Beyond big-ticket spending, a crucial public sector shift is underway. In this exclusive opinion piece, Tony Mercer, former Home Office senior civil servant, explores how digital services and AI integration across the NHS and HMRC promise to revolutionise daily life by enhancing customer service, making public services as seamless as private ones
The billions allocated for housing, energy and infrastructure projects grabbed most of the attention in the Spending Review, so many may have missed the announcement could have the potential to make a significant difference to their day-to-day lives – plans to improve customer service in the public sector by rolling out digital and artificial intelligence (AI) across the likes of the NHS and HMRC
Public sector’s digital leap: NHS and HMRC
In the modern world, people expect services to be tailored to their needs. Grocery delivery apps allow customers to choose delivery slots, streaming platforms like Spotify and YouTube offer ad-free experiences and offline access through premium subscriptions, and budget airlines offer seat selection and extra legroom as optional upgrades. These services are designed around the customer, anticipating their needs, and people are prepared to pay for the convenience.
Citizens want similar flexibility in public services that they use regularly. So the Chancellor’s announcement of investment of up to £10 billion so that the NHS app becomes the ‘digital front door’ to the NHS promises to do just that, enabling patients to manage their medicines and prescriptions and increase their access to medical services such as tests directly via their smartphone. The Chancellor also confirmed that HMRC will receive £500 million to introduce an AI assistant to reduce waiting times for people with tax enquiries.
As Open Access Government has reported, the NHS app has already helped prevent 1.5 million missed appointments and is giving patients more personal control over their care. Nearly 90% of hospitals already offer services through the app, allowing users to manage appointments, view prescriptions, access GP records, and receive notifications, all from their phones. Hospitals using the app have seen a three-percentage-point increase in patients treated within 18 weeks. If scaled nationwide, that could mean 211,000 more patients receiving timely care.
But such examples remain the exception rather than the norm in the public sector. A government review earlier this year found that even where digital services exist, they’re fragmented. Moving house still requires contacting 10 different agencies. On average, UK citizens spend a week and a half each year navigating government bureaucracy. Nearly half of central government services still lack a digital option. The Chancellor herself is well aware of this, having tried to change the address on her driving licence after taking up residence in No 11 and finding she had to physically go to a post office to do it.
Lessons from Estonia: A digital nation
The UK should look to Estonia, one of the world’s most digitally advanced nations, for inspiration. Every citizen has a single digital ID granting access to all government services—tax, healthcare, benefits, and more. Estonia has fully digitalised its public services and launched over 100 AI initiatives, including Bürokratt, a network of voice-activated chatbots, and AI tools for border control and medical diagnostics. With 99% of health data digitalised, Estonians enjoy seamless access to care and faster, more accurate diagnoses.
There are a handful of examples of where public services are embracing digital transformation and as with commercial services people are prepared to pay for convenience: the DVLA offers optional premium services such as faster document delivery and personalised number plates, while the Passport Office provides one-day and one-week fast-track passport services for an additional fee.
User-centric public services
As a senior civil servant at the Home Office, I also saw how public services could be transformed by using private providers. Visa services evolved from slow, paper-heavy processes to more streamlined, user-friendly systems through outsourcing. VFS Global, which manages visa services for 69 governments including the UK, introduced an AI-powered chatbot providing conversational support to UK visa applicants, as well as SMS messaging providing updates on peoples’ visa applications.
At additional cost, it also offers optional services that make the application process more convenient for customers, such as a ‘visa at your doorstep’ service where visa staff visit the applicant, rather than them having to go to an application centre. Similar options, as long as they don’t allow queue jumping, would likely be attractive in other public services – and crucially could provide much-needed revenue within a budget-constrained environment.
Examples like these show what’s possible when public services are designed with the user in mind. Such services reflect a growing expectation: that public systems should be as responsive and flexible as the best private ones. The next phase of transformation must build on these successes—scaling what works, integrating fragmented systems, and designing services around the diverse needs of the people who use them.
