Agenda Setters

Korski’s £45bn govtech opportunity

Up until last June’s shock referendum result, Daniel Korski was a key pro-EU official at the heart of David Cameron’s Conservative government. This spring, he opened up Public, a VC-backed operation to help tech startups transform public services. In the first of our new AgendaSetters interview series, Korski talks to Julian Blake about his new project.

Daniel KorskiIf last June’s EU referendum result was an important event for the rest of us, it was an absolute watershed moment for Daniel Korski.

As the deputy head of policy to David Cameron at Number 10, Korski had been at the heart of the government that made the fateful decision to go for a referendum on continued EU membership.

Post-result, Korski soon become something of a hate figure among the Tory right, with the Daily Mail labelling him as a “Project Fear enforcer” and one Brexiteer MP demonising him as no less than the most “ardent EU enthusiast to ever work for a Tory prime minister”.

Korski’s departure from government last July came as quickly as that of his then boss. His subsequent inclusion on Cameron’s controversial resignation honours list – slated for alleged cronyism – only added to the sense of anger for many on the right and left alike, despising the idea of rewards being handed out after spectacular failure.

The Mail and others continued to pursue Korski and the supposed Cameron cronies, most recently in alleging that Korski lobbied hard for Uber to secure the tech firm a good deal with the then mayor of London Boris Johnson. Korski has strenuously denied the Mail allegation.

Earlier this month, Korski found himself on stage at a Tech London Advocates investor showcase at London’s Here East. Clearly more relaxed than he had been 10 months earlier, Korski joked that the new beard he was sporting was no post-Brexit disguise. “I’m told that men have to do this when they have to overcome professional failures,” he said.

“We thought we could get the kind of deal that would allow people to stay,” he reflected. “And we fought very hard, but ultimately unsuccessfully to persuade people of the case.”

Looking at the Brexit negotiations ahead, Korski predicted “really difficult and challenging” times for the government. “Dealing with Brexit negotiations is going to be an extraordinary assignment,” he said. “Take it from me, I was in the EU negotiations before, and they are nothing as to what faces us. The government is at risk of running out of bandwidth.”

Those 10 months post government have hardly left Korski, 39, twiddling his thumbs. Given his career record, that’s little surprise. Pre-Downing St, he worked variously for Lord Paddy Ashdown’s office when UN high representative to Bosnia-Herzegovina, for the US State Department under secretary of state Condoleezza Rice, and in both Afghanistan and Iraq, where he oversaw the reconstruction of Basra province at the height of the conflict.

In significantly calmer waters now, Korski has taken on a new challenge – albeit one that looks sure to test his powers of diplomacy and government experience in new ways.

In November, DigitalAgenda was among the first to report Korski’s role at the helm of a new ‘govtech’ fund to help transform public services. The new fund, which we reported at £50m, was set to be used to support entrepreneur-led businesses driving innovation in the provision of public services, rather than delivering services direct, Capita style.

We reported leading UK venture capitalists including Robin Klein of LocalGlobe among those backing the project, with former UKTI chief of staff Caroline Makepeace on Korski’s core team.

Five months later, Korski was able to announce to the world. The new operation was up and running, with investor Alexander de Carvalho on board as co-founder. Its first programme, GovStart, opened up for applications.

When I talk to Korski this month, he appears genuinely excited about the prospects for Public.

“When I left government, I wanted to fix a problem that I had seen, which was the fact that there were so many great entrepreneurs, founders and extraordinary engineers who were not applying their talent to transform public services,” he says. “They found the whole idea of engaging with the public sector on one level aspirational and another level frightening.

“They were just frightened off because of the problems of access and purchase cycle length and frankly a lack of understanding,” Korski continues. “I thought we had seen the extraordinary transformation of so many sectors, so why is it that this sector which we all rely on – the government – is so slow to transform itself, so slow to adopt some of the new technologies that we know can improve services and make them cheaper? I thought I could probably do something about that with my understanding of government.”

Korski has a point about the slow pace of change in public services. While tech disruption is improving sectors like finance, retail, travel and many more, the inroads into UK public services have been relatively small. Worse, there have been high-profile public procurement calamities, famously including an abandoned £10bn NHS IT system and a £220m e-borders contract fiasco.

Whitehall has witnessed some improvements, notably under the guidance of the Government Digital Service. But its progress too has been patchy. Ex-GDS chief Mike Bracken told a DigitalAgenda audience back in March that “the problem is one of a Victorian infrastructure battling for control in a digital age”. Does Korski agree with that assessment?

dvla-office-entrance“There are parts of the government where people are pre analogue, but then there are other parts of government where there have been extraordinary reforms and real champions who are delivering change,” he says. “Some of the transformations we have seen – the DVLA for example and the work the GDS did and hidden away in various different nooks and crannies where people are working very hard.”

Despite those honourable exceptions government overall does not have a great reputation for IT procurement though, does it?

“My point is that exactly – we are standing before a largely undisrupted industry. That’s also what makes it so exciting,” says Korski. “If everything was up to scratch and digitally transformed than I would have no reason to set up Public and then there would be no reason to do a callout on entrepreneurs to help transform public services.”

