Now the dust has settled on the Comprehensive Spending Review and Autumn Statement, the reality of delivering taxpayer value in a skills-deprived age of austerity is the challenge. While the first stage of the austerity agenda has focused on revenue cuts and scaling back of resources, there appears to be little choice but to ensure that the next step is about transforming the way public services are delivered. A key enabler to this will be to crystallise new expectations of what society needs – rather than what it wants – from the public sector.
Years of headcount pressures are likely to require new ways for government to engage both internally and with the private sector. With a need to shift from hands–on delivery to hands–off governance, there is a real opportunity for the public and private sector to collaborate and innovate as never before.
Procurement will be key to facilitating transformational change. Through its procurement function, government can access and leverage the market, bringing in fresh thinking to the way services are delivered. This will be a necessity and not limited solely to private sector expertise. The government’s departmental revenue cuts raise some challenges around skills. As the number of civil servants further erodes, are the right people with the right skills and tools in the right place to efficiently procure and manage contracts? Many departments might currently find themselves short of these types of capabilities so there must be a push to raise the skills they have, as well as capitalise on private sector expertise. Importantly, effective procurement and contract management can bring real value, but not if approached in the same old way.
SHARPENED COMMERCIAL FOCUS
Changes are likely to include smarter procurement techniques and the revisiting of contracting mechanisms such as outcome-based methods. Both can help achieve greater innovation and efficiencies, as well as a more strategic approach to supply chain management. But there is also a cultural shift needed if public sector bodies are to gain more commercial focus. This may lead to a rise in innovative new business models – such as Local Authority Trading Companies – which would provide public sector bodies with alternative delivery routes and the ability to generate income. Such new ways of working would also help motivate a future public sector workforce previously constrained by the inflexibility of former delivery methods.
Empowering people to act commercially may be a challenge for some in the service. But encouraging staff to take more risk in pursuit of opportunities will help drive a more commercial attitude. With responsibility for public funds, there is no doubt that the public sector must operate sensibly when it comes to taking risks, but qualifying risk more efficiently will help improve commercial focus.
Enabling those in public service to embrace this change in a safe environment will require leaders and politicians to play their part in communicating to society a new expectation of services from public sector employees. After all, we are now in an environment where funding for public services is at a lower level than in recent decades yet we face ever-changing expectations and challenges associated with this new world, including age demographics, and cyber and physical security.
TECHNICAL INNOVATION
Technology will undoubtedly play a significant role in the transformation of services and is seen by many as a vital enabler for change. Earlier this month Baroness Martha Lane Fox set out her digital proposals for the NHS. Among her recommendations to the National Information Board are free wi-fi in every NHS building and building basic digital skills in the NHS workforce to ensure everyone has the digital capabilities required to support people’s health needs. Digital tools and technologies could help transform health and social care services, but there is scope for digital development to improve other areas of the public sector too. Use of technology in procurement for example, could free up teams to concentrate on more strategic activity.
Certainly a focus on making best possible use of technology will help equip the public sector for a new era of service delivery. And the sale of assets such as buildings and land will no doubt help unlock money to enable different ways of working. These sales will enable cash flow but demonstrating the reinvestment will be key. Otherwise such moves could be seen as a loss to taxpayer assets. Helping transform service delivery will enable public sector entities to deliver customer service with fewer resources, although the measures will have to change. The focus on retaining taxpayer value will however remain.