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The UK Government Digital Service (GDS) has published a new framework providing “evidence and analytical methodologies” to make the case for investment in digital and data tools and capabilities.

The guidance is aimed at those writing business cases as well as decision-makers. It notes that benefits can include productivity gains; improved user experience; reduced contractor spend; avoided cost by preventing cyber-attacks; and savings from moving transactions online.

The Digital and Data Benefits Framework covers five key areas: artificial intelligence; service transformation; data; capability; and technology, cyber and interoperability. Each section includes a ‘size of the prize’ analysis of potential savings and benefits, a methodology for quantifying the benefits of interventions, and case studies.

Read now: Rewiring the state: Unlocking government transformation, a Global Government Forum study led by former Cabinet secretary Lord Gus O’Donnell and based on interviews with 12 UK permanent secretaries.

AI benefits

On AI, for instance, the framework cites recent analysis by GDS which found £6.3bn (US$8.5bn) in potential annual savings through the use of AI, including £1.1bn of potential cost reductions (5.3% of estimated salary spend) and £5.2bn productivity gains, equating to 5.2m working hours. The analysis used a large language model to analyse 200,000 job descriptions for civil service posts, identifying over 1.5m individual job tasks and providing a score of each task’s potential for augmentation or automation by current AI tools. Beyond the civil service, previous analysis by GDS estimated the total impact of AI and automation on the wider public sector at £23.7bn (US$32bn).

To quantify the benefits of AI in productivity terms, the framework suggests a structured approach, starting with identifying the job roles that will be impacted by the AI intervention; assessing the tasks within these roles that AI is likely to influence, focusing on automation or augmentation; estimating the time currently spent on these tasks using sources such as the Office for National Statistics Time Use Survey, departmental surveys, or reasonable approximations; and applying average salary data to estimate cost savings or productivity gains.

“In extreme cases,” it says, “this productivity gain could be considered instead as FTE [full-time equivalent] reductions, for example if the introduction of an automated chatbot meant the closure of a call centre.”

For more in depth analysis, GDS has designed “an end-to-end ‘plug and play’ methodology”, which is available on GitHub and can be used by departments to create their own version of the ‘size of the prize’ analysis.

The framework also suggests a methodology for quantifying AI’s benefits related to reduced human error, reduced waiting times, new services, 24/7 access to services, and reduced incorrect rejection and acceptance rates.

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Investing in digital capability

On capability, the ‘size of the prize’ analysis notes that of the £26bn (US$35bn) UK public sector digital and data spend in 2023, less than 20% (around £5bn) was on permanent public sector staff while 55% (£14.5bn) was spent on contractors, managed services providers, and IT consultants. The average contractor in central government costs three times as much per year as the average civil servant, GDS said.

Alongside this, the analysis states that “there are not enough digital and data people in the right roles” and “the public sector struggles to attract and retain top talent” in digital positions.

The framework notes that “capability is linked to many elements of digital and data delivery. This creates difficulties for appraisers in avoiding double counting of benefits and challenges around monetising benefits realised at different stages of an intervention’s value chain”.

It says that: “The primary benefit of digital capability is enabling and enhancing delivery and supporting other initiatives, including AI, data, technology, and services, by equipping individuals and organisations with the skills, tools, and processes needed to adopt digital solutions.”

The guidance outlines potential benefits of investing in digital and data capability, such as reduced contractor spend, reduced failure rate, improved effectiveness via training, and reduced reputational risk and increased trust, and suggests methodologies for estimating some of these.

Short case studies include how the UK’s Digital, Data and Technology Capability Framework helped Companies House to improve staff engagement and reduce turnover, and helped make the Ministry of Justice “a more attractive place” for digital experts.

GDS said that the new Digital and Data Benefits Framework should be used in conjunction with the HM Treasury Green Book – the government’s guidance on assessing the costs, benefits, and risks of different options for achieving objectives.

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