Written evidence submitted by Vodafone UK (DCG0007)

Vodafone UK Response to Digital Centre of Government Inquiry

Introduction

Vodafone is a leading British company having grown from being a start-up in Newbury 40 years ago to providing mobile and fixed services to18 million customers in the UK and are a major employer across all four nations, including in over 400 retail stores. We are eager to support the Government’s mission to kickstart economic growth. Our merger with Three will enable us to invest £11 billion over the next 10 years to deliver nationwide Standalone 5G which will be central in enabling economic growth. Vodafone welcomes the opportunity to give evidence to the Digital Centre of Government Inquiry.

At the heart of our submission is a focus on the transformative effects 5GSA and 5G-enabled technologies can have on the economy and in advancing efficiencies in the public sector and across different industries. We welcome the Government’s plans to centralise GSD within DSIT and digitalisation more broadly. This will open up new opportunities to drive productivity gains that will lead to increased economic growth and better public sector service delivery. The Government should capitalise on the centralisation to coordinate and deliver digital transformation across Government public services to drive long-term efficiencies and unlock spending from such savings.

Importance of Digital Infrastructure

In today's rapidly evolving digital landscape, the importance of robust digital infrastructure cannot be overstated. No digital technology, including artificial intelligence (AI), can function effectively without a strong foundation to support and connect it. This is where the role of digital infrastructure, particularly 5G, becomes crucial. The implementation of 5G technology will serve as the backbone for a myriad of opportunities, driving efficiencies within a centralised digital service, data office, and AI office.

A centralised function for government digitalisation is not just a strategic move; it is a necessity for the future. By consolidating digital efforts, the government can achieve significant efficiency savings. More importantly, this centralisation will lead to the delivery of enhanced public services, ensuring that citizens receive faster, more reliable, and more accessible services.

One of the key benefits of a centralised digital government is the potential for more efficient procurement processes. This will ensure that digitalisation efforts deliver benefits across the whole of the UK, rather than creating a postcode lottery where some areas are more advanced than others. For example, we see this disparity today in the UK's police forces, where some have digitalised and consequently have faster response times than others. A unified approach to procurement will standardise digital advancements, ensuring that all regions benefit equally from technological progress.

The benefits to the UK economy are significant. Firstly, a centralised digital government will streamline operations and cut down on administrative costs. This will free up resources that can be redirected towards critical areas such as healthcare, education, and infrastructure development. Secondly, the enhanced efficiency and reliability of public services will encourage businesses to invest and expand, knowing they can rely on a stable and efficient government framework.

Finally, the integration of advanced technologies like AI and data analytics will enable the government to make more informed decisions, leading to better policy outcomes. This data-driven approach will not only improve the quality of public services but also drive innovation and economic growth. Businesses will benefit from a more predictable and supportive regulatory environment, encouraging investment and entrepreneurship.

Opportunities for Public Services

Digitalisation holds the promise of drastically improving public services by enhancing efficiency, connectivity, and accessibility. By integrating advanced technologies like 5G, public sectors can deliver faster, more reliable, and cost-effective services, ultimately benefiting society as a whole. Here are some specific opportunities for public services:

•                                                                                     Health: 5G technology has the potential to revolutionise the healthcare sector by enabling faster, more reliable, and more efficient communication and data transfer. The NHS could save £1 billion per year, or the equivalent 15,400 full-time nursing posts, through 5G-enabled efficiencies across health and social care settings.
•                                                                                     Policing: Secure and dependable connectivity enables emergency services to respond to incidents quickly and intelligently, keeping our streets safe. With a nationwide 5GSA network, police and other emergency workers will be able to stay connected wherever they go and enable them to submit data in real time, driving efficiencies and freeing up more time to spend with the public, saving officers a collective 11 million hours per year. Individual officers could save around seven days per year, or 17 minutes per day, which could free them up to make one extra daily emergency call out. This could be comparable to freeing up 5,400 full-time police officers for on-the-ground operations and community engagement
•                                                                                     Rail: 5G technology has the potential to transform the rail industry by providing faster, more reliable, and more extensive connectivity. 5G enabled digitalisation would improve connectivity for rail passengers, enabling them to work productively, and add potentially £1 billion per year to the UK economy. 
•                                                                                     Education: Digitalisation in education is a powerful tool for promoting equitable access to learning. By leveraging technology, we can bridge the gap between students from diverse backgrounds, providing them with equal opportunities to access high-quality educational resources, personalised learning experiences, and collaborative platforms. This ensures that every learner, regardless of their geographical location or socio-economic status, can achieve their full potential and thrive in an increasingly digital world.
•                                                                                     Digital buildings: 5G-powered smart city lights could reduce energy usage, save money and reduce emissions: councils could save £700 million over the next 5 years, while emissions could be reduced by one million over the next 5 years, while emissions could be reduced by one million tonnes of CO2 – equivalent to replacing 250,000 petrol or diesel cars with electric. Public buildings across the UK could save up to £580 million per year through reduced energy bill thanks to 5G-powered energy efficiency technologies, equating to savings of up to £350,000 for the average mid-sized town.

