Harnessing big data to mend our broken economy
How the UK Government can make better use of its data
01 November 2012 - Following the announcement that the U.K. government is on course to save £8billion in the current financial year, business analytics firm SAS, today urges the government to look again at one of its most powerful assets – its data – to continue driving efficiency improvements and better financial controls. Recent research commissioned by SAS revealed that in the private sector, companies are starting to recognise the value of big data, with one in five large UK businesses now assigning financial value to their data on the company balance sheet. However, this is an area where the public sector too can benefit.
Recent studies have repeatedly underlined the economic opportunity that big data can offer to the UK public sector. Yet, despite the clear potential and for all its good intentions, the UK government has yet to fully seize the opportunity to find cost savings and improve public services by making better use of its data. If it did so, it would have the necessary knowledge to make evidence-based decisions and to inform evidence-based policy measures.
Simon Dennis, central government director at SAS UK, comments: "Government data tends to be locked away in silos, overprotected and underused. As a result, public sector departments are not fully exploiting the vast resources of information at their disposal, which, if unlocked, 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. However, a complete transformation is needed in terms of understanding what information government has, how best to collect more of it and how to fully harness its potential across a range of areas in the interests of the taxpayer."
In order to meet its austerity targets, SAS has identified in a white paper a number of areas where the government needs to make better use of its data. Here are some of the key ones.
1. Improve sharing and collaboration to provide a 360-degree view of citizens
The value of data 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 build a central repository of 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 working with SAS 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.
2. React quickly and confidently 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 huge amounts 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 either. Using visual analytics tools, ministers, health practitioners and council staff would be able to 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 flu epidemics to local rubbish collection and disposal.
3. Detect and prevent fraud and error
The threat posed by fraud and error is extremely complex, with internal and external, accidental and organised attacks 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 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.
4. Usher in a new era of 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, allowing the government to create powerful insights and reliable "what-if" scenarios, which could be used for anything from calculating tax revenue and forecasting budgets to predicting policy outcomes in seconds, rather than days.
5. Get the most out of 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 sold off, or using analytics to help identify where cost or effort would be most effectively used.
The Vehicle and Operator Services Agency (VOSA) is responsible for ensuring the roadworthiness of vehicles and the compliance of fleet operators. The agency worked with SAS to improve its data quality and integrate its databases. It now uses advanced analytics to identify the operators with the highest risk of non-compliance and target its enforcement resources accordingly.
Within a year, 15 per cent fewer investigations had yielded a 32 per cent higher prohibition rate. Revenue collection was up by 22 per cent, as was customer satisfaction. Furthermore, this intelligent approach contributed to a seven per cent drop in annual traffic accident casualties – the highest annual reduction since the Second World War.
SAS is the leader in business analytics software and services, and the largest independent vendor in the business intelligence market. Through innovative solutions, SAS helps customers at more than 60,000 sites improve performance and deliver value by making better decisions faster. Since 1976 SAS has been giving customers around the world
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