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15.10.15

Boosting public sector productivity and freeing up time could save £72m a year

Boosting productivity by reforming working habits and freeing up just one hour of public sector staff time each year could deliver savings of £72m, a new report by Deloitte and think tank Reform has found.

The report looked into the “decade of recalibration” that the public sector faces, including adjusting to lower spending levels, to assess what could be done to tighten expenditure.

It found that if productivity savings were broken down across devolved governments, UK savings could reach almost £58m in England, more than £7.2m in Scotland and £4.3m in Wales.

The report suggested Whitehall can lead productivity gains in five distinct ways:

  • Embracing digital technology, which has a significant role to play in cost-efficient working. Researchers argued its use should be accelerated, building on the success of bold projects, such as moving away from paper tax discs last year, to illustrate the scale of its potential. This would also require that staff change their mind-set in order to reimagine processes in the digital age rather than recreating analogue activities in digital form.
  • Making productivity less abstract and more meaningful for the sector by adopting a framework and guidance for measuring productivity, best practice examples and shared definitions to demystify the term and speed up change.
  • Stimulating links between interdependent and overlapping parts of the public sector. This is particularly relevant in times of devolution deals, which pose considerable potential to deliver productivity gains through cross-sector connections. Coordination across government departments and local public bodies also holds exceptional promise.
  • Backing the public sector in evidence-based reforms that may seem counterintuitive and challenge widely-held believes. The report cited a citizen view that police ‘on the beat’ help deter crime, but research suggests that officers do more when deployed in targeted ways. It also pointed to a study for the Department for Education that found extra funding in itself does not improve schools’ performances. Evidence-based insights can challenge popular thinking and mend the gap between citizen views and operational working.
  • Supporting a move towards more customer-centred services. This includes user feedback, especially in digital services, and social media. It cited a survey for Collaborate that found the most important characteristic for organisations delivering public services is better understanding people’s needs.

Mike Turley, Deloitte’s UK and global public sector leader, said: “Productivity is a challenge for the whole economy, but little attention is given to its role in mending the public finances.

“Public sector staff work hard, but helping them work smarter could see considerable savings. Embracing technology, avoiding repetition of efforts and making evidence-based reforms can all help ensure staff time is spent as productively as possible delivering frontline services.

“Improving productivity should not be a one-off, it should be a continuous process for the future.”

And, Andrew Haldenby, director of Reform, which favours market solutions to public policy issues, said the tightened public finances posed a new era for the welfare state, meaning the public sector must learn to get leaner, fitter and more productive.

Public debt

The report also looked at public debt, financial distress and the overall mood of the sector. In terms of debt, it calculated that if debt interest keeps rising at its current rate, Whitehall will be spending more on servicing debt than on public services by 2034.

Turley commented: “Such a high level of debt exposes the UK to risk from further financial crises and interest rate changes. The level of debt is also a burden on the taxpayer, debt interest this year alone is more than the government spends on policing and justice, and for future generations, a child born at the height of the financial crisis might still see this debt legacy on the government balance sheet into their adulthood.”

It also estimated that over 200 frontline public organisations could be at risk of financial distress and would require intervention in the course of this parliament. Although half of these are NHS trusts, alarm bells also ring in local government, police and further education organisations.

The estimation, which aggregates warnings from various central and local government watchdogs, suggests a “turbulent time ahead” for public services, with some requiring support from others in their sector or financial help from Whitehall.

Overall workforce mood

Researchers also interviewed over 40 local public sector leaders collectively responsible over the £16bn public spending, asking them about challenges they face and how they adapted to them.

A resounding opinion was that leaders expect the redesigning of their services to dominate the next five years – but remain optimistic about it despite recognising its challenges.

But despite the optimism, researchers found that morale amongst staff suffered as a result of redundancies, pay freezes and limited promotion opportunities, with leaders saying they need to retain talented staff now more than ever.

Leaders also expect their organisations will have retrenched into core statutory activities by 2020, with many looking to see cross-sector working, a greater mix of public service providers and leaner organisations more clearly focused on their missions.

Turley said: “Local public service leaders speak with pride about how they have coped since 2010, but the work continues.

“The next five years will see challenges in redesigning and refocusing local public services and those leading them are optimistic about managing this. But it will require strong political leadership and honest conversations with the public about what the public sector can, and cannot, continue to provide.”

Comments

Biggles   17/12/2015 at 13:39

As little as £72M?

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