Covid-19: The road to rebound for the UK

67% of public sector leaders feel confident their sector can recover in the wake of Covid-19.

53% of private sector leaders feel the same.

While the UK is not yet clear of this crisis by any stretch, the above figures do tell a simple, encouraging story:

Things can, and will, get better.

When the UK entered lockdown in March, it sent shockwaves through our economy and public services.

Business as usual ground to a halt and survival plans kicked into action.

Now, as we find ways to manage in the long-term, one thing is clear: this pandemic has shifted our behaviours and priorities for a long time to come.

Perhaps forever.

To fully understand that impact and all the new challenges and needs fuelled by this crisis, we’ve been speaking with c-suite executive all over the UK,

including some of our own customers.[1]

We’ve been asking them what their priorities are, how IT and digital investment will help them recover, and how it will benefit their employees and the customers and citizens who use their services.

As expected, the level of preparedness across different organisations and sectors is incredibly varied.

The construction industry and the NHS, for example, were most prepared to deal with the challenges created by Covid-19, while retail and education have been hardest hit due to strict lockdown measures impacting their operations.

¹ Source: VMB conversations with 127 customers and Global Data survey (230 c-level leaders within UK enterprise and public sector)

But what about today? As we become more familiar with our changing world, how well placed is each sector to recover? And where should their focus be?

Let’s take a closer look…

The UK economy shrank 20.4% between April and June, plunging the country into a recession for the first time in 11 years.

Companies will feel the pinch in the short-term due to increased taxes, low consumer spend and tough budgetary decisions. Our front-line public

services will also remain under strain as the country faces the reality of a second wave and a shortfall of funds.

Our research shows that different sectors will recover at their own pace, with some capable of rebounding much quicker than others.

Healthcare

Our frontline NHS workers handled immense pressure as we got through the peak of Covid-19, working in an already strained healthcare system.
Purpose-built NHS Nightingale hospitals were created in a matter of weeks and rapid changes in working practices were put in place. We saw a fast uptake of digital healthcare, including the use of remote care and virtual appointments with GPs, and a focus on digital solutions such as the NHS app, where registrations rose by over 100% during lockdown (NHS digital).
The focus now is on improving patient care and reducing operational costs, whilst managing the backlog of non-Covid patients and preparing for the second wave.

Construction

The construction industry experienced a steep decline in revenue during lockdown, when most sites were forced to close. Even companies that remained open due to key worker status suffered from reduced workforces and supply chain issues.
Construction companies are expected to recover quicker than most, partly due to government support to get the housing market up and running quickly. From our research, 20% are now looking to develop a digital transformation strategy because of Covid-19.

Education

On 18th March, the UK government closed around 94% of educational institutions, forcing an immediate shift to home schooling. Teachers and academics quickly adopted digital learning management systems such as Google Classroom in order to deliver lessons to students around the UK through video conferencing.
Recovery is expected to be slow for the education sector as it adapts to the phased return of pupils and to higher education students’ attitudes towards different study environments.
With many students under full lockdown measures and major disruption occurring to ways of learning, regulators and pressure groups have begun lobbying universities to reduce and refund student fees. Income generated from students is the lifeblood of our universities, so this is a huge concern. Because of this, universities will be looking to create efficiencies and get more value out of their investments.

Retail

UK shop footfall dropped by almost 50% year-on-year in July, with many consumers reluctant to return to physical shopping amid the ongoing Covid-19 pandemic.
E-commerce strategies have come to the forefront following a surge in online shopping, and those with a strong online presence are set to the weather the Covid storm much better. Even those that didn’t previously have an online presence are now moving into e-commerce.
As non-essential retail began to re-open its doors again, sales growth is a top priority. But consumer confidence and spending are still an issue, and the retail sector could shrink by 15-25% in 2020 because of Covid-19, as estimated by PwC.
The second wave brings with it fears of further limits on indoor activity, which will impact bricks and mortar non-essential retailers the hardest

Local government

During lockdown, local authorities saw a return to their roots as the guarantors of public health and safety, and also moved quickly to launch digital solutions for their communities. Online council services soared, from housing to libraries, and we even saw council meetings live-streamed.
For local governments, recovery isn’t so much about restarting as it is about increasing efforts to improve digital services, many of which were launched pre-Covid and have accelerated during the pandemic. There will also be a focus on providing better support in the local community, for those who are most vulnerable, young people, those who are low paid, and those in housing.
Despite £1.6bn of funding being allocated to Local Councils to deal with Covid-related pressures, however, the Local Government Authority (LGA) has raised concerns over whether current funds will be enough. The LGA has estimated there will be a 10% increase in the cost of social care alone.

