Using technology and data in a "smart way" could save local authorities £10 billion by the end of the next parliament, the author of a new think tank report has suggested.
The "single greatest barrier to achieving technology-enabled reform" is the fragmentation of local government, the study by think tank Policy Exchange argued.
The report entitled Small Pieces Loosely Joined - How smarter use of technology and data can deliver real reform of local government, noted local authorities had "separately procured or developed their own hardware, software and applications" to deliver services and perform functions.
It said that according to the Local Government Association (LGA), local authorities in England faced a £12.4 billion funding gap by 2020, while providing 80% of local public services.
The report said: "This raises the cost of technology (through duplication, inefficiency and limiting economies of scale) and prevents local authorities from adopting - or rolling out at scale - the more efficient ways of working that could save significant money.
"Shared services, targeted and coordinated action, and reducing demand on council services all require shared data."
The report argued that a choice between having either localism or centralisation was a "false choice".
It put forward a "new vision" for digital government, with recommendations including: local innovation, removing duplication and waste by evolving common capabilities; plus more collaboration within and between local authorities.
The report suggested councils lost more than £1.3 billion per year by failing to pinpoint where fraud had taken place, including council tax, benefit and housing tenancy fraud. Future violations, it added, could be predicted by better data analysis.
Data sharing, it suggested, could identify where some local authorities could merge certain services. It also recommended the phasing out of expensive bespoke IT systems, with the possible creation of an "app store" used by local authorities
Eddie Copeland, author of the report, said: "While there are examples of innovative councils that have used technology and data to deliver better, more efficient public services, many local authorities have failed to reform.
"Using technology and data in a smart way could save local authorities £10 billion by the end of the next parliament - money which could be better targeted at helping some of the most vulnerable in our communities".
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