Government shares calculation for £45 billion annual savings from digitisation of public sector

• Read the letter from the Department of Science, Innovation and Technology
• Read the letter from Chair Chi Onwurah MP

This follows a request from the committee’s chair, Chi Onwurah, for the government to provide a full breakdown and details of the methodology behind this estimate, for scrutiny as part of the committee’s inquiry into plans for a digital centre of government.   

In response, the AI and Digital Government Minister, Feryal Clark, provided the committee with a methodology note that outlines the approach.   

The previously unpublished note confirms that £36 billion of the £45 billion estimated saving could be achieved by simplifying and automating delivery across the public sector. However, it reveals that this figure was arrived at by extrapolating across the entire public sector findings from a previous analysis that only covered central government, the NHS, and police personnel.  

The analysis also assumes the “lower bound”, or minimum potential productivity saving, is 15% and the document confirms that “productivity gains are calculated using the assumption that 100% of routine tasks and 10% of non-routine tasks can be automated.”  

The government does acknowledge in the note that this is “an inherently complex research question to attempt to quantify” and warns that the estimated savings “do not have a specific timeframe for realisation, but they are anticipated to be realised over the long term”. It also acknowledges the “system challenges” associated with delivery.  

Chair comment 

Chair of the Science, Innovation and Technology Committee, Chi Onwurah, said:   

“The prime minister, cabinet ministers and official documents have all cited £45 billion a year as the saving that digitisation of government services could provide. The committee has secured clarity for the first time on how this number was calculated.  

“We welcome greater transparency regarding the government’s methodology and estimated savings – though we are concerned that no time frame is given for achieving them, and that they are partially informed by extrapolations and assumptions.    

“The committee will be examining the feasibility of these estimated savings and will be seeking further clarity on the as-yet unconfirmed timeline for delivery as our inquiry into the Digital Centre of Government continues.   

“All too often, governments have failed to deliver promised public sector technological transformations. Given this government's strong public commitment to such large savings, it will need to learn lessons from these past failures and ensure that digitisation delivers for the taxpayer.   

“I welcome the commitment to publish peer reviewed findings building on this initial analysis and look forward to questioning ministers and officials about the methodology behind this striking £45 billion estimate, as well as their plan for delivery, as part of our inquiry.”  

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