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‘Finance directors must understand e-government initiatives’

Rebecca McCaffry
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The economic value of digitisation to government could be as high as $1trillion annually according to management consultancy firm McKinsey.

Yet, the full value of e-government is not being realised in the UK as high-profile IT failures and a lack of awareness of the benefits has put local government off.

E-government projects in South Korea and the US offer valuable lessons on how new technology can be used effectively and securely, and engage citizens. For local government finance professionals, the adoption of similar projects in the UK will pose new challenges and require new skills.

The city of Seoul in South Korea is only 120 miles from Pyongyang and the cyberpower that is North Korea. We might expect Seoul to take a conservative approach to digitisation, yet it has embraced open data. The Seoul Metropolitan Government shares public information and administrative data, from bus timetables to property transactions and rentals, with citizens and businesses. In the latest Worldwide Digital Governance Survey, carried out by the E-Governance Institute at Rutgers University, Seoul ranked first overall. It came sixth globally on privacy and security, showing that even in a hostile environment where neighbours regularly engage in cyber-attacks, data can be shared openly.

Modern technology is also providing new ways of engaging citizens. The government of Kansas City used an online ‘Balancing Act Tool’ to involve citizens in decision making. It allowed the public to be involved in the allocation of $1m in an easy-to-use online game. The results gave policymakers a unique insight into what the public wanted and encouraged citizens to better understand the necessary trade-offs in budget decisions.

We might think that these kinds of initiatives are best left to the politicians. However, public sector finance professionals have a crucial role to play. E-government projects like these involve major upfront costs and local government finance professionals will have to be able to advise on investment decisions. Moreover, translating big data of the sort being made available in Seoul into better decision making and budgetary savings is a skill the local government finance professional of the future is going to need.

Finance teams and local authorities need to keep an open mind as to the risks and benefits of e-government. Carried out well, it can build trust to secure future investment and drive sustainable public services. Done badly, it can damage confidence and impact the public purse.

Rebecca McCaffrey, associate technical director of public sector research and development, Chartered Institute of Management Accountants


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