Cost¶
The cost of data and digital work is difficult to quantify specifically because of these inter-related system factors and the ways that they interact. A data and digital capability can be expensive while delivering low value; a low-cost capability can represent good value for money by making good choices about the outputs it produces, although doing so typically involves accepting necessary compromises to achieve balance.
For this report, we aim only to provide sufficient examples to make the case for investment – of time, money, attention, and insight – in improving data and digital functions, and for the potential benefit the Centre of Excellence might offer.
External costs¶
External costs can come from:
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CMS contracts
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Reporting software
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Examples of recent AI contracts etc.
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Outsourcing and consultancy
Research on behalf of DHSC estimated the average annual contract value in children’s and adult social care case management systems (CMS) at approximately £263,000 per year16. Typically, LAs will further invest in reporting software and assistive technology. To take one recent example, one council recently awarded a contract for £500,000 per year to support a strategic AI platform including children’s social care capabilities17.
With local bodies in England spending an average of £1.85 billion every year with technology suppliers18, children’s services spend increasing, and the proportion of local government spending dedicated to children’s and adults social care passing two thirds for the average council19, the real external costs of children’s services data and digital work are likely to be higher than indicated by contracts for individual systems – many of those costs are covered by centralised technical functions whose primary customers are now children’s and adults services.
Internal costs¶
In 2022 Social Finance conducted user research around the potential benefits of improving data quality, in a project which culminated in providing free data quality tools to LAs via Data to Insight.
The research indicated the internal costs of completing a statutory return in children’s services ranged between £9,000 and £22,500 per year. LAs involved in the project estimated that support with more effective year-round data quality work could save between 25% and 50% of current statutory return costs.
These figures are examples only; across the field of data and digital support to children’s services, these internal costs are not always accounted or scrutinized for value. These costs make a case for fresh discussion of what represents appropriate resource investment in local capabilities.
Control and volatility¶
Some of these costs – for example, the cost of responding to a new government agenda – are volatile; some – like the balance of staffing capacity to analysis output – are controllable by effective local management.
Others – like the time required to correct errors in a dataset – may feel unpredictable but can in fact be controlled with improved data maturity. Making sense of these distinctions is part of the strategic role of each local authority technical and leadership function.
16 Digital Markets dashboard - Microsoft Power BI
17 COV - 21614 - Strategic AI Platform - Contracts Finder (or for more on this story, see: Council contract with AI firm under review - BBC News)
18 TechUK: The key stats behind the local government tech market