The gig economy could save the public sector

It has come in for a hard time of late—but the benefits are impossible to ignore

February 06, 2017
©Dominic Lipinski/PA Wire/PA Images
©Dominic Lipinski/PA Wire/PA Images

We had barely moved out of our Christmas slumber before the Office for Budget Responsibility declared that public services, on their current trajectory, are unsustainable. The problem is exacerbated by low productivity levels, which have been near-flat in the public sector over the last decade. To improve services, productivity must improve.

As Reform argues in a report published today, agility must become the standard for the public-sector workforce. With automation potential for 250,000 roles, the public servants remaining will have to adapt to more autonomous and proactive ways of working. It will be enabled by the removal of the "frozen" middle management, and the creation of self-managing teams, who can direct their own work.

The most radical route to an agile workforce is the gig economy, which is promising to transform the world’s labour market. From Uber to Airbnb, vendors and users are becoming accustomed to apps allowing them to sell or purchase services at their convenience. The gig economy has come in for a hard time of late, with politicians like Frank Field speaking out against it. But the benefits are impossible to ignore, and the public sector needs to get on board.

In a squeezed fiscal environment, labour platforms enable employers to spend resources on the outcomes and services they need in a more targeted and flexible way. This has already been seen across very different sectors. In the US, the American equivalent of the Government Digital Service, 18F, has created a reverse auction website where registered vendors from across the world can bid to deliver coding. The lowest bidder is awarded the work and paid once it has passed the acceptance criteria. The first task was delivered for just $1, and the combined savings of the first 29 deliveries is estimated at nearly $68,000.

The benefits are not limited to the public purse. Crucially, platforms can benefit public-sector employees themselves. A private social-care company called HomeTouch currently uses a gig economy platform which, despite charging less than traditional agencies, enables staff to make 67 per cent above the national living wage—this is in contrast with the average social-care worker, who in 2014 made an hourly wage around 8 per cent above the minimum wage. It also gives employees greater flexibility than those on zero-hour contracts experience. On zero-hour contracts it can be difficult to juggle several sources of income, as hours can clash. In contrast, work acquired through online labour platforms is booked by workers themselves, encouraged to select unpopular hours by higher rates of pay.

For citizens, this new way of working promises greater autonomy. Councils have trialled platforms that allow social-care users to book their own care directly with the carer. In Greenwich, this has enabled better accommodation of specific user requests. Being able to choose the type of care, when it is delivered and by whom makes the process much more personal—a key aim of public services.

NHS trusts and schools struggle to keep down their agency spending. The NHS spends £250 million every month on agencies, and schools pay up to £10,000 in agency fees for filling a single vacancy. Both could benefit from smarter systems that put them in direct contact with qualified employees with a preference for flexible working conditions.

By using the gig economy, workers will actively select the tasks they want to contribute to, and depend on their performance in each one to increase their chances of being awarded the next one. This will encourage strong engagement and a pursuit of a diversity of skills for each individual, to the benefit of workers, users and employers. All in all, that’s a pretty good gig.

"Work in progress. Towards a leaner, smarter public-sector workforce" is available on