20 June 2018

The public sector needs an automation revolution


The majority of people accept that we need to pay tax. However, we do so on the reasonable expectation that this money will be used to provide high-quality public services.

In reality though, this contract between the public and the state is frequently broken. Hard earned money is handed over, but the standard of service received is not up to scratch. Anyone who has tried to get an appointment with their GP or enquired about council services in their local area can testify to this. A lack of improvement in the quality of services is particularly galling when the tax burden continues to rise.

There is a solution: automation. In our new paper, the TaxPayers’ Alliance calls for a much greater embrace of automation in the public sector. This will result in public services services being delivered in a better and more cost effective way. Not only will this mean that taxpayers get a better deal, but it will also benefit public sector workers, businesses, and the economy as a whole.

Automation is already improving public services around the world. For example, Norway’s Welfare and Pensions Administration (NAV) has automated 65 per cent of sickness benefit claims and payments processing, replacing a manual procedure involving thousands of paper forms. The project has increased efficiency, agility, and accuracy, and had a positive impact on staff. More than 350 employees who previously handled the claims paperwork have now been moved to the front office to help citizens face to face.

Then there is the ChatBot lawyer in the United States. It is helping refugees from around the country to fill out important forms so that they can receive the help they need.

The above examples are just a small selection that illustrate the current versatility and potential of automation to transform the delivery of public services. If the technologies available and on the horizon are enthusiastically embraced by the public sector the standard of services improve dramatically, while at the same time the cost of their provision is substantially reduced.

However, despite the many benefits of automation, it has been less enthusiastically received in the public sector than in the private sector. Many government departments and local authorities are reluctant to automate services due to concerns about job losses. The roll out of automation across the public sector has been disjointed and lags behind the private sector. This has led to public dissatisfaction, with only 29 per cent of people thinking that their council was embracing the opportunities provided by new technology.

The public sector in the UK does not compare favourably with other developed countries in terms of the population being able to access public services electronically, lagging behind many other EU countries and also Singapore, Japan, and Australia.

Introducing automation to the public sector will mean that taxpayers will get to enjoy public services that are delivered to a higher standard and in a more efficient way, at much less expense.

There is huge potential for automation in the public sector. Professors Frey and Osborne at the University of Oxford published a widely-cited paper in which they examined how likely some roles are to be automated. They developed a methodology to estimate the probability of computerisation for 702 detailed occupations, using a Gaussian process classifier. Using this methodology, Deloitte calculated that over 850,000 public sector jobs could be automated, bringing in £17 billion in annual savings from staff costs by 2030.

Therefore, it is clear that taxpayers will be big winners. But it is not just the public who would be the beneficiary of automation. Public sector workers would also benefit enormously as a result. Many of the roles which can be automated are repetitive and mundane. Automating these tasks will free up public sector workers to undertake more challenging and rewarding tasks, either elsewhere in the public sector or in the private sector.

This brings us onto the other winners of automating the public sector: companies in the private sector. There is a real skills shortage in the private sector, and though unemployment is incredibly low, private sector vacancies are high. It is well established that the public sector can crowd out the private sector. As such, automating the public sector will be very good news for businesses operating in the UK. These highly skilled public sector workers who find their role displaced by automation will find work in the private sector where they will help companies to grow.

Automating the public sector will also be great for the wider economy. Productivity, which is the main driver of improved living standards, is sluggish in the UK. There are, of course, numerous reasons for this, including our restrictive planning system, high levels of taxation, and transport congestion. Automation is a key driver of productivity growth. For example, it is estimated that widespread adoption of automation using AI technologies has the potential to increase productivity in the UK by 25 per cent.

What about the negative consequence of all this change? The media and leading public figures frequently paint a bleak picture of a future where there is mass unemployment, rampant inequality and where tech giants rule the world.

Such fears are nothing new. Throughout human history we find some of the smartest and most influential people who have ever lived voicing their concerns about previous types of automation. Aristotle, Queen Elizabeth I, James Joyce, John Maynard Keynes, and President Lyndon B. Johnson all worried that automation would lead to mass unemployment.

However, as was pointed out by Joseph Schumpeter in Capitalism, Socialism, and Democracy – although jobs are destroyed by new technologies, they are replaced by new ones. It is this creative destruction which disrupts industries and destroys jobs, but which ultimately creates new, better jobs, and grows the economy.

The government should push for a rapid increase in the pace at which public services are automated. The public, people working in the public sector, businesses, and the economy will all benefit as a result.

Ben Ramanauskas is Policy Analyst at the Taxpayers' Alliance.