February 2024


Navigating the digital frontier for local government

By TechnologyOne UK executive vice president, Leo Hanna

Leo Hanna

Local government is facing a perfect storm. Funding pressures and demographic challenges are getting worse, councils are having to pursue modernisation amid economic volatility, and they are still recovering from the disruption caused by Covid-19.  For some, this has been an accelerant to digital progress. For others, a blocker.

We partnered with Financial Times Longitude to survey 500 senior local government leaders across the UK to better understand how local authorities navigate the complexities of the digital landscape. In addition to the government leaders, a survey of 2,000 UK citizens was conducted to gauge sentiment on trust and satisfaction with digital services delivered by local government.

The resulting report, The new digital reality (and how not to get left behind) revealed that to navigate a path to progress, councils seek digital pragmatism – balancing value for money with joined-up services built on robust infrastructure. But to truly engage citizens in this new reality, an innovative digital experience will prove make or break.

The funding trap

One of the report’s key findings highlights a critical issue facing local councils: a gap between digital plans and the ability to fund them. A staggering 63% of councils identify this challenge. The Local Government Association is now warning that an “existential crisis” threatens the entire sector as inflation drives up wages and the cost of providing many services. Councils around the country have warned that they are close to bankruptcy, and some are now controlled by central government because of financial failures.

Unfortunately, this is becoming a recurring theme for local government. The report showed that more than half of local authorities in England plan to cut more services while raising council tax by the maximum possible amount, suggesting this list will only get longer in the months and years to come.

Thirteen years of budget pressures, more cuts expected, and rising resident demand for services amid the cost-of-living crisis are putting significant pressure on councils. It’s clearly time for new thinking and everything should be on the table. Part of the solution is digitisation. Ageing IT systems must be replaced by modern solutions capable of effective planning, budgeting, and forecasting.  

Mission: digital

The report addresses a crucial aspect of local governance – citizen satisfaction with digital services. With only 41% of residents content with their council’s approach, our research shows there’s room for improvement. Unsurprisingly perhaps, the research shows that digital channels are key to enhancing employee productivity and citizen engagement, to meet the evolving needs and expectations of their residents and employees.

So local government leaders know they must find ways to do more with even less. But they are also aware that there is no room for error on IT investment. Local government wants to innovate, and the challenges of recent years have accelerated digitalisation. But ambition must be tempered with realism: digital solutions have to come with genuine and measurable benefits. 

Smart and secure

In an era where cyber threats evolve rapidly, the report exposes a startling reality: 59% of councils have an outdated approach to cybersecurity. Despite the increasing risk of breaches, many local governments lag in adopting robust cybersecurity measures.

As we have seen over the last few years, cyber-attacks on councils are costly for taxpayers and pose a threat to democracy. We believe there is a role for government to provide funding to help local authorities invest in modern IT systems that act as a first line of defence against cyber criminals. This includes helping councils to move away from legacy, on-premise systems and upgrading to  Software-as-a-Service (SaaS) solutions. Systems haphazardly patched together still deliver mission-critical services at local authorities across the country but they need to be urgently overhauled if they are to remain secure. 

If you ask councils whether they would prefer to invest in frontline IT experts or teachers, the answer is clear. But the reality is that the cost of an incident can be catastrophic and have lasting financial impact on a local community. As costs and demand for services rise, modern software solutions can help to ease the burden, freeing up valuable resources when they are needed most.

In a world where digital transformation is no longer a choice but a necessity, local governments must lead the charge. The TechnologyOne and Financial Times Longitude report is a valuable guide for local authorities seeking to navigate the digital frontier successfully. As we stand at the intersection of technology and governance, the path forward requires bold steps and innovative solutions to create better, smarter, and more secure communities for all citizens, ensuring that no one gets left behind in this new digital reality.

The findings of the report will be explored with local government leaders in a series of events around the country this February bringing the stories, insights, and people behind our New Digital Reality report life. To register visit The New Digital Reality Launch Events.

TechnologyOne is a global Software as a Service (SaaS) company. Founded in Australia, we have offices across six countries. Our enterprise SaaS solution transforms business and makes life simple for our customers by providing powerful, deeply integrated enterprise software that is incredibly easy to use. Over 1,200 leading corporations, government departments and statutory authorities are powered by our software.  

Our global SaaS solution provides deep functionality for the markets we serve, including local government and higher education in the UK. For these markets we invest significant funds each year in R&D. We also take complete responsibility to market, sell, implement, support and run our solutions for our customers, which reduce time, cost and risk. 

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