UK councils stuck in IT “time warp” – report

Three quarters of local councils are “in stuck in a time warp,” using ageing IT systems, according to research.

A report by FT Longitude and TechnologyOne into local government’s investment in digital technology has revealed stark disparities between councils across the UK. Based on interviews with more than 500 senior council officers and 2,000 residents, the survey highlights two distinct groups.

While the first is focused on harnessing innovative, digital applications, the second group – comprising around 75 percent of councils – are using “outmoded, inefficient and insecure systems to run their operations.”

When asked to describe their use of digital applications to improve citizens’ experience, 39 percent of councils admitted that they were still using largely paper or analogue systems. However, most believed they were making progress to digitise the services they provide, with 61 percent of councils describing their residents’ experience as digital.

A third of councils making no progress on digital transformation

While 74 percent of councils have made progress on making key services available online, this is by no means a nationwide trend. Thirty percent of councils reported ‘limited to no progress’ regarding their digital transformation strategies. Be it the replacement of outdated legacy systems, providing digital payment options or automating business processes, only a quarter of UK councils reported to be making significant progress in this area.

Worse still, 73 percent of UK councils admitted to making some, limited or no progress when it came to updating cybersecurity. And 59 percent of councils say they have an outdated approach to cybersecurity, even though they cannot afford a breach.

The report highlights the significant rise in data breaches among UK councils. Data from just 160 local councils shows that more than 2.2 million attempted cyberattacks up to August 20221.

Just this week, Leicester City Council said its IT systems and a number of its critical service phone lines were down following a “cyber incident”.

Councils being squeezed financially

UK councils were recently granted an extra £500 million in funding to pay for spiralling social care costs. Since 2018, seven local councils have declared Section 114 notices on the basis of bankruptcy, with the rate of failure increasing in recent months. And a survey from the Local Government Association in late 2023 highlighted the fact that nearly one in five English councils admitted they were at risk of failure in 2024.

“Most UK councils are between a rock and a hard place right now,” said Leo Hanna, UK executive VP at TechnologyOne. “On one hand they fully appreciate the huge benefits that digitisation can bring to them in terms of increased efficiency, financial reporting, improved customer experience and significant cost reduction. On the other hand, many are facing crippling, ongoing financial pressures, which have created a group of ‘zombie councils’ that seem to be walking inevitably towards bankruptcy.”

Hanna suggested that one answer lay be government grants to fund digital transformation.

“In our report, 63 percent of councils said there was a gap between their digital plans and their ability to fund them. However, there are government grants available – typically ranging between £25,000 and £40,000 – that have helped councils with their digital transformation. And we have several examples of councils that have saved millions of pounds through efficiencies generated following the adoption of a digitally based reporting and service strategy.”