A New Public Sector Rises from the Ashes of Austerity

The pressure on public service finances is severe, some would say unprecedented. Clearly public services can’t continue as the are. And all because of this thing we call austerity. In my last blog post I talked about my new book How to Survive Austerity: A Manager’s Guide to Doing More With Less and Emerging as a Leader in the New Public Sector. However I didn’t go into detail about this New Public Sector.

So what is it, how is it different from previous challenges and what does it mean for those working in public services?

To put it simply, the term ‘New Public Sector’ is beginning to be used to describe the system and services that will remain post-austerity. It captures the nature and scale of the step changes that are occurring in the sector and describes the way things will be in the future. It’s leaner, it’s more efficient, it’s more for less – and it’s certainly going to be more demanding. And it’s becoming increasingly apparent that we have little choice in the matter.

In July 2015, following the Chancellor’s budget, the Office for Budget Responsibility report A Brief Guide to the UK Public Finances said it expected UK PLC to raise £673 billion of income and spend £742 billion in 2015–16. That is a whopping deficit of £70 billion – and that is just an annual amount!

That is the deficit the Chancellor keeps talking about and the one he is keen to tackle, and closing that gap will affect the funding of most public services. Even services that are currently ‘ring-fenced’ and therefore relatively insulated from the worst of the spending cuts, are not immune to efficiency plans.

And then we had the 2015 Spending Review where the Chancellor set out public sector budget cuts for some ‘non-ring-fenced’ departments of between 15% and 37%. Overall day-to-day depart- mental spending was cut by £20bn – equivalent to 0.8% of total expenditure each year by 2020. Those reductions were the culmination of many months of wrangling between the Treasury and spending departments. The ramifications for managers of services affected by those reductions will be severe and will be felt for years to come.

So, in short, the key differences will be:

  • There is unlikely to be a rapid (if ever) return to ‘business as usual’ when the wider economy bounces back. Current Government thinking appears to focus on ‘reduce and eliminate’ to a point that could permanently change the nature of public service.
  • Services that do remain will need to demonstrate a much greater connection with the public to survive.
  • The drive to reduce costs means each service manager will need to be able to acquire effective services to deliver their outcomes within the deadlines and to budget. Those services may no longer be provided from within the organisation but, as always, they will need to comply with strategic, corporate and governance requirements.

Austerity takes different forms in different parts of the public sector and in different parts of the country. Whatever form it takes in your part of the public service, the key challenges you face are a drive to ensure vastly improved services, reduced – or even no – services, and, inevitably, a lot less money.

I’ve not painted to most optimistic picture I admit – but if you’re prepared you can be ahead of the opportunity curve. The key is to present your service in the best way, ensure everyone understands what you do, how much it costs and why they should ‘CHERISH’ your service. There’ll be more on CHERISH in my next blog post.

Until then, I’d love to hear your thoughts on this so please feel free to comment below or contact me.

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