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Written by Robin Knowles, CEO, Digital Leaders

I recently had the opportunity to participate in a roundtable held on July 17th, where leaders from local government and digital transformation sectors came together to discuss the challenges and opportunities of delivering innovation through procurement. 

The roundtable featured input from MHCLG, Greater London Authority, Scottish Local Government and the Innovation Procurement Empowerment Centre. Each of them brought a unique perspective on digital transformation and public sector innovation.

The session agreed that there are significant challenges facing local authorities, such as climate emergencies, health and social care, financial struggles, and the pressing need for more citizen-centric approaches. We also all agreed that this meant there was a need for innovation through partnership and the bringing in of expertise. However procuring these relationships is fraught with challenge, often held back by a risk-averse culture, limited budgets, and fragmented approaches. Far from being an effective process to avoid misspending public funds, we heard some staggering research from IPEC, that only 23% of tenders receive more than one bid, and only 5% of suppliers surveyed found it easy to innovate with the public sector.

So we agreed that the public sector’s procurement processes are often seen as barriers to innovation, with decisions based more on cost than value. Only 14% of respondents in a survey viewed public procurement as an enabler for innovation. Despite these challenges, advances in technology and reduced barriers to entry would, if achieved, present significant opportunities for the public sector to reshape the market through innovative procurement.

However, there are key challenges on the local government side to being able to innovate. 

Firstly, it was agreed that local government systems need modernization to be more resilient and capable of adopting new technologies. Exploring shared services and joint procurement opportunities can lead to economies of scale and better resource utilisation, but it was generally felt that it was questionable as to how successful shared services have been to date. 

Secondly, local government faces serious financial constraints, which significantly impact their ability to innovate and serve citizens effectively. Also, Skills acquisition and retention remain a challenge as local government struggles to compete with the private sector to hire the skilled personnel and innovative capabilities it needs

It was agreed that good data would be at the heart of any future innovation of local government services and here again Local Authorities are really struggling. The importance of data standards for efficient data sharing across regions, especially for public health and environmental management remains patchy at best. Current data-sharing practices in local government are often inefficient and still in many cases manual. It was agreed that things will only improve when there are proper data standards and seamless data sharing across all of local government.

Leadership was highlighted as key to making the needed changes. Leaders in local government will need to foster a culture where failure is acceptable, encouraging experimentation and innovation. 

The roundtable concluded that we all wanted to see a culture of experimentation and looking to leverage the latest advances in technology, like AI to drive service transformation. However, all agreed that this change will only come about if a fundamental shift can be achieved in how local authorities approach innovation and partnership with the private sector, facilitated by massively improved procurement practices.

It was a long and detailed discussion, too long to cover in full here, but for me, I came away with seven “tips” for digital leaders in Local Government.

1. Know When You’re Wrong: It’s essential to recognise when a strategy isn’t working and be willing to pivot. For instance, when Transport for London (TfL) realised that withholding data was counterproductive, they opened it up, which led to innovative uses by third parties;
2. Avoid Hype: Stay critical of new technologies and solutions. Evaluate them against your existing use cases to see if they genuinely offer something new and beneficial.
3. Foster a Culture of Experimentation: Encourage your team to try new things and accept failure as part of the innovation process. This can lead to breakthroughs that wouldn’t happen in a risk-averse environment;
4. Emphasise Transparency: Make procurement processes transparent and collaborative. This not only builds trust but also attracts more innovative solutions from the market. We reviewed the work of LOTI in London and Civtech in Scotland as two great examples of what is possible;
5. Think Beyond Borders: Work towards seamless data sharing across local government boundaries. Residents and businesses expect consistent services, and this can only be achieved through better data interoperability;
6. Invest in Upskilling: Ensure your team has the necessary skills to compete with the private sector. This might mean investing in training and development programs; and 
7. Standardise Where Possible: While customisation is sometimes necessary, standardisation across local government can lead to efficiencies and cost savings. Find the right balance for your organisation.

I hope these 7 strategies and tips for local government leaders can drive meaningful innovation and create more efficient, citizen-centric public services. One thing is for sure, it will require leadership to make happen.

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