Public Services > Central Government

Would a Brexit slow the UK Government's digital transformation drive?

Published 22 June 2016

James Norman, public sector CIO at EMC, considers the implications on Whitehall digital transformation of a vote to Leave the EU

 

The latest update on the polls suggests that both sides are neck and neck, though the bookies are favouring a 'remain' vote. If we do leave, what impact would this have on the UK Government's digital transformation program?

Economic headwinds could slow digital investment

Well, let's consider. If we leave, it's been estimated that 500,000 jobs could be lost. In turn, citizens could have permanently lower incomes; and if consumers have less money, spending will drop, and Britain's economy could be tipped into a year-long recession, leading to a driving further economic headwinds, according to the IFS.

Concerns about a possible Brexit have already caused economic activity to fall to its weakest point in three years. The concomitant hit to tax receipts could be as much as £36 billion a year after 15 years of Britain going solo. With the UK economy potentially in recession, with a £20bn to £40bn deficit, this would lead to less money being spent on spurring innovation in the public sector and delivering better public services.

Delivering 'Leave' campaign promises could drain Government resources

The 'Leave' campaign has made significant pledges on tax cuts and subsidies, for example promising to scrap VAT on fuel to help the poorest of households; in total amounting to around £111 billion in spending commitments. But if we are to leave, there are concerns as to whether the UK Government can actually deliver on these promises, particularly in light of a possible income tax drop.

Dealing with negotiations for a new set of European treaties could drain resources


It will take at least two years to agree a new set of agreements with our European and international partners; some expect it will take even longer. After all, Britain's current relationship with Europe has been over 60 years in the making.

It seems likely that these negotiations will consume considerable resource, which may mean less investment and time will be made in innovating the public sector, making us take a step backwards in unlocking next generation digital services that transform everyday life for citizens.

As an organisation, we have already stated our views - alongside others (subscription reuiqred) - as we believe that the UK should remain in the EU in order to help encourage UK growth and receive foreign investment. In addition, the UK must continue to support a successful EU-wide Digital Single Market package that allows the EU's digital economy to thrive.

It's entirely possible that in the event of a Brexit, the pressing economic factors force an acceleration of Government digital transformation projects - and much of the above could be a worst case scenario that never comes to pass. If we do exit, we will need to see firm, fast action to address a potential climate of uncertainty that could otherwise see things grind to a halt over the next two years.

In either event, there are still things the UK needs to continue to push for, including a robust but innovative data protection and privacy framework that enables us to trade with Europe and beyond. However, the potential losses if we leave the EU seem greater than the gains. If, as we hope, we do remain, the referendum debate should be a wakeup call to Brussels and member countries that things need to change. We hope that the UK will help to design and shape those changes after the vote on Thursday, ideally negotiating at the table from within the EU.








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