In addition, he says, the sense of public expectation has outstripped much of the progress made on digital transformation by public services, especially since the mass adoption of simple-to-use smartphone tech.

“There is a massive shift in what citizens expect,” says Korski. “If you can fly to Japan and back having purchased your ticket on your smartphone, why on earth does it take so long to buy or get access to or be informed of various different public services? And we have all gone through the NHS and wondered why on earth everything has to be scribbled down on paper and why you can’t hook up your iPhone to your medical records.”

“There is a real change in what technologies will now allow us to do,” he continues. “Our ability to process data to deliver it through the cloud to the operational frontline can facilitate a whole series of transactions and services, whether it’s social care operating in the community, police officers and so on.”

So, the technology capacity is there to deliver, and the public appetite certainly demands improvement. What of the policy environment, particularly on public procurement, to allow new startups to play a part in accelerating transformation?

The direction of travel certainly looks in Korski’s favour. In November the government’s chief technology officer Liam Maxwell, confirmed that, as a result of changes to the government’s digital marketplace supply chain, 52% of the £1bn in work on digital innovation for the public sector now came from SMEs, compared to 2010 when 85% of government IT business went out to just 12 companies.

In their election manifesto published just last week, the Conservatives promise “a new presumption of digital government services by default”, alongside a pledge that 33% of central government purchasing will come from SMEs by the end of the parliament.

Plenty of opportunity overall, then. How big in financial terms exactly? According to Public, the global govtech market is worth £320bn, with £45bn spent on UK procurement in 2015.

“The opportunity is enormous,” says Korski. “But at the same time, it’s also an opportunity to save money, because for a long time government has been willing to accept long-term contracts with a series of providers that have not been particularly innovative or given value for money. So there is for investors and entrepreneurs a great opportunity – but I also think for taxpayers there is an opportunity to see money being saved.”

So how will Public’s GovStart initiative work? Like a super-accelerator, the programme will help startups over a six-month period engage with and sell into public services, aided by mentors with public sector experience. The programme is being run by Mark Lazar, formerly of Barclays TechStars, with an advisory board made up of investors, government procurement and technology expertise.

TLA_11May_258For Korski, three key elements that have been missing that have proved obstacles to startups engaging with govtech projects – a lack of understanding, a lack of access and a lack of capital.

“GovStart was our initial way of thinking through how we could best help people,” explains Korski. “We wanted to create a cohort-like process for companies that are in different stages of development focused on different domains, using different technologies. We thought it would be better to try to break through the barriers as a cohort rather than just individually.”

After opening for six weeks in April, entry to the GovStart programme has now closed, with Public having received 130 applications. “For a programme that didn’t exist we have had an extraordinary response rate,” says Korski.

What kinds of technologies, then, are coming through – and what challenges are they trying to address?

Korski says the 130 includes “some amazing companies that are trying to digitise care working, trying to automate CCTV footage, trying to apply blockchain technology to assistance, and trying to use proximity data information from telecom providers to make it easier for local councils to understand needs in their community, and so forth.

“What’s really interesting is that there isn’t one thing we are obviously seeing. A lot of people are attracted to the size and challenge of working inside the NHS, but we are similarly seeing a lot of people very interested in digitising benefit and welfare systems. We are seeing a lot of people seeking to automate different voice and video processes, whether that’s CCTV or conversations between border officers and refugees or tourists on the border.”

Automation is, of course, a massive issue across the economy and a lot of the processes in government involve routines that are open to automation. Is the arrival of tech disruption opening the door to mass job losses?

“There is a definite opportunity around automation, but I also think we have got to be a bit sanguine about how fast that’s going to develop,” says Korski. “What we are definitely seeing is in a number of different ways there is an ability to make a lot of the work of public officials more efficient and therefore free up time.

“Rather than seeing technology as somehow destroying jobs, I like to think of it as helping through technology to make a lot of public services more efficient, thereby freeing up people to do a lot of other things.”

Korski won’t confirm or deny the £50m figure we reported back in November, other than to say “we are now capitalised in order to support the companies that we are interested in supporting. It’s hard for me to say our number is this or that.”

Ultimately, of course, these are public services and the Public operation draws on venture and other private funds. How will taxpayers benefit? “Our argument is we are helping provide cheaper and better services, which ought to be good for the taxpayer,” says Korski. “Ultimately we hope to upgrade the relationship between the citizen and the state.”

Daniel Korksi – CV 

Since April
Co-founder and chief executive,

CBE, David Cameron’s resignation honours

Deputy head of policy to David Cameron, 10 Downing Street

Special adviser, 10 Downing Street

Advisor to vice-president, European Commission

Senior policy fellow, European Council on Foreign Relations

Senior adviser, US Department of State

Team leader, Basrah Provincial Reconstruction Team

Deputy Head, Stabilisation Unit

Committee specialist, House of Commons Defence Committee

Head of political military affairs, Office of the High Representative


Master’s, International Relations, University of Cambridge

Bachelor’s, London School of Economics and Political Science (LSE).

AgendaSetters is DigitalAgenda’s new interview series with the people driving UK digital change.