There are few things in life which are inevitable (death and taxes aside!), but one thing that appears to be certain is that the public sector will begin to see a cut in real terms in spending over the next year or two, and who knows when the money will return? Forward thinking public sector organisations are already planning for this now, and are streamlining their organisations in preparation. The better organisations are transforming their services to make them leaner and fit for purpose. For others who don”t have the vision; or lack the will to transform, cuts in services will become a reality. Which leads us on to the million dollar question(s); What, how and where will they decide to cut?
There is a distinct possibility that the more vulnerable in our communities will see their services cut first. As the public sector begins to struggle financially decisions will be taken that affect peoples” lives; the lives of the ordinary citizen as well as those of the public sector employee. There is huge potential for job losses unless the public sector starts to develop its services in a way that delivers more for less, and on a much wider scale.
All public sector organisations have large workforces with massive salary bills, and this is likely to be an area where cuts will have to be made. Of course there are many ways to do that; cutting jobs, and stopping annual salary reviews will no doubt be at the top of the list here! It should be noted however, that the smarter public sector bodies are part of the growing trend for sharing services with other like-minded organisations. Some are thinking creatively, looking right across their services for cost reductions and efficiencies, not just at the back office. If a local authority has an excellent facilities management capability at low cost, why not share that with the local health service? Why not join all the public sector organisations together in terms of purchasing so that they can negotiate larger contracts and achieve economies of scale with reduced unit costs. In terms of human resources, the more enlightened will share transactional services such as payroll and look to be creative with other services that they all deliver.
Obviously the better use of technology can aid all of the above. This is a time to invest in technology where a business case can be made to show real cashable savings from the investment. Using technology to drive down costs is nothing new, but many organisations get stuck in the “day job” rather than looking at the business from outside the box.
The next year or two will throw up some interesting thinking; will the public sector grip these issues and deal with them? Or will we simply see services being cut and lost to the local communities?
- Steve Wragg, Senior Consultant and Chairman of an NHS Foundation Trust Hospital