Financial pressure is no longer the single greatest challenge facing local government in the UK. Although austerity remains relentless, councils also have a unique opportunity – to ride the wave of digital disruption and embrace the real potential of data and analytics to meet customer demand, enhance service delivery and improve outcomes for their residents.

Forward thinking local authorities already recognise this and are looking for ways to use new technology to improve services while protecting the public. This means they will need to be innovative, radical and swift to build up their digital capability.

PwC’s seventh annual survey, The Local State We’re In, polled the views of over 100 local authority Chief Executives, Finance Directors and elected Council Leaders across the UK. In a parallel survey of 2,000 consumers for this year’s edition, there is also an increasing appetite for council services to be available online, particularly among those who already use digital services. Four in ten (44%) of our public respondents say they would like more online services overall, with a clear preference among younger people (56% of 18-34 year olds) compared to older generations (34% of 55+ years). However, there is still some way to go to delivering the potential from digital: almost two thirds (64%) of the public in our poll had not interacted with their council digitally in the past month and 21% were not aware of any council services being available digitally.

The public also want reassurance that their data held online is secure: 34% of those we polled trusted their council to manage and share their data and information appropriately. Balancing security and privacy, with digital access and service provision is not only essential for day-to-day business operations but is vital to build trust in local public services.

With new regulatory requirements on the way, including the General Data Protection Regulation (GDPR), councils need to ensure they have the capability to respond to the new demands of information governance, while embedding cyber security at the heart of their organisations – this is far more than just building security controls, it’s about changing the very culture of the organisation.

Indeed, in the wake of the ransomware attack on the NHS and the attempt to compromise Parliamentary email accounts, there are real risks to manage. Councils themselves recognise this: just over half (53%) of local authority respondents across the UK feel they are prepared to deal with a cyber attack, while a third (35%) of local authorities are confident that their staff are well equipped to deal with cyber threats.

So how should local government respond to these challenges? Cyber security and data privacy are board level issues and require careful strategy and governance to get right. Local authorities need to build cyber resilience into their organisations and the right tone from the top will set the agenda throughout the organisation.

In addition, councils can make more out of data. The explosion of data is revolutionising business, with data-led insight adding value to every aspect of local authority provision as well as identifying new opportunities and improving outcomes. Organisations should be looking to base business decisions upon robust data analytics, supported by innovation and experience. Investing in an analytics capability will improve decision-making, drive smarter, earlier interventions and, as a result, reduce risk and cost.

However, only a third of respondents to the The Local State We’re In are confident that their council is using data analytics effectively to inform decision-making and strategy.

Allied to data analytics, emerging digital technologies need to be harnessed to change traditional ways of working and create new value, experience and insight. Most notable in this year’s survey has been the pivot around what councils think digital can deliver. Just a year ago, our 2016 Local State We’re In revealed that 80% of respondents thought digital would enable them to significantly reduce costs, this has now fallen dramatically to 58%. However, at the same time, the proportion who believe that digital will allow them to engage in new ways with communities and residents has grown from 54% in 2016 to 83% in 2017.

This is not the contradiction it seems. Focusing on using digital to facilitate citizen engagement will link consumers directly with services and the private sector experience is that facilitating this digital engagement becomes an always-open 24/7 portal where customer engagement goes up while provider costs come down. Following this model may well see councils sharing the same win-win experience.

However, if councils are to engage digitally with their citizens, they need to find ways to do so on the citizen’s terms. Alongside the survey of local council leaders and Chief Executives, our polling of the public shows the magnitude of this challenge. Just over a quarter of members of the public questioned felt they were well informed about the needs for closures or services reductions, and less than one in five agreed that local services had either become more effective or efficient.

Councils that get their approach to digital, data and cyber security right will not only prosper, but also build trust in their service delivery and sustained public value. Those who fail, may be destined to fail spectacularly and publicly as victims in a growing global cyber-war.

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