Originally published in Cities Today.

In many parts of the world, most signs of the pandemic are already slowly going away — restaurants, stores, and gyms are re-opening and live events have resumed. Unfortunately for municipal governments, some signs of the pandemic may never leave completely.

Permanent and temporary business closures have dwindled tax revenues. At the same time, unemployment and health expenses have cost governments additional money, forcing them to reduce spending on education and infrastructure. A recent study of 13 major cities across the US found that projected budget shortfalls for 2021 ranged from 1.9 percent to 17 percent below the budget set in the previous year. Shortfalls were also related to the city’s revenue mix. For example, cities reliant on wage taxes were expected to face larger budget shortfalls.

To minimise the impact of reduced available funds, governments must turn to digital transformation to help citizens access benefits and maintain levels of service that they have come to expect.

Although government services are notoriously slow to change processes, the pandemic forced a severe upheaval in how they interact with citizens. Many in-person experiences were abruptly digitised, with customer service moving online. For initiatives that had to be done in-person, many governments implemented queue and appointment management systems to improve the flow of traffic and reduce capacities in buildings. In a matter of weeks, governments went from hesitant to digitally transformed. And it’s that sense of urgency that will be needed to sustain new initiatives and transformation throughout budget shortfalls.


Automation and artificial intelligence (AI) are great places to start when considering limited government spending. Automating routine tasks can allow government workers to save time on non-core tasks and focus on things that will increase throughput and improve value to their citizens. A report from Deloitte predicts that, with adequate investment and support, AI could produce 27 to 30 percent time savings for government workers within five to seven years. The other benefit of automation is that it won’t reduce government jobs. Instead, it will require government workers to upgrade their skills to work in a technology-enabled environment.

Citizens are the primary focus of municipal governments, and keeping them happy should be a priority. That’s why it’s important to focus digitisation efforts on aspects that will improve the citizen experience. With the vast amount of data available to governments, it can be easy to track where citizen pain points are and then implement solutions. With queue management software, surveys can be sent out following a citizen’s visit to a government services office, collecting information about their experience and ways to improve. Automated scheduling software is also a good place to start, as it will help your office cut down on no-show appointments, further reducing wasted time. Improving mobile experiences is also important, especially since 42 percent of citizens access government websites from their mobile devices. Providing optimal experience both in-person and online is critical.

Digital transformation

It may seem counterintuitive to invest in new technology amidst budget shortfalls, but the cost and labour-saving benefits are clear. Upfront investment, as well as training and upskilling, are small prices to pay when they can reduce overall government costs while improving the citizen experience with government agencies. Throughout the pandemic, governments were forced to implement short-term solutions to ensure that service disruptions were minimal during closures and stay-at-home orders. And most citizens thought it was successful.

Globally, 52 percent of citizens thought that governments and public services used digital technology effectively in response to the pandemic. There is also a desire among citizens for more digitally enabled public services. The signs are clear: digital transformation is here to stay. It’s time that municipal governments upgraded their offerings to improve the citizen experience while managing budget shortfalls.