This is my first blog post since all of that ‘Brexit-shocker’ stuff and it would be fair to say its been quite an interesting few weeks. And frankly it doesn’t look like the excitement is slowing down. It’ll be interesting to see how it all shapes up (ask me in ten years time) but as one of my Libre partner’s, Rachel Edwards, put it so well in her latest blog, let’s not get too distracted – we still have immediate targets and outcomes that have to be delivered.
I captured the term ‘New Public Sector’ some time mid 2015 in an attempt to simply describe likely future direction of public services given all this fuss about austerity. What I had not quite anticipated was the impact of the referendum would have on the structure of politics and the way the nation has turned against established norms and institutions. That sea change could mean support for the key objective of ‘doing more for less’ will either become much stronger (and more angry) or it could form the equivalent of a rock in the middle of a raging river with people keen to cling to something they at least understand. Either way, public sector managers can use the ‘more for less’ maxim as a clear focus for immediate efforts and actions.
Last week, there were press reports of local authority spending at its lowest since William added ‘The Conqueror’ to his title and became famous. The figure of 1% lower was mentioned. Well frankly, my recent experience tells me that if you are being asked to deliver reductions of 1%, then grab that request with both hands. More likely, if there is a general trend in your part of the public sector for spending reductions of 20%, there seems little point drawing up plans to reduce your costs by 5%. We are all in this together.
Organisations must make sure they have cross-cutting programmes that identify innovative ways of doing more for less, not just this year but every year. The extent of austerity means you are unlikely to be able to offer incremental improvement in your service and cost reduction plans. In the emerging shape of the New Public Sector, your cost reduction options are more likely to look like this:
Different parts of the UK’s public sector are moving at a different pace on that savings journey, so if you have been preparing contingency cost reduction