Research and analysis

Executive summary: Digitalising welfare services

Published 7 October 2024

The Department for Work and Pensions (DWP) is the largest public service department in the UK. It administers the State Pension and a range of working-age, disability and ill-health benefits to around 20 million claimants and customers, and many of these services are moving to being delivered online. DWP commissioned RAND Europe to review and supplement the evidence base around the impacts of digitalisation experienced by other private and public sector organisations. The evidence collected through this review can be used to inform strategic and operational decisions around the design of DWP digital services. 

The review addresses a number of research questions, grouped into 4 areas of interest: 1) the impact that online provision of services has on costs and savings

2) the impacts of digitalising services on customer experience

3) the wider societal impacts of shifting services online, even if these are more difficult to quantify

4) lessons learned from the digitalisation process experienced as a result of the COVID-19 pandemic. 

To respond to these questions, RAND Europe undertook a quick scoping review (QSR) complemented with additional manual searches and interviews with stakeholders in the UK and other countries who have significant experience in digitalising services. 

In relation to costs and savings associated with the digitalisation of welfare services, we found that: 

• Despite interest in the use of advanced digital technologies in service delivery, digitalisation is occurring across a narrow set of public services and is often limited to simple transactional tasks rather than the delivery of more-complex services. 

• It is difficult to gather accurate estimates of the costs involved and savings generated due to the digitalisation of services. This review suggests that organisations could use a service-by-service approach to measure the financial and economic impacts of digitalisation. 

• Digitalisation can offer staff-related cost reductions and savings. However, the extent to which these savings can be realised depends on other factors, particularly costs related to staff training and support. 

• Digitalisation can result in reduced costs and increased savings in service delivery. However, these gains may be offset by increased demand spurred by digitalisation. 

• The process of digitalisation is prone to technical difficulties, and digital channel failure (failure to achieve expected, pre-defined outcomes) is associated with unforeseen costs. 

• This review notes that having multiple means for service access and delivery is a way to make service delivery more cost efficient. 

Limited interoperability (the ability to exchange information across computer systems or software) and fragmentation of information were seen as obstacles to the digitalisation of welfare services. 

In relation to customer experience, we identified different strategies that encourage customers to use digital channels and principles that facilitate the take-up of online services: 

• guaranteeing customers that non-digital options are available, launching marketing or educational campaigns, and creating engagement teams were found to be successful 

• designing a digital service with a high level of adoption and continued use requires careful attention to 

• preferences and abilities among and within population segments, including preferences regarding privacy concerns and accountability 

• aesthetic experience 

• usefulness and ease of use 

• context: if digital services increase burden for consumers or if they replace services that require urgent or very personal or emotional attention, they will fail to replace in-person services 

In relation to societal effects of digitalisation processes and notable effects of the COVID-19 pandemic, we found that: 

• Digitalisation processes may lead to more inequality. Evidence points out that particular attention should be given to ensuring that vulnerable populations, especially those at risk of digital exclusion, are protected from any negative effects related to accessing (digital) services or the internet – and its supporting technology more broadly. Evidence shows that this can be done in a number of ways, e.g. through establishing public Wi-Fi or other initiatives, both online and offline. 

• The digitalisation accelerated by the COVID-19 pandemic not only increased the type, quality and uptake of digital services, but also appears to have ensured the continued use of digital services in the future.