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What a week for public service

29.06.10

Since the emergency budget was unveiled by George Osborne, there has been a considerable amount to take in and think about in the context of our personal lives and work. In this briefing we give our analysis of the implications for public services, and highlight the key issues that will shape the agenda of decision makers over the coming months.

A key plank of the budget was a recognition that a long-lasting economic recovery must have its foundations in the private sector, not the public sector, and that businesses across all regions need the right conditions to be able to grow. Clearly, some of the Government's thinking here is that as the public sector contracts to achieve the spending reductions announced, it will create headroom for the private sector to expand, perhaps taking on functions or services previously delivered by the public sector.

Across the public sector, the urgent action announced to tackle the deficit included additional reductions in spending of £30 billion a year by 2014-15.

While final departmental settlements - and the split between departmental expenditure and annually managed expenditure on welfare - won't be set until the Spending Review on 20th October 2010, reductions of up to 25% are expected over the next four years.

However, announced immediately is a two-year public sector pay freeze (with protection for the 1.7 million public servants who earn less than £21,000 a year) and an independent commission to undertake a fundamental, structural review of public service pension provision. David Cameron, in his response to the televised "Meet the Audience" has already confirmed that public sector workers should expect to pay more into their pensions and in the end get less out. Government will also work with local authorities to freeze Council Tax in 2011-12 and it is reasonable to assume there will be further restrictions beyond that.

So the headline is certainly not a rosy picture for local government. Who in local government today is likely to agree with Eric Pickles who said recently "there has never been a better time to be involved in local government?"

There will be unprecedented challenges for leaders and managers - during major organisational change - to keep staff motivated and focused on both high quality service delivery and on achieving this level of savings. If the challenges are to be successfully met, there are 4 key issues EiB believes public service managers must face and address immediately:

  • How to deliver services that not only meet but exceed customer expectations while at the same time making savings and addressing the call for the Big Society and a new localism;
  • The need to carry out a rigorous and detailed review of every service to achieve the required 25% savings over the next four years. The scale of the saving demanded means no single proposal will be enough and there will need to be packages of proposals. Strategic options must as a minimum include: making services radically more efficient; sharing both front line and back office services with others; out-sourcing to other organisations; and withdrawing part or all of some services completely;
  • How to achieve the 25% saving challenge when there will be either statutory or de facto political ring fencing of some services. A focus only on discretionary services will not deliver the target. This will mean seeking radical and innovative new models for service delivery, thus breaking new ground with some statutory functions;
  • How to make savings much more rapidly than in the past, when saving money in the public sector has taken time. Consultation with customers, staff, unions and other players has sometimes dragged on for years. For example, progress on sharing services has been painfully slow. If 25% of cost is to be saved over four years the public sector must be prepared for much more demanding timescales to avoid savings being back-loaded to year four with real risks of failure.

Yet councils have an outstanding record of rising to challenges, of making things work and of serving their communities well. Councils that prioritise services to deliver the greatest impact, that understand and respond to the customer journey, that are prepared to innovate and try other ways of service delivery are the ones that will emerge stronger, recognised by their communities as adding real value to the quality of life.

EiB has over 15 years of detailed, hands on, experience of addressing the big issues in public services. We have worked with over 50 local authorities across the UK, helping them to rise to and overcome past challenges that have appeared daunting at the outset. We have a wealth of expertise in key areas that will be critical to overcoming these new challenges.

Our approach is pragmatic and grounded in real understanding of the ethos that exists among public service officials and political leaders at every level. Transformational change demands as much attention to the creation of the initial strategy as it does to the structuring of programmes of delivery and the management of the implementation. Throughout, there has to be a real and continuing focus on the benefits being sought and the achievement of service levels. Our toolbox addresses all of these aspects, around a core discipline of value management and lean delivery.

We would welcome the opportunity of discussing your specific issues and outlining some of the options for addressing them. If you would like a face to face discussion - strictly on a no-commitment basis - we should be glad to meet with you.

Please contact one of our specialists by contacting the relevant adviser below.

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