Public sector services in the UK are losing £45 billion annually due to outdated technology, according to a forthcoming report from the Department for Science, Innovation and Technology.

The loss is described as a “missed opportunity” to improve productivity, streamline operations, and enhance citizen satisfaction.

The report outlines systemic issues inherited from the previous government, including an overreliance on costly contractors, inefficient processes, and critical technology failures. Nearly half of public services remain inaccessible online, forcing citizens to navigate time-consuming processes like in-person applications and lengthy phone waits. Public sector workers are similarly constrained, wasting time on physical paperwork rather than focusing on core services.

“Technology that sits at the foundation of our country has been left to wither and decay under the hands of the previous government,” said technology secretary Peter Kyle. “It doesn’t have to be this way – and it won’t be with our Plan for Change.”

The report reveals that over one-quarter of central government digital systems are outdated, with some departments facing rates as high as 70 per cent. These legacy systems incur three-to-four times higher maintenance costs compared to updated alternatives, with a growing number rated as high-risk for reliability and security.

In 2022 alone, NHS England experienced 123 critical service outages, disrupting care for patients and forcing staff to revert to paper-based processes. Kyle emphasised the need for reform, stating, “There is a £45 billion jackpot for the public sector if we get technology adoption right. That’s twice the size of the black hole we faced when we took office.”

As part of its Plan for Change, the government announced two AI tools aimed at modernising services. The first, ‘Connect’, will streamline the process of integrating clean energy projects into the national grid, potentially reducing delays that currently stretch up to 10 years.

“This innovative use of AI could help us clean up the queue and slash waiting times to hook important energy projects up to the electricity grid,” said energy secretary Ed Miliband. “The sooner we can get more homegrown renewable energy onto the grid, the quicker homes and businesses can benefit from a new era of clean electricity.”

The second tool, ‘Scout’, will improve the efficiency of major infrastructure projects by analysing documents to detect early issues. It is expected to cut manual processing times from hours to minutes.

The reforms build on the recent AI Opportunities Action Plan and aim to modernise public services, making them more efficient and accessible while reducing costs for taxpayers.

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