Police and criminal justice system

For police forces across the country, the crisis stretched emergency response services and created a backlog of cases that need to be tried in court.
In response, we saw a shift toward digital evidence submission and remote custody interviews, a new digital home for citizens to report non-emergency crime online, and the high court and court of appeal quickly switched civil hearings to online platforms. PwC estimates that prior to the crisis, 200 cases were heard, at least partially, via video. By the end of March, that number had risen to 1,800.
The justice sector is looking to permanently role out benefits they’ve experienced through Covid-19. Forces now see a need to future-proof, using digital services to reduce the strain on emergency response teams.

The pandemic has pressed the fast-forward button on many technological trends that had already started or were being planned for: remote working, virtual contact centres and cloud adoption, to name a few.

From our own experience during Covid-19, we’ve been working closely with customers to deliver digital transformation projects in weeks, even days, that would previously have taken months or years.

From enabling GPs to deliver virtual consultations to call centres routing customers through to people’s homes, we’ve witnessed rapid changes that have impacted thousands of people nationwide.

But as organisations move on from a period of stabilising and responding to the crisis,

they’ll need to identify where investment will deliver against their objectives.

This is happening right now.

Half our customers have increased their IT budgets as a result of Covid-19.

And half of public sector organisations we surveyed are already working on plans to deliver more services digitally as they move towards rebound post-pandemic.

The priorities for tech investment will be providing reliable services and meeting the demand for more effective, secure and streamlined services. There will likely be a realisation that cloud is the route to achieving those things, which will drive more cloud adoption and a need for greater understanding.

Covid has increased the importance of pre-existing tech trends and reignited a focus on infrastruture as many of the organisations felt the pain of changes in demand.

While everyone has their own opinions on working from home, many people have benefited from it due to increased work-life balance and reduced travel costs.

But are organisations really planning to make it the ‘new normal’?

For the majority, the answer is yes.

63% of all public sector customers we surveyed said they will continue flexible working practices. 55% of enterprise customers said the same.

When lockdown began, many organisations made fast,

temporary decisions on implementing and upgrading technology. Understandably, there was a focus on short-term fixes to respond and adapt to the crisis.

Now those organisations are looking at how they can make those technologies and processes work better in the long-term. Especially since government advice has reverted to “work from home if possible.”

More than ever, there will be a renewed focus on driving value, whether that’s through improving return on investment and flexibility, ensuring security as standard or driving positive change in employees and for customers and citizens.

Continued focus on collaboration
and conferencing

Security expected as
standard

Re-evaluation of IT decisions
made during pandemic

Non-essential tech is
likely to be sidelined

Rebound: realisation that
cloud is the way forward

The road to rebound will be long and difficult for many.

But the way organisations have adapted to new ways of working during the pandemic shows what all of us can achieve.

The second wave has led the nation to prepare for another period of instability and further economic uncertainty. But once we emerge into a post-Covid world, a renewed focus on investment in digital transformations will drive performance and value in the long run.

Collaboration
No1.Spend
Formalisation
MS Teams

Major concern
Cyber attacks
VPN suitability

Acceleration
Economic uncertainty
Understanding

Reliability
Capacity
Security

Flexibility
ROI
Social value

Whatever comes next, we’re confident in the resilience of our UK customers.

We know that:

1. UK plc and the public sector largely been able to weather the storm of Covid-19, and through rapid improvements in technology and infrastructure many organisations are now better prepared to rebound.

2. Investing in the right IT and digital solutions has never been so important. They will play a vital role in helping organisations grow and deliver better outcomes for their workforce and those who use their services – pandemic or no pandemic.

So how do we improve the everyday for businesses and organisations?

Only then can we deliver what’s needed for the UK economy, our society and our people.

Covid-19: What does the UK’s
road to rebound look like?

How prepared was your
business to deal with Covid-19?