Dancing to that old tune called Austerity

the key to a successful engagement

So George delivered his first solo budget. Most was well trailed in the press so there really were no real surprises apart from the living wage. All seemed well on track with the economy as he predicted. But what lies behind the headlines and what does it mean for public services and those who work in them?

Like all great performers, George likes to produce rabbits from hats. A couple of headline grabbers like more tax on highly taxable things, (brings in more cash for George anyway) and changes to inheritance tax (saves HMRC resources and we’re all living longer so won’t be paying it anytime soon anyway).

But the real meat for those working in public services was not that kind of stuff. It’s the medium term projections of what public finances are doing that matters. That’s what we need to look at to see where things are heading.
And helpfully, the Office for Budget Responsibility (OBR) produced a neat summary of where things are heading in June 2015. Its Fiscal Sustainability Report (FSR) may sound classic geek fodder, it is a concise and understandable description of where UK PLC is heading in the short, medium and long term. No, really.
Along with the rest of us, George has to listen to what the OBR says. It’s independent of government and has a proper Charter and everything. The OBR takes each budget and each policy announcement and prepares a “school report” twice a year (June and December if you are very keen) to let us all know how George is getting on. The FSR is worth reading even if you may have to pretend to be lining up online four jelly beans if someone catches you reading it.

So what did the OBR say in June? First, it said demographic change is one of the key long-term pressures on public finances. Better life expectancy is a double edged sword. Second, its central projection assumes reductions in public spending of £22 billion. Third, another projection assumes flat education and health spending and projects a reduction in that case of £42 billion from all other services. The changes today cut the reductions to £18 billion.

All eye-watering numbers. Even the now lower number. And a real wake up call for all those working in public services. And a million miles away from the spectacle set piece of the budget. This stuff is real and is what you should be looking at and understanding.

So Autumn this year will be an interesting time. All managers of public services need be making preparations for surviving such austerity. If you haven’t started, today is the day to start. Think about what you need to do to best present your service. Think about how you can cut your costs. And think about comparing your service with the best there is. And making sure everyone knows about it.

My soon-to-be-published book, “Surviving Austerity” will help you with that thinking. It sets out a clear and simple way you can best position yourself to still be there next year and the year after. No guarantees of course. But there again, when the numbers are that big, there can’t really be any place to hide.

So my advice is to read the papers tomorrow and understand the micro-level stuff this budget will deliver. And then develop your understanding of the bigger picture. That’s the tune you will be dancing to for the next five years.

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