Connecting Scotland programme: full business case

1. Introduction

1.1 Purpose of document

This Full Business Case (FBC) sets out detailed proposals for the set-up and operation of a revised service delivery model, which will support sustainable delivery of internet-enabled devices, connectivity and training to groups of excluded people across Scotland.

The FBC builds on the Strategic Outline Business Case (SOBC), which was approved by the Cabinet Secretary for Finance and Economy in March 2022. It follows standard His Majesty’s Treasury (HMT) guidance and is aligned to both the Green Book and the “5 Cases” Model.

This FBC sets out a recommendation for the revised service delivery model, as highlighted in the executive summary, with further contextual detail provided throughout the document to assist in Ministerial decision making.

1.2 Background to Connecting Scotland

Connecting Scotland is one of the most ambitious and comprehensive national programmes aimed at tackling digital exclusion in the world, unmatched elsewhere in the UK. The programme delivers internet enabled devices, internet connections and provides training and support to individuals and communities who are digitally excluded.

Connecting Scotland offers a complete digital connectivity support service to other government policy areas. It works with teams to analyse available data, desired outcomes and the stakeholder landscape. Through this process, requirements are scoped out which are bespoke to each case. The route from conception through to delivery is streamlined as the team has incorporated access to suppliers and expertise for connectivity, kit and training. This provides a direct method of meeting Ministerial commitments around subjects such as tackling poverty, improving outcomes as set out in the National Performance Framework and the Digital Strategy for Scotland, increasing productivity, access to education and skills, access to services and building better communities.

1.3 Vision, mission and values of Connecting Scotland

Connecting Scotland’s vision is a fairer, more equitable Scotland, enabled by digital access for all. Its mission is for Scotland to be among the most digitally inclusive nations in the world. The programme aims to ensure that everyone in Scotland has access to digital services by providing them with an opportunity to confidently access devices, connectivity, skills and support.

The programme’s mission is to enable and empower individuals and communities to access the economic, cultural, social and democratic benefits of Scotland’s digital society through being actively digitally included and digitally confident.

This mission will be achieved in collaboration with various partners providing digital services and wrap-around support in the public, private and third sectors. This will help make digital inclusion one of the solutions to alleviate poverty while maximising the potential for individuals and communities to flourish.

“The device is wonderful; I can do the things I need to so much more easily. I‘ve been able to change providers to help save money at home. Look at the benefits that the kids are entitled to, and my kids are able to do the same activities their friends are doing online for school. They are happier and that helps. I don’t feel so useless or powerless” Quote from a client who received a device and support from the programme

1.4 The journey of Connecting Scotland

The Connecting Scotland programme built on the success of ten years of digital participation work, co-ordinated between Scottish Government and SCVO, it was initiated in March 2020 in response to the COVID-19 pandemic, which highlighted the needs of those at additional risk from the impacts of lockdown due to being digitally excluded. These risks included social isolation, inability to secure online deliveries thereby affecting their ability to ‘stay at home’, challenges in accessing health and social care and other public service support, and the increased risks around mental health and wellbeing more generally.

Originally targeting up to 9,000 individuals at a high clinical risk of COVID-19, the programme has continued to expand and provided packages of support to over 61,000 users by the end of 2022. The service model that has been used to achieve this, delivered in partnership with the Scottish Council for Voluntary Organisations (SCVO), consisted of three key elements: it provided individuals with a device (iPad or Chromebook); connectivity (two years of unlimited data); and training and support.

The success of Connecting Scotland was underpinned by close partnership work across the public, voluntary and private sectors, coming together to support the most vulnerable people in Scotland through unprecedented times. Thirty-two local authorities and over 1,000 organisations that work with digitally excluded individuals participated in the delivery of the programme across the country.

The programme was delivered through a series of phases as additional funding was made available. The table below sets out a summary of the phases delivered to date.

Phase	Date phase announced	Funds £	Target group	Target numbers	Delivered
1	May 20	5M	People at a high clinical risk of COVID-19	9,000	April – July 2020
2	Aug 20	15M	Young care leavers & families with children	23,000	August 2020 – April 2021
Winter Support	Nov 20	4.3M	Socially isolated / older and disabled people	5,000	December 2020 – March 2021
3	Jun 21	26.6M	Employability Digitally excluded / low-income households	23,000	June 2021 – September 2021 August – December 2021

In addition to these initial phases, 2611 internet-enabled devices and 2104 MiFi units have been delivered to displaced people from Ukraine as part of a fast-track support programme.

