James Brown, head of communications, marketing and engagement at Liverpool Community Health NHS Trust explained how having limited access to the internet is stalling modernisation.
He said: "IT development is happening but it is very slow, in terms of the technology and systems we are 10 years behind the commercial sector. Our IT systems are good and our web developers are good but when they can't access YouTube there's a problem."
Jon Toothill, services director at Lightbox Education, said: "A good example of these excessive restrictions can be seen in schools. School's access to information on the web is very limited, so YouTube and social media access is very restricted. However there are a lot of initiatives for teachers to share their knowledge and best practice, and these are the best channels to achieve this.
"There is a definite conflict of trying to control what people can do to prevent them wasting time but also giving them access to things that can help them to improve and develop."
The 'fear factor' of the openness of social media and is one of the main barriers for the public sector in embracing these new platforms. Tim Bevington, head of corporate communications at Cheshire Fire and Rescue, said: "With social media, we see in the press how the misuse of the systems by one individual can affect the reputation of the whole company.
"This then leads to inhibitive restrictions across the board and there are web teams working on things that they cannot even see themselves - it causes ridiculous conflicts in being able to take things forward."
Brown continued: "The irony of these restrictions is that more and more people now have smart phones with restriction free internet access. The restrictions are in place to stop people using the internet to waste time and such but they can do this sat at their desk with an iPhone.
"As an NHS trust we have thousands of followers on Twitter but for a period of time we had to access the social media site through our smart phones to do anything with it."
Not only are these restrictions affecting technology innovation in the public sector, excessive red tape is costing the sector money where it could be making massive savings.
The panel discussed how the process for pitching for the public sector has become so complicated and wrapped in red tape that some companies no longer try to win these contracts.
Tom Cheesewright, communications consultant and founder of IO Communications, said: "A company that I worked for stopped pitching to the public sector as a policy because it was just not worth our while. It was easier to pitch to massive companies for bigger jobs than to the public sector for jobs a fraction of the size."
David Carter, head of Manchester Digital Development Agency, told the panel that because the barriers are so high, the costs are pushed up on both sides making outsourcing worthless.
He said: "In many cases the savings that are made from outsourcing to other companies are cancelled out because as a council we have to adhere to contract compliance. For example if we were to outsource our IT services we would then have to employ a lawyer to check that the contracts are correct and that we are completely compliant."
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