Public sector could save billions without cutting frontline services
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Version 0 of 1. With UK chancellor George Osborne so keen to balance the nation’s books, unprotected Whitehall departments can expect cuts of £13bn by 2020 in next week’s emergency budget and the NHS, despite its “protected” status, will still need to make substantial savings. A daunting task, but the public sector could absorb budget cuts without cutting services – if our politicians can be brave enough to push through some radical changes. Local government still has scope for major efficiencies. Last year a Commons’ select committee inquiry into local government procurement [pdf] identified potential savings of up to £4.8bn through creating a single procurement and contracting organisation for the whole sector. Huge scope remains for savings through shared services with other local authorities; for example, Hammersmith & Fulham, Kensington & Chelsea and Westminster City councils are on track to save £43m a year by sharing a chief executive and combining services such as adult social care, environment, ICT and HR. New service models, including partnerships with the private sector, use of mobile technology and social media and the creation of combined authorities, like Greater Manchester, provide further exciting opportunities. Related: Whitehall not permitted access to two thirds of outsourcing contracts – report The NHS could save £22bn a year, according to its five-year plan [pdf]. Is this realistic? Not much more can be squeezed from the pay freeze (£1.7bn so far) or from tariffs charged by NHS trusts, for operations for example (£4.5bn over two years). However, savings will come through new care models, better use of IT and national adoption of local initiatives, such as Bristol’s home healthcare monitoring. The long-overdue clampdown on bringing in agency staff should save £1bn a year. Shared services should be the norm and joint procurement and facilities management alone should deliver a further £1.9bn in savings. Failures to treat mental ill health costs the NHS £14bn a year, according to Andy Bell, deputy chief executive of the Centre for Mental Health; tackling this could contribute greatly towards the £22bn target. NHS trusts are independent, meaning that quality of care and efficiency remain a postcode lottery. The 2015 review of NHS productivity [pdf] by Labour peer Lord Carter failed to challenge this devolved structure, which results in a huge amount of duplication (mostly back-office services) and a failure to adopt the best innovations throughout the service. Also, had the review engaged effectively with patients, a raft of opportunities would have come to light. As with agency staff, efficiencies and best practice will need to be enforced, which would require Simon Stevens, chief executive of NHS England, to have line management authority over the chief executives of NHS trusts. Other efficiency opportunities include the police service, which could save £450m a year through joint procurement and shared services. The One Public Estate programme, which aims to make efficient use of public sector land and properties, should also deliver significant savings and generate income. Related: UK voters are being sold a lie. There is no need to cut public services The ease with which Whitehall departments have found a further £3bn savings this year suggests there is plenty of opportunity left. However, it looks as if many future savings will come from cutting funding and services provided by the public bodies for which they are responsible, rather than through efficiencies. Whitehall must now be forced to lead by example. Single organisations to provide IT, HR and procurement would save many millions; they should be quickly forced on a reluctant Whitehall. The Crown Commercial Service should be the sole provider of procurement, contracting and commercial services for the civil service. Just a 5% procurement saving forgovernment departments would be worth nearly £2bn a year. The Ministry of Defence plans to make £3bn procurement savings by 2023/4. The potential for public sector efficiencies would appear to be at least £35bn a year, over one third being from unprotected budgets. Will government ministers have the courage to take tough decisions or will they talk efficiency but rely on service cuts smoke and mirrors to achieve the savings? Talk to us on Twitter via @Guardianpublic and sign up for your free weekly Guardian Public Leaders newsletter with news and analysis sent direct to you every Thursday. |