds on the reports published by Sir Peter Gershon and Sir Michael Lyons in 2004, which address efficiency within public services. The focus of these earlier reports was benchmarking performance across departments and joining up back office functions. The focus of this review is how to save government, citizen and business time and money by examining the scope for integrating front-line service delivery.
The history of public services has led to departments or agencies focusing on the supply of specific products rather than taking a citizen or business-led approach. Departments' and agencies' services are all developed independently of each other. It is leaving the citizen or business to join up the public service island economy to meet their needs. For example, this review found a typical case in which a citizen needed to contact government 44 times following a bereavement.
It is often the most vulnerable citizens who have to do the most joining-up between the public service islands and much of it could be avoided with more collaborative service delivery. The situation is similar for businesses, often needing to provide the same information more than once. This is the primary reason the Government is planning to set out in law the `Hampton Code of Practice' as published in draft at Budget 2006.
Service transformation is not about further increases in public spending or investing in new technology. Building on the work done in the 2004 Spending Review on efficiency, there is an opportunity to coordinate services more directly around the needs of citizens and businesses and to deal with more problems at the first point of contact. In the 2007 Comprehensive Spending Review (CSR) this approach could drive out efficiencies by improved performance and coordination of front-line e-services, contact centres and local offices and reducing duplication of business processes through shared use of an identity management system. Over the longer term further efficiencies and service enhancements could be made by reducing the back office functions that would no longer be required.
Chapter 1 of the report sets out more information about the case for change and the potential for savings to government, citizens and businesses.
Fully transforming the channels for public service delivery is beyond the timeframe of the 2007 CSR. It will require a radical improvement in the level of collaborative delivery across the public sector. Chapter 2 of the report sets out a long-term vision for service transformation over the next ten years, including what steps can be taken more immediately.
Building on the achievements of the past decade, the review's analysis points to the key changes that are required across government channels to focus on citizen and business needs:
Chapter 9 of the report identifies the key next steps to be taken to deliver a service transformation programme.
To lay the groundwork, a number of actions are required for the 2007 CSR, including:
A full list of recommendations is at Annex A. Note: We only include here the foreword and introduction and then jump to section "9: The Next Steps". The cut sections are available in the original document.


Achieving the service transformation programme in full will require a fundamental shift in the way government goes about its business. But the scale of the work should not deter us. Provided a cross-government framework is put in place now and some innovative services are set in train to act as a stimulus for further transformation, the benefits will start to flow. Detailed delivery planning with departments and local authorities on service transformation is still required, in line with the development of 2007 Comprehensive Spending Review (CSR) delivery plans and the associated performance management framework. The key steps that should be taken and the potential outcomes that could be achieved are set out below.

By April 2008

Within the next eighteen months, the cross-government framework for delivering service transformation should be put in place and the full delivery plan for the programme should be agreed. Some transformation pilots could be working and delivering real benefits. By April 2008, key outcomes include:

By early 2011

The results of early transformational change are evident to citizens and businesses. A core of departments are demonstrating how to provide citizen and business focused services. Key outcomes include:

Beyond 2012

The structure, processes and governance to support service transformation are fully bedded in, with greater consistency and personalisation across a wide range of public services. Key outcomes include:


I recommend:

On the `blueprint for change':

1. setting up in the period covered by the 2007 Comprehensive Spending Review (CSR) a service that will allow citizens to inform government once of their change in circumstances; initially this should cover bereavement, birth and change of address;

On `what citizens and businesses need':

2. the Customer Insight Forum continues and further promotes its important activities -- but that its focus is to be more clearly about the citizen and business perspective (and is renamed as the Citizen and Business Insight Forum);
3. every department be required to appoint a Contact Director to carry overall responsibility within that organisation for creating and exploiting insight as a strategic asset;
4. the Government approve principles for government channel management and apply them rigorously and consistently across all departments and agencies;

On `levers for change':

