The use of big data analytics could save the public sector between £16bn and £33bn a year – equivalent to between 2.5 per cent and 4.5 per cent of the government's total budget of about £700bn, according to a report by think-tank, the Policy Exchange.
The report, called The Big Data Opportunity: Making government faster, smarter and more personal, argues that the savings, which equate to £250 to £500 per head of the population, can only be achieved if public-sector leaders and policy-makers combine the scientific method of big data with sound judgement.
In its recommendations, it said that a new advanced analytics team should be established in the Cabinet Office with responsibility for identifying big data opportunities and helping departments to realise them. The team would work with departments to transform public policy delivery by "applying data and analytics in new, imaginative and/or more sophisticated ways".
It would also spread awareness of cutting-edge data and analytical tools and, crucially, "achieve savings and benefits for central government, over and above existing plans, worth at least £1bn".
The team would then publish a progress review within a year to "conjure up a sense of urgency".
A second recommendation is for the government as a whole to adopt a "Code for Responsible Analytics", to help it adhere to the highest ethical standards in its use of data and analytics.
The think-tank suggests that the code should include putting outcomes before capabilities, testing all major initiatives and respecting the spirit of the right to privacy. It added that, "where this data is needed for public policy reasons, consent should be sought explicitly".