Using Big Data To Drive Efficiency Improvements And Better Financial Controls

Figures released last week by The Institute for Fiscal Studies suggest that if the recent decline in growth prospects continues long-term, the public sector may have to prolong the squeeze on public spending until 2018. Whether these predictions turn out to be correct or not, if it is to continue driving efficiency improvements and better financial controls, the government should look again at one of its most powerful assets – data.

Government data tends to be locked away in silos, overprotected and underused. Consequently, public sector departments are not fully exploiting the vast resources of information at their disposal, which, if harnessed could drive quicker and more accurate evidence-based decisions through big data analytics. Against a backdrop of spending cuts and increased pressure on resources, this is an opportunity the public sector cannot afford to ignore.

There are a number of areas in particular where the government can exploit data in order to meet its austerity targets, including:

Improve collaboration to create a 360-degree view of citizens

The value of data or insight increases significantly when it can be shared to provide a holistic view of an individual, household or region. The government – with agencies collecting a wealth of citizen data every day – is in prime position to share reliable data for collective use. This could be used to inform everything from which people are eligible for benefits to which are at risk of developing medical conditions, and would help eliminate duplicate and erroneous citizen records.

The Department for Work and Pensions (DWP) is already using analytics to integrate big data from across government and local authorities, and provide a single view of citizens. The approach has already led to the issuing of 600,000 referrals annually and the identification of over £200 million in overpayments.

Reacting to changing circumstances, and social and budgetary demands

It’s not only important that the government knows what is going on across the country, but also what is coming up. By unlocking and analysing the wealth of data it has access to, the government would be able to make evidence-based decisions in real-time, and create powerful insights and hypothetical scenarios.

This sort of analysis is no longer restricted to IT departments and analysts either. Using visual analytics, ministers, health practitioners and council staff could quickly interrogate the data available to them, producing maps, graphs and tables to reveal patterns and emerging trends. This could be used to analyse anything from nationwide disease epidemics to local road maintenance.

Combating fraud and error

The threat posed by fraud and error is extremely complex, with internal and external, accidental and organised fraud to combat. It’s also costly. The National Fraud Authority (NFA) estimates fraud and error cost the public sector a massive £20.3 billion in 2011.

The NFA recently commended both HMRC and the DWP for their adoption of predictive analytics to fight fraud, and recommended that other government departments do the same. HMRC’s Connect system enables it to identify potential tax fraud and criminal networks with greater speed and efficiency, while processing valid claims faster. In 2008/09, the Connect pilot system increased investigator generated tax yield by 58 per cent (£572 million), a return on investment of 30:1. As a result, HMRC anticipates an ROI of around 1,000 per cent in just five years.

This is now being used to help HMRC tackle tax evasion, avoidance and fraud, so as to meet the target of raising an additional £7 billion each year by 2014/15.

Switch to fast, evidence-based decision making

By unlocking and analysing the huge amounts of data in its possession, the government would be able to reveal previously unseen patterns, develop a true understanding of citizens’ needs and put that knowledge to work through policies and local initiatives. Evidence-based decisions could be made almost instantaneously, with the government also able to create powerful insights and reliable “what-if” scenarios. These could be used for anything from forecasting tax revenue and budgets to predicting policy outcomes – and the information can now be obtained in seconds or minutes, rather than days.

Maximising existing resources

With continued spending cuts and increased pressure on performance, boosting productivity and revenues is high on the government agenda. Used properly, big data will enable the public sector to streamline services while focusing on the areas that will yield the best results, allowing it to get the most out of existing resources.

This could mean anything from reviewing the government estate to identify where property could be consolidated or rationalised, to using analytics to identify where spend or effort would be most effectively used. For example, the Vehicle and Operator Services Agency (VOSA) now uses advanced analytics to identify the operators with the highest risk of non-compliance and target its enforcement resources accordingly.

The future of government data

The coalition government’s commitment to Open Data – releasing non-personal public data with the aim of raising standards, and driving innovation and business creation – has certainly helped lift data up the agenda for public sector departments. But much more needs to be done if the government is to realise the value of all of its data. And in a tough economic climate, with the quality of public services at stake, time really is of the essence.

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Simon Dennis is responsible for managing the key relationships between UK Central Government and SAS. In this role he enables and accelerates the delivery of SAS powered transformation programmes that support the UK and its public sector to become ever more efficient and effective through the use of analytics. After graduating in Physics from the University of Bristol, Simon continued to the Royal Military Academy at Sandhurst and his early career saw service with the military across EMEA, Asia and North America. Returning to the UK, Simon was soon drawn back to technology particularly in the areas of risk mitigation and cyber security.