Jane Ludlow – Public Sector, Operational Efficiency Lead

Last Monday’s announcements create a conundrum. On the one hand, there is unanimous agreement on the need to fundamentally change the way the public sector operates to deliver improved services at reduced cost – putting more services on-line and increased use of outsourcing, to name just two. On the other hand, a £1.7bn cut in contract and project spending, a civil service recruitment freeze and a £1.15bn reduction in discretionary spend, including consulting.

As pressure on public sector staff inevitably turns to simply meeting workloads, where then are the skills and resources to come from to deliver the changes required? How do Departments fund future investment to open up new areas of savings in the 90% of business operations beyond the back office that have scarcely been addressed to date? 

At the heart of the issue is the search for value. Suppliers to Government need to be clear on the value they deliver, and increasingly be willing to be measured on outcome, i.e. sharing both the pain and the gain in rising to the challenge. Critically, this type of approach also depends on a different, more collaborative and less risk-averse mindset from all involved – and it works. For example, we have seen a 50:1 return of savings to cost recently achieved in our work with the NHS. 

There is undoubtedly a continued and urgent need for the right skills to drive operational efficiency savings over both the short and longer term. This is less about controlling costs, and much more about fundamentally changing the nature of supply services to Government. It needs buyers and suppliers to work out a new model of contracting. 

Read about: Reducing cost whilst maintaining or improving Government services