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Luke Graham is MP for Ochil and South Perthshire and a founder and Co-Chair of Freer.

Technological innovation – one of the major challenges and opportunities of the 21st century – provides us with new techniques and methods to achieve our goals and make governments more efficient.

Whether we are looking at local councils, devolved administrations, or Parliament itself, technology threatens and inspires in equal measure. 

Representing a constituency with four layers of government – community councils, the local authority, Holyrood, and Westminster – I am acutely aware of the need to leverage technology to find more efficient ways of working. Far too often information is not shared in a timely manner, private details are lost or misplaced, and business plans are constructed using the tools and methods of the 20th Century, not the 21st.

At the heart of FREER is a principled belief in economically and socially liberal thinking – in the intrinsic value of freedom and its vast instrumental benefits. We list on our website four key tenets: ‘free to aspire’, ‘free to be’, ‘free to create’, and ‘free to decide’. 

We describe the final of these tenets as hinging around the desire for ‘a sleeker state that prioritises the services we need most – while giving people greater freedom to succeed’. This kind of thinking is commonplace among so many Conservatives, yet today there seem to be too few who are willing to espouse it openly. 

One of these technologies promising a sleeker state is blockchain – a subset of what are known as distributed ledger technologies, or DLTs – which is the topic of a new FREER paper, out today, written by Eddie Hughes MP. Blockchain is best known for underpinning Bitcoin, but its other application opportunities are widespread – and yet relatively under-utilised here in the UK.

Many of these opportunities relate to the way in which such technologies offer increased efficiency within transactions, particularly in terms of eliminating the need for third parties. Effectively, blockchains cut out the ‘middle man’, meaning that connections can be made directly, peer-to-peer. Clearly, this has vast potential to increase trust, to afford more control to the individuals participating in transactions, and to reduce costs significantly, both within the private and public sector. 

Eddie’s paper discusses some of the research that has recently been done in this area. Investment banks, for instance, see blockchain as presenting a significant opportunity to reduce infrastructure costs. Its use in Swedish land registries has been predicted to have the potential for saving over $100 million per year through reduced paperwork, fraud elimination, and faster transactions. And academic research has shown significant implications for the funding of global development in terms of cutting verification and networking costs.

Sure, there are costs associated with blockchain itself, not least relating to storage, but further technological advances will no doubt reduce these. And all of this is before we start considering the ways in which blockchain might be combined with other new and innovative emerging technologies. 

If you look to Estonia, for instance, which has quickly become a world leader in terms of DLT take-up, you can see how combinations of new technologies are being used to drive efficiency through its ‘X-Road platform’, which digitally links all government services – and which is underpinned by blockchain. Indeed, it is famously claimed that, thanks to this substantial technological infrastructure, the ‘only things’ that now can’t be done online in Estonia are purchasing property, getting married, and getting divorced.

The country’s Prime Minister, Jüri Ratas, said in 2017 that the ‘digital solutions of e-Estonia make our daily life a great deal easier and more efficient [and] allows us to save two per cent of GDP every year’. This two per cent figure has been widely repeated in the media, although it is sometimes tied to more specific policy changes, such as the introduction of digital signatures, which have apparently helped make it the case that Estonians can now file their tax returns in three minutes! 

Now, some of Estonia’s digital innovations would not be directly applicable to the UK, not least regarding issues to do with scaling, and the way in which its government has tied them to ID cards. But it is clear that there is immense potential for liberal solutions here, not only in terms of increased security and (within the right overall system) individual freedom, but also in terms of government efficiency. A focus on blockchain should clearly be on empowering individuals in their necessary engagements with the state. 

Eddie argues that UK government departments should lead the way on this, by putting in place a long-term target of a one per cent efficiency saving to be made by embracing blockchain and associated innovative technologies. Calculating potential government savings is very difficult, and this type of improvement would clearly take time. But for context, total managed expenditure for 2017-18 is anticipated to be around £802bn, making a one per cent saving £8bn. 

This isn’t efficiency for efficiency sake – it would mean government using technology in the way it was intended: to improve the lives of its citizens. At a time when more cash is required for areas of need like the NHS, defence and education, what nobler aim could there be?

16 comments for: Luke Graham: Ministers should pursue the savings offered by embracing new technology

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