5. establishing and taking forward a service transformation programme with an associated published delivery plan as one of the Government's top priority outcomes for the 2007 CSR period;
6. there is regular monitoring of progress on the service transformation programme and that there is a much greater use of benchmarks to judge how departments are performing;
7. performance against the delivery plan is made public, on at least an annual basis, so that citizens and businesses can judge how public services are changing;
8. overall responsibility for the service transformation programme is led by a Cabinet Committee, chaired by a Cabinet Minister, with representation from key departments involved in the programme;
9. specific Cabinet Ministers be given responsibility for particular cross-government areas of transformation;
10. establishing the capability for a change of circumstances service should be led by the Department for Work and Pensions (DWP), working closely with HM Revenue and Customs (HMRC), the Department for Communities and Local Government and the Home Office;
11. service transformation should be led by the Cabinet Secretary, supported by the Permanent Secretaries Steering Group and a secretariat provided by the Cabinet Office Delivery and Transformation Group;
12. each department should be asked to appoint a professional head of contact (a Contact Director). These Directors should be invited to sit on a cross-departmental council -- the Citizen and Business Contact Council;
13. the Chief Information Officer Council develop technology delivery plans that standardise contact systems and supporting facilities and infrastructures;
14. Government provides support for service transformation pilots as part of the 2007 CSR, for example through the provision of start-up or match funding;
15. to firmly bed in changes that arise from pilots and to ensure ongoing investment is available for expansion of initiatives, Government should require departments to develop plans for service transformation as part of their 2007 CSR delivery plans;

On `information management':

16. the data sharing strategy to be developed by the Ministerial Committee MISC 31 should address impediments to sharing identity information and how these should be resolved to enable improvements in service delivery;
17. Government should extend experience from the proof of concept project between DWP, HMRC and 12 Local Authorities to test the concept in other parts of the public sector in 2007≠08;
18. the Government's Chief Information Officer Council complete their work on aligning the use of government strategic assets, such as the Government Gateway, Government Connect and other key systems;

On `e-services':

19. Directgov and funding be put on a more secure basis within the 2007 CSR to develop them as fully transformed services;
20. in the 2007 CSR, the Government investigates a funding arrangement for Directgov and that puts these services on a stable financial footing, incentivises departments to contribute to services that secure cross-government benefit and allows for the expansion of functionality of these services;
21. sponsorship and leadership rests with the Secretary of State for Work and Pensions for Directgov and the Paymaster General for;
22. government establish a clear performance indicator for citizen and business facing website rationalisation, which focuses on establishing firm targets to reduce progressively the number of websites over a three year period. In particular rationalisation targets should include:

On `contact centres':

23. all taxpayer funded contact centres are required to undergo formal published accreditation by December 2008;
24. the Citizen and Business Contact Council be tasked with approving a standard blueprint for public sector contact centres;
25. public service contact centres should secure 25 per cent improvements to current operations during the 2007 CSR period, while also raising the quality of services provided to citizens and businesses;
26. the establishment of performance indicators and targets for contact centre operation based around the objective of at least 25 per cent reduction in costs by the end of the 2007 CSR, which could include:
  • 80 percent of contacts made by citizens or businesses to be resolved on first contact;
  • 50 per cent reduction in avoidable contact;
  • reducing the number of information requests handled by telephone by 50 per cent;
  • making the Web the primary access point for all simple information and advice requests;
  • converging all public sector telephony charges to a single tariff; and
  • requiring all sub-200 seat contact centres to share their service with others;
  • 27. the establishment of best practice performance indicators and benchmarks to assist contact centres to perform to the level of best peer performance in the public sector;
    28. the public sector should explore the scope for a single access number nationwide for all non- emergency public services, to provide a complementary support for 999;
    29. improving immediate access to public service departments and agencies and then to rationalise telephone numbers by:
    30. public service contact centres seek to better coordinate services around common citizen and business themes, starting with a single contact service for change of circumstances;
    31. Government explore the scope for providing more coordinated helpline services;

    On `face-to-face' services':

    32. Government continues to improve the level and quality of data it collects on its asset base through implementation by the Office of Government Commerce (OGC) of their High Performing Property Route Map;
    33. the service transformation programme delivery plan should include the use of benchmarking information about the usage, cost and outputs achieved from departmental face-to-face service provision;
    34. the proposals for improved collection of data be used to inform when it is appropriate to use face-to-face provision and when channel shift should be encouraged, in line with the proposed channel management principles;
    35. the establishment of more cross-government one≠stop-shop services. These should develop into locations where the whole of a `theme' can be transacted, covering both central and local government, starting with the change of circumstances service;
    36. government continues to encourage the development of joined-up services across local authorities, in line with proposals in the recent Local Government White Paper;
    37. the implementation of a cross-government estate management strategy, through the active adoption of the OGC's High Performing Property Route Map. This now needs to be implemented within the overarching service transformation delivery plan so that departments can be assessed on how they are using their face-to-face estate;
    38. central and local government bodies plan to increase the proportion of effective mobile services and that this is included within the service transformation delivery plan with progress reported annually; and
    39. central and local government work together to facilitate and increase substantially the use of third sector intermediaries in improving public services.
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