Guest blog: Harnessing big data to mend our broken economy

Analytics

by | 13 November 2012

Simon Dennis, central government director at business analytics firm, SAS, writes for CBR on how the UK public sector can use its data to make evidence-based decisions and the role analytics will play in helping the Government meet its austerity targets.

At the end of last month the Cabinet office announced that the U.K. government is on course to save £8 billion in the current financial year. The findings indicate that we as a nation are on the right trajectory to meet the austerity targets. However, if Government is to continue driving efficiency improvements and better financial controls, it needs to look again at one of its most powerful assets - its data.

Recent studies have underlined the economic opportunity that big data offers the UK public sector given that one in five large UK businesses are now assigning a financial value to their data on the company balance sheet . Despite the clear potential and for all its good intentions, the UK government has yet to fully seize the opportunity to find cost savings and improve public services by making better use of its data. If it did so, it would have the necessary knowledge to make better informed decisions and deliver timely evidence-based policy .

Government data tends to be locked away in silos, overprotected and underused. Consequently, public sector departments are not fully exploiting the vast resources of information at their disposal, which, if harnessed could drive quicker and more accurate evidence-based decisions through big data analytics. Against a backdrop of spending cuts and increased pressure on resources, this is an opportunity the public sector cannot afford to ignore. However, a complete transformation is needed in terms of understanding what information government has, how best to collect more of it and how to fully harness its potential across a range of areas in the interests of the taxpayer.

There are a number of areas where the government needs to make better use of its data in order to meet its austerity targets, including:

Improve sharing and collaboration to provide a 360-degree view of citizens
The value of data or insight increases significantly when it can be shared to provide a holistic view of an individual, household or region. The government - with agencies collecting a wealth of citizen data every day - is in prime position to share reliable data for collective use. This could be used to inform everything from which people are eligible for benefits to which are at risk of developing medical conditions, and would help eliminate duplicate and erroneous citizen records.

The Department for Work and Pensions (DWP) is already working with SAS to integrate big data from across government and local authorities, and provide a single view of citizens. The approach has already led to the issuing of 600,000 referrals annually and the identification of over £200 million in overpayments.

React quickly and confidently to changing circumstances, and social and budgetary demands
It's not only important that the government knows what is going on across the country, but also what is coming up. By unlocking and analysing the wealth of data it has access to, the government would be able to make evidence-based decisions in real-time, and create powerful insights and hypothetical scenarios.

This sort of analysis is no longer restricted to IT departments and analysts either. Using visual analytics, ministers, health practitioners and council staff could quickly interrogate the data available to them, producing maps, graphs and tables to reveal patterns and emerging trends. This could be used to analyse anything from nationwide flu epidemics to local rubbish collection and disposal.

Detect and prevent fraud and error
The threat posed by fraud and error is extremely complex, with internal and external, accidental and organised fraud to combat. It's also costly. The National Fraud Authority (NFA) estimates fraud and error cost the public sector a massive £20.3 billion in 2011.

The NFA recently commended both HMRC and the DWP for their adoption of predictive analytics to fight fraud, and recommended that other government departments do the same. HMRC's Connect system enables it to identify potential tax fraud and criminal networks with greater speed and efficiency, while processing valid claims faster. In 2008/09, the Connect pilot system increased investigator generated tax yield by 58 per cent (£572 million), a return on investment of 30:1. As a result, HMRC anticipates an ROI of around 1,000 per cent in just five years.

Switch to fast, evidence-based decision making
By unlocking and analysing the huge amounts of data in its possession, the government would be able to reveal previously unseen patterns, develop a true understanding of citizens' needs and put that knowledge to work through policies and local initiatives. Evidence-based decisions could be made almost instantaneously, with the the government also able to create powerful insights and reliable "what-if" scenarios. These could be used for anything from forecasting tax revenue and budgets to predicting policy outcomes - and the information can now be obtained in seconds or minutes, rather than days.

Get the most out of existing resources
With continued spending cuts and increased pressure on performance, boosting productivity and revenues is high on the government agenda. Used properly, big data will enable the public sector to streamline services while focusing on the areas that will yield the best results, allowing it to get the most out of existing resources. This could mean anything from reviewing the government estate to identify where property could be consolidated or rationalised, to using analytics to identify where spend or effort would be most effectively used.


Simon Dennis, central government director at SAS

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