New report into economic impact of digital skills launched

21 Nov 2015

A report published today by the Centre for Economics and Research (Cebr) ahead of the 2015 Spending Review for the first time clearly sets out the huge financial and social benefits of everyone in the UK having the digital skills they need to survive in our digital world.

Commissioned by Good Things Foundation, alongside Go ON UK, the report estimates that over the ten year period between 2016 and 2025 4.9 million of those who do not possess Basic Digital Skills will get online without additional help, but the remaining 7.9 million (15% of the adult population) will need support to gain Basic Digital Skills at an estimated cost of between £45 and £334 per person. The report sets out the six main benefits to individuals and to the Government of equipping 100% of the population with Basic Digital Skills:

  • Earnings benefits – people in work who gain digital skills can increase their earnings by between 3% and 10%. If everyone in work is to gain these skills, it will lead to net earnings benefits of £358 million per year for individuals, and £243 million per year for Government from higher income tax and national insurance receipts.
  • Employment benefits - digital skills help unemployed people find work and prepare people for work-readiness. In also encourages those who are economically inactive to start looking for work. It is estimated these benefits will lead to £204 million per year for individuals’ earnings, and £79 million for government.
  • Communication benefits – digital skills improve the ability to communicate and connect with family and friends, leading to increased spend on recreation and cultural activities. The report estimates the aggregate additional expenditure on recreational and cultural activities to amount to £415 million per year by 2025.
  • Transaction benefits – Shopping online saves people on average 13% compared to shopping in-store, equivalent to £143 per person per year. The estimated transaction benefits of giving Basic Digital Skills to those currently without them are £796 million per year by 2025.
  • Time savings – By accessing services online, individuals save 30 minutes of their leisure time on average per transaction, saving 30 hours annually. In monetary terms, this time saving is estimated to be worth £1.5 billion per year by 2025.
  • NHS cost savings – Good Things Foundations’ NHS Widening Digital Participation programme found that after having learnt about health resources through training, a third of learners made fewer visits to a doctor. Based on a cost to the NHS of £45 per GP visit, ensuring everyone had the Basic Digital Skills to access health information online would provide savings of £121 million a year by 2025.

Helen Milner, Chief Executive of Good Things Foundation said: “I’m pleased to be able to share this report, which for the first time sets out the size of the potential economic gains for the UK, as well as the huge benefits to individuals that digital skills can provide. Digital is bringing about a new industrial revolution, and all jobs and workplaces are now underpinned by digital technology. This means it’s vital that we can provide people with the skills they need to both find employment, and to use digital technology on a day to day basis in their work, leading to major rewards not only for individuals, but also for national productivity. “The UK government needs to set out a bold ambition of reaching a 100% digitally skilled nation, to ensure we are not left behind as other nations make huge strides in supporting their citizens to gain digital skills. The quicker we do this, the bigger the prize for the UK, and our global competitiveness.” Rachel Neaman, Chief Executive, Go ON UK said: “This month we have seen a welcome commitment from Government to roll out fast broadband to all by 2020. This is an important step forward but it doesn’t go far enough. From our experience with regional programmes and as our recently launched Go ON UK Digital Exclusion Heatmap shows, broadband is only one of the factors holding back the country from fully exploiting the social and economic benefits of the internet. “This latest report highlights that ensuring universal Basic Digital Skills would give Government a direct cash return of £1.9 billion in increased tax receipts, lower job seeker allowance payments and NHS primary care savings, in addition to the individual and societal benefits it would provide. As we look ahead to the Spending Review, we cannot afford to ignore the direct correlation between Basic Digital Skills and these huge potential savings to UK PLC.”