Cut cost and save money. Beware of fallacious arguments.

I received this in my email this morning (I’ve removed all reference to the organisation that sent it as that is not the issue):  ‘As the [Government’s] Digital by Default agenda moves swiftly forward, it is now more important than ever for the public sector to embrace new digital technologies. According to the Government’s Digital Strategy, an hour currently spent interacting with Government costs the citizen £14.70. In fact [sic], if just half an hour were saved by digitising every transaction currently completed offline, the total savings to the economy would be in excess of £1.8 billion.’

The mail was asking me to complete a survey on digital transactions but after I had had to guess half a dozen of the answers to the questions posed, I felt that my contribution would no longer be valid.  But then I got thinking and started to question the content of the mail.

The first sentence was fine, perhaps it really is more important than ever to embrace digital technologies but the concept of the citizen hour seemed a little more shaky.  How was this worked out?  The Digital Strategy  says that it uses principles from HM Treasury’s Green Book and data on earnings, employment and time from the Office of National Statistics, which estimates the value of an individual’s time at £14.20 an hour in 2009 prices. The Costing Customer Time research paper by Alexandra Hill and Julian Noti gives all of the detail, though I must admit I found it hard to follow.  I can only assume inflation has been added.

The average earnings in the UK is around £26,500 and so £14.70 would mean the average person, using a quick calculation, would work just over 8 hours per day.  It would seem that I am getting somewhere.  But then is it safe to assume that if people were not interacting with public services then they would be out earning money?  Of course not, surely someone is mixing up cost and value.  If the interaction is done in the person’s own time then there is no cost and therefore no saving to be made in citizen time.  Indeed it could be argued that if we move more transactions to electronic formats then more people will be tempted to carry these out at work where they have access to computers and the internet which would lead to a loss of productivity and an increase in cost. What of those who are not in work?  Many of the clients of public services are unwaged, retired or on benefit.  For this group none of their time is economically productive.

I agree that £1.8 billion sounds like a lot of money, it is a lot of money if it really exists (they said it was a fact) but do we really spend 0.2% of the UK’s gross domestic product in offline transactions with the public sector.  I would need a lot of persuasion to be convinced.

We need to be careful.  Extrapolating assumptions and dressing them up as facts can be a dangerous thing.  The use of false argument (I think it’s called sophistry) should be discouraged otherwise we will make all of these savings and find that we are no better off than we were in the first place.

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