1.5 Impact of Connecting Scotland

Our own research shows the extent to which Connecting Scotland has positively impacted on people’s lives and its effectiveness in combatting isolation and supporting people to shield through the Covid pandemic. Of those responding to our first impact survey of clients:

89% agree or strongly agree that getting access to the internet has helped them to cope with being at home due to COVID-19 restrictions

86% told us they were more able to stay in touch with family and friends

83% told us they were more able to find interests to stay mentally active

74% told us that their mental health has improved

86% told us that their digital skills had improved during their time with Connecting Scotland

In interviews, clients told us how they had benefitted from the devices, connectivity and training they had received from Connecting Scotland.

• “Now I can go on facetime and everything and see my daughter and grandkids. It’s brilliant, it’s changed my life. It’s like day and night.”
• “Without a doubt it’s been one of the most life-changing things that has happened to me… it’s pushed my boundaries, made me think outside the box a bit, given me so many more opportunities.”
• “It’s made a big difference to my life; I don’t feel as out of touch as I did… I feel as though I should feel estranged because of my disability but I really don’t.”

Subsequent phases of Connecting Scotland targeting different at risk or vulnerable groups have helped people unlock the potential of the internet. This includes being able to access job opportunities, education, online transactions such as banking, online healthcare services. It also helps them to support their children to access online classrooms and to complete schoolwork. Further detail on the benefits realised from the programme to date and those identified for the new Connecting Scotland service can be found in the Socio-economic Case.

The following quote from the Blake Stephenson Independent Organisational Research into the Connecting Scotland Programme^[1] summarises the success of the programme to date:

“Connecting Scotland is a unique and ground-breaking programme. It was set-up and implemented at the height of the pandemic in response to an immediate need for digital connectivity that is unprecedented. A programme of this nature has never been done before on this scale and the speed at which it was implemented, especially given the ongoing restrictions in place due to COVID-19, is impressive.”

1.6 A digital society in Scotland

With Scotland’s ambition to embrace being a digital society, there has been a shift towards digital first and a need to transform public services to cater for varying levels of capabilities, simplify online forms and enhance the online information readily available online. Services delivered face-to-face in local offices or on the telephone have a much higher associated cost to governments and the public purse than online services. The U.K. Digital Efficiency Report^[2] estimates face-to-face visits at a cost of £8.62, phone calls at £2.83 per call and £0.15 per online transaction. The Good Things Foundation Report ^[3] summarises savings realised by digital inclusion as 20 times cheaper than by phone, 30 times cheaper than by post and as much as 50 times cheaper than by face-to-face meetings.

The Lloyds Bank UK Consumer Digital Index (2022) ^[4] noted that people earning less than £20,000 each year who have the highest digital engagement may make savings 3.6 more frequently and save 3.5 times more money on monthly utility bills in comparison with those with the least digital engagement. High quality healthcare services and educational services are also available online, further enhancing the life chances of those that can access them.

92% of businesses require or want a basic level of digital skills from employees (World Skills UK 2021).^[5] Employers are willing to pay more to those individuals with essential digital skills as digital skills have been linked to increased productivity. The Lloyds Bank U.K. Consumer Digital Index (2022)^[6] reports that manual workers with ‘low’ digital engagement earn £442 less per month than more digitally engaged peers in the same roles.

Fixing the digital divide is about more than supporting people who are ‘offline’ so they can go ‘online’. A considerable number of people only use the internet in a ‘limited’ way – this often reflects a lack of affordable internet and/or digital skills and/or confidence and motivation. Using the latest data from Ofcom on adults’ media use and attitudes,^[7] Prof. Simeon Yates has repeated his analysis of different types of internet users – allowing comparison of ‘extensive users’ of the internet with ‘limited users’ and found that compared to extensive users, people who are limited users are:

• 4 times more likely to be from low-income households (social grades D and E)
• 8 times more likely to be over 65 years old
• 1.5 times more likely to be from Black, Asian and minority ethnic groups.^[8]

The study estimates that in Scotland 32% of people are limited users.

Home internet access in Scotland has increased steadily over time, reaching an all-time high of 88% of households in 2019.^[9] However, the data also shows us that cost and affordability remain significant barriers to digital inclusion. The term data poverty is used to describe the situation whereby individuals, households or communities cannot afford sufficient, private and secure mobile or broadband data to meet their essential needs. Data poverty and income poverty intersect. Home internet access for households with a net annual income of £10,000 or less was 65% in 2019, compared with almost all households (99%) with a net annual income of over £40,000. Location is important too – households in Scotland’s most deprived areas were less likely to have home internet access than those in less deprived areas. 82% of households in the 20% most deprived areas in Scotland had internet access at home compared with 96% of households in the 20% least deprived areas.^[10]

The Nesta Data Poverty in Scotland & Wales report (2021)^[11] highlights that individuals and families’ need for data are often not adequately met, meaning that they may be connected but remain compromised. One in ten people with monthly mobile contracts regularly run out of data before the end of the month and larger households struggle to meet very high data needs. Adults living in more deprived neighbourhoods, those with disabilities, adults who feel less confident reading in English, adults who live with children and those in larger households are significantly more likely to experience data poverty.

