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Stephan Shakespeare: The eve of a golden age for innovators and taxpayers

Stephan-Shakespeare Stephan Shakespeare is Co-Founder and Chief Innovations Officer of YouGov.  He is also the co-owner of ConservativeHome and PoliticsHome. Next Monday, 22nd February, he hosts a major conference on the Post Bureacratic Age. Read about it here. In this Platform article he explains how Cameron's most under-reported idea can save taxpayers many billions of pounds and produce better public services.

On Wednesday Cameron announced a new plank to his transparency platform that will save taxpayers billions of pounds. It will create countless new opportunities for entrepreneurs. It will transform the state’s relationship with the people. Aside from a few blog-posts, there was no media coverage.

Now, partly this was because of the way CCHQ chose to promote it. Cameron announced the policies during a talk to ‘TED’, a not-for-profit organization dedicated to spreading new ideas. TED talks are extremely cool at the moment, but they are only for the netty-cognoscenti. In fact they are so very special that you could only enjoy the show if you were in a little corner of Oxfordshire at the right moment, or in California, or – for those privileged insiders insisting on staying in London – you could watch the live feed in the auditorium at Bafta. In the Internet age, there was no feed to the rest of the world. It is highly ironic that the image of David Cameron lecturing in front of a “power to people” backdrop will be made available to the people only at a later date.

But it probably wouldn’t have made any difference if it had led the Ten o’clock news. A policy to publish full details of all government contracts over £25,000 just doesn’t sound very interesting or important. But it’s huge.

The biggest spender - by some distance - is the government. The more that can be done to make visible every aspect of that spending, the better chance we have of cutting our debts while maintaining a decent standard of service. One of the reasons we can’t see our way clear to reducing the deficit is that we can’t even see where the money goes, or what we get for it. We are not currently allowed to know how they spend our money.

That’s very convenient for the people who benefit from government mis-spending but we should be outraged as taxpayers. From time to time the Audit Commission highlights how billions have beenb wasted wasted on IT projects. Those reports shine a little light into one tiny corner of the spending machine. We reel back in shock at the waste and then shrug our shoulders. We feel powerless to do anything. The waste continues, the deficit grows.

Transparency is a money-saver

So why will publishing contracts online make a difference? Do I have the weird illusion that the British people will soon make it their hobby to spend merry weekends poring over the terms and conditions in Appendix B of a contract to supply some obscure government department with a new ventilation installation?

I don’t. But I’m quite sure commercial companies will invest time in examining every government contract awarded to their competitors. Imagine me, as an opinion pollster, learning that some other polling firm has won a fat contract but now I can look at every detail of their winning contract. I would see how to improve my own offering and win next time – either by offering better, cheaper or both. And if the government bureaucrats had made an obviously bad deal, I would shout it from the rooftops to embarrass those at fault. Knowing this, those bureaucrats will be more careful in how they award contracts in the first place.

Would this really make much difference to the greater scheme of things? Consider this: Steria, a major French supplier of UK government outsourcing, has revealed that its operating margin on UK contracts (11.4%) is almost twice that on its French contracts (6.5%). 

If the price paid by the UK government on its procurement contracts was reduced by 5%, taxpayers would save £7 billion a year – over £300 per family. And that’s just in a one area of government spending. Can you imagine just how much of the money you give to the government each month merely buys fatter profit margins for big business?

Transparency brings innovation

And it’s not just about saving taxpayers’ money. Once the procurement process is fully transparent and accessible it will mean the more adventurous, the more innovative suppliers will get an edge. Open competition is always a spur to invention. Decisions made in the open mean an end to the cosy arrangements that deliver the same old poor services for inflating costs.  Along with other changes in this environment – the fact that cloud computing allows smaller companies to take on much bigger projects than before, for example – it will mean a lot more innovators and entrepreneurs, of all shapes and sizes, will have the chance to get involved, and their inventiveness and competitive edge will mean cheaper and better products.

This vision of more-for-less is not pie-in-the-sky. Year by year, we get more for less in the consumer world. Why do we never expect the same gains from government?

We are entering a golden age for innovators and entrepreneurs. As we struggle out of this recession, we have some powerful advantages: a combination of a pressing need (unsustainable debt) with new tools (digital networking and cheaper technology) in an ever more open environment (everything is becoming more visible and connected). The natural creativity of humanity will be unleashed as never before.

