The public sector is facing a decade of recalibration to adjust to lower spending levels, according to a joint report by Deloitte and Reform.
The State of the State 2015, the fourth annual report from the business advisory firm (Deloitte) and think tank (Reform), collates data on government spending, economic figures and interviews with public sector leaders, and covers four key areas: productivity, debt, financial distress, and the mood in local public services.
Productivity is, the report argues, a neglected area when it comes to reducing the national debt. The authors calculated that boosting productivity and freeing up one hour of public sector workers' time each year can deliver savings of £72m.
‘Public sector staff work hard,’ says Mike Turley, UK and Global Public Sector leader at Deloitte, ‘but helping them work smarter could see considerable savings.’
He continues: ‘Embracing technology, avoiding repetition of efforts and making evidence-based reforms can all help ensure staff time is spent as productively as possible delivering front-line services.’
The report also calculates that current government debt equals £23,428 for every UK resident. If debt interest keeps rising at its current rate, it claims, the Government would be spending more on servicing debt than on public services by 2034.
On the question of financial distress it estimates that over 200 frontline public sector organisations could be at risk and will require intervention during this Parliament. Half of these are NHS trusts, but signs of distress are also evident in local government, police and further education organisations.
Mike Turley warns: ‘Each of the UK's central and devolved administrations need to be clear on the risk of financial failure in the public sector and plan for intervention.’
Finally, The State of the State 2015 also assessed the mood of local public services through interviews with 40 local public sector leaders.
It was found that they expect the redesigning of their services to dominate the coming five years. Many expect to see more cross-sector working, a broader mix of public service providers and leaner public sector organisation more clearly focused on their mission. But, despite the challenges, they are optimistic about this process.
Staff moral, though, is a serious problem and has been severely undermined by redundancies, pay freezes and limited promotion opportunities. This, claim the interviewees, makes it difficult to retain talented people.
Mike Turley concludes: ‘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.’