1.7 Developments since the last Business Case

Several developments have taken place since the OBC (September 2020) and SOBC (March 2022) were completed. The Scottish Government announced some major policy decisions that affect Connecting Scotland. These, in addition to developments concerning available resource and budget, are outlined below.

1.7.1 The Digital Strategy for Scotland, March 2021

Connecting Scotland is one of the priority strategy actions from the Digital Strategy, with commitments to:

“Build upon our Connecting Scotland programme to go beyond the 55,000 people we will support with equipment and data packages by the end of 2021 and work collaboratively with all sectors of our economy to achieve world leading levels of digital inclusion. Together, we will provide training opportunities, support and materials to ensure that people have the skills, confidence and information literacy required to make the most of being online.”

“Build on the Connecting Scotland programme to provide equipment and data packages and digital skills training to those in need.”

1.7.2 SNP Manifesto, May 2021

The SNP Manifesto cited Connecting Scotland:

“Closing the Digital Divide

The Connecting Scotland programme was established initially to support 9,000 people who were at clinical risk from COVID-19 to get online by providing them with a device, data, training and support. Connecting Scotland will now support 60,000 people to get online by the end of this year backed by over £48 million.

Over the next Parliament, we will go further and with £200 million of investment will support up to 300,000 households to get the devices, data and skills to Connect.”

1.7.3 Programme for Government, October 2021

Scottish Government commitments covering the lifetime of the current parliament (2021-26), including its Programme for Government 2021-22, included the following commitment:

“Ensure a connected Scotland and tackle the digital divide, improving access to superfast and gigabit capable broadband and bringing 4G to rural and island communities, and extending the Connecting Scotland programme to get 300,000 households online by March 2026.”

1.7.4 The National Strategy for Economic Transformation, March 2022

The Scottish Government unveiled its National Strategy for Economic Transformation in March 2022; this sets out a 10-year plan to develop “a nation of entrepreneurs and innovators who have embraced the opportunities of new technology, boosted productivity and focused resources on the innovations that will make the biggest differences, not just to our economy and our society here in Scotland but on an international basis”.

There are no specific mentions of the Connecting Scotland programme, but the link between addressing digital exclusion and economic success is made throughout the document, including:

“This will reorient our economy towards wellbeing and fair work, to deliver higher rates of employment and wage growth, to significantly reduce structural poverty, particularly child poverty, and improve health, cultural and social outcomes for disadvantaged families and communities”.

And

“Our Covid Recovery Strategy focuses on the efforts we require to tackle inequality and disadvantage. If our people are secure and have firm foundations then our communities, businesses, economy and society will be more resilient. Our third sector organisations have led the way in adopting innovative, person-centred, holistic services which wrap around families and individuals. The aims of the strategy are: address the systemic inequalities made worse by Covid; make progress towards a wellbeing economy; and accelerate inclusive person-centred public services.”

1.7.5 Scotland's Fiscal Outlook: The Scottish Government's Medium-Term Financial Strategy, May 2022

The Medium-Term Fiscal Strategy provides context for the Scottish Budget and frames the Resource Spending Review and Capital Spending Outlook. The publication highlights the following risk around meeting child poverty targets considering the current financial climate:

“Inflation is already at a 40-year high and expected to climb further. Higher fuel and food costs driven by the situation in Ukraine will exacerbate the cost-of-living crisis and disproportionately affect lower income households, making the Scottish Government’s child poverty targets harder to achieve.

Programmes will need to be targeted as far as possible to support low-income households and the Scottish Government will continue to do everything within our powers and fixed budgets to ensure our people, communities and businesses are supported as far as possible.

Meeting child poverty targets will also require investment and the Resource Spending Review provides the overall spending envelopes in which this will happen.”

Transitioning government services and support to digital means can provide cost and efficiency savings, as highlighted in the above report. Without addressing the problem of digital exclusion, these will conflict with the Scottish Government’s primary policy aim of generating inclusive economic growth, which makes programmes like Connecting Scotland an essential component of government policy.

1.8 Current fiscal climate and the cost-of-living crisis

The economic climate has been impacted by events throughout 2022. A combination of rising energy prices, high inflation and the ongoing effects of the COVID-19 pandemic have resulted in a cost-of-living crisis, with the target users of Connecting Scotland among those most acutely affected.

Resources are limited, not just for citizens, but for government departments, third sector organisations and businesses too. At the same time, programme costs have increased along with inflation, while the costs of operating digitally enabled devices for users have also increased.

The resultant situation makes the case for Connecting Scotland even stronger, despite the increased costs. As the cost of transport, accommodation, food and heating rise, groups facing digital exclusion face more barriers to accessing health care, education and services that are crucial to everyday living.