Some have said that we are making a fetish out of transparency. We are accused of being simplistic in our expectation that it will drive a fundamental transformation not only of democracy but of our economy and our public services. But how else can it possibly be done? The very nature of the human project is to see, to respond, to improve. Civilisation is an endless feedback mechanism. We compete, we share, we invent, we build. The more information, the more access, the better we do. There’s nothing mysterious or strange here. What is mysterious is that we would allow things to stay hidden for the convenience of politicians, bureaucrats, and business moguls. What is strange is that we would deny access, for the protection of further mistakes and abuses.

Why would we do that? Why would we allow obstruction to change? Why would we not whole-heartedly embrace every aspect of the transparency agenda in order to benefit from the full creativity and energy of the population?

That is why I urge extreme radicalism. I am not satisfied with the new Conservative policy. Why make it apply only to contracts above £25,000? You will instantly see an awful lot of government activity pegged at £24,500. Apply the new rules to ALL contracts. Bear in mind, this need add no scintilla of added bureaucracy or cost (a common excuse for keeping things hidden). Virtually all contracts are already in digital form. Use a simple format with appropriate tags, and make all contracts automatically cc’d to an openly accessible data file. That’s it. A simple rule, and it is done. Stand back and watch as competitors access the files, and as the software guys create apps to allow us to see what’s happening to our money.

We need a new law: that citizens should truly own what they’ve paid for

I propose a basic new principle, that everything we citizens pay for belongs to us. Politicians already say ‘we are your servants’, and in some lofty way they genuinely mean it. But they don’t act like it, at least not institutionally. It should be simple: if we paid for it, it’s ours, and that’s that. We don’t need a privileged inner circle to tell us what we can and cannot see, what we can or cannot change.

I want a new basic law that establishes that citizens have full rights of ownership over what they paid for. If data is produced with our money, it belongs to us. These rights are not dispensed from above. They are already owned by us. They should not be blocked. Any withholding of data is a form of theft.

Now, there will obviously be a clash between different kinds of rights: for example, there is a right to individual privacy, and where rights contradict, there will be plenty of heat. We’ll work through that. And there will be matters of national security, obviously. But establish the fundamental principle: we own what we pay for. I want us to start now with framing a far-reaching Freedom of Data Act to replace the horrendously slow, bureaucratic, obstructionist (though still useful) Freedom of Information Act.

I spoke with a senior civil servant recently – one so open, so clever, so sincere, that I almost changed my view of Whitehall. He told me he would welcome complete transparency, even down to publishing in real time the detailed notes of advice that pass back and forth between the inner-circle players, and which could simply be cc’d to the public. The idea that we presently have a culture of brilliantly free and open discussion between civil servant and minister and that this leads to optimal decisions was rejected. The civil servant today is intellectually stifled by secrecy.

This will all happen. When things are possible and useful, they happen – although sometimes too slowly. The Internet has changed too much for it to be held back for long. We hardly notice how much it has changed things already, even in Westminster. At the moment, many politicians act defensively towards it, and that can make things worse in the short term. Better to embrace it freely, wholeheartedly. The job of government is too important. Transparency means we are included. Our experiences and talents can begin to make a difference. Transparency leads to participation, and then to innovation.

This is about real stuff, about our world becoming better. When we think of the industrial revolution, we sometimes think of it as having been brought on by a few great inventions, like the spinning jenny. In fact, the revolution was the sum of many tiny inventions, usually made at the shop floor, very often by ordinary workers. The pump was not ‘invented’, but developed by many tiny adjustments, by many people. That’s how we progress. So yes, I am prepared to make almost a fetish of transparency (and participation, and innovation).

It’s good to see David Cameron genuinely embracing the post-bureaucratic age. He says it over and over, and brings forward hard-edged policies that will make it happen. I believe that he believes in this and I heartily applaud it. I also applaud what Boris Johnson has started in London. But it is not the preserve of one party, and it must be said that Labour has also pushed the agenda forward, especially with I would love to see Cameron and Brown trying to out-do each other, each becoming more and more radical about openness until they arrive at this basic principle: It all belongs to us, and it should therefore be treated that way. An automatic presumption for transparency and access, as enabled by the digital revolution.

Please do comment below; I will fully respond to all suggestions within the thread and click here for information about the conference.


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