Barriers to Adoption

Nationwide Connectivity: Until now, investment in 5G has lagged behind our international competitors, resulting in a significant gap in network quality and deployment. In 2022, the UK was ranked 39th out of 56 countries in terms of active 5G connections among major international competitors. Without strong and reliable nationwide connectivity, entire regions, sectors, and individuals would struggle to adopt innovative technologies that rely on the latest connectivity. The recently approved merger between Vodafone UK and Three UK will create a best-in-class nationwide 5G standalone network (5GSA), backed by a commitment to invest £11 billion in infrastructure over the next decade. This presents a unique opportunity for the Government to implement policies that stimulate growth and encourage widespread technology adoption in partnership with businesses like Vodafone. Currently, infrastructure policy and strategy for telecoms lags behind other infrastructure like housing.

Regulatory and Policy Barriers: The UK has faced regulatory challenges that have slowed down the adoption of new technologies. These barriers can create uncertainty and delay the widespread investment in and implementation of innovative solutions. These include:

•                                                                         Public sector procurement: the lack of ability and impetus to procure technology on a large scale prevents the public sector from leveraging economies of scale and adopting technology at a lower cost
•                                                                         Planning: Streamlined planning processes are essential to facilitate the rapid use of new technologies. However, in the UK the planning process is currently a significant barrier to deployment and the ECC has not been implemented. Telecoms provides must be made a statutory consultee like other utilities so that we can deliver best in class coverage.
•                                                                         Net neutrality: existing net neutrality regulations are undermining investment and innovation, preventing telecoms operators from working with businesses to offer a differentiated slicing product. This is preventing industries from utilising technology where they would benefit from doing so on a bespoke network slice.
•                                                                         OpenRAN:  a relatively new technology with high roll-out costs, presents challenges for the telecom sector. Without targeted support, it is difficult for the sector to implement this technology effectively. 

Skills Shortages: A digitally skilled and empowered population is a significant enabler of technology adoption. The UK has gaps in the skills needed to drive technology adoption, particularly in leadership, IT expertise, and lower technical ability adoption skills. Embedding digital skills training in schools and throughout all stages of education is crucial to the UK's ambition to become a tech superpower by 2030. This includes pursuing transformational technologies like AI and supercomputing to attract top talent and ensuring that digital skills are an integral part of the curriculum for everyone. The current apprenticeship levy does not provide the flexibility to embed these skills at all levels of the careers pipeline. In an ever more digitalised world, cybersecurity skills are increasingly becoming important. Currently the UK workforce, in particular SMEs, lack these skills to combat threats.

Digital Exclusion: across the UK between 15% and 20% of UK citizens, children or households are affected by limited digital access. Without a clear strategy to address this issue, these individuals will not experience the benefits of digitalisation. We welcome the upcoming cross-Government digital inclusion strategy.

Recommendations 

•                                                                                     Strategic Procurement: Government procurement policies can play a significant role in driving technology adoption. Government should assume that public services will be delivered digitally by default, and procure accordingly. Other areas for consideration are targets for AI and cloud adoption, and ever-decreasing use of fixed terminals. By prioritising innovative solutions and integrating digital infrastructure into public projects, the Government can set an example and create demand for new technologies. Additionally, the Government should ensure that procurement for major projects is digital by default. This approach will further enhance the efficiency and effectiveness of public sector procurement.
•                                                                                      In addition, the Government should implement procurement schemes for digitising the public sector. For example, enhanced connectivity in police forces, healthcare settings, and education can support significant improvements. This would enable police officers to take and upload witness statements on the spot, allow teachers to support students in other parts of the country through virtual learning, and in the NHS, digitalisation can support everything from records to diagnostics. Additionally, energy efficiency sensors should be trailed in public sector buildings. This initiative would evaluate the benefits of digitalisation on a national scale, enabling technology to be deployed cost-effectively and uniformly across all local authorities. Such an approach would drive efficiencies and support the government's missions to enhance the NHS and reduce crime.

•                                                                                     Planning: Mobile network operators should be consulted on new development projects to prevent connectivity issues. All new developments, including publicly funded ones, should have digital infrastructure integrated into their design and planning approvals, with the costs covered by developers or builders. This approach will allow for seamless integration of networks into building schemes. Further investment should be given to local planning authorities to reduce delays and facilitate alternative sites. Additionally, the National Planning Policy Framework should be updated to prioritise mobile infrastructure and the ECC should be implemented.
•                                                                                     Net neutrality: The UK’s neutrality legislation was implemented in 2016 but has its origins in the early 2000s. In 2023, Ofcom recognised that things needed to change, and that Government should intervene to reform the legislation. Ofcom provided a clear recommendation that the UK’s legislative approach should be reformed, with a shift towards a principles-based outcome. Ofcom noted that “further flexibility to allow Internet Service Providers to apply more targeted traffic management could be beneficial and consistent with our objective to ensure well-run, efficient and robust networks”.
•                                                                                     Skills Reforms: Addressing the skills gap is crucial for technology adoption. The Government should invest in education and training initiatives to develop a workforce capable of leveraging new technologies. This includes reforming the apprenticeship levy to prioritise flexibility and funding for functional and digital skills training. 

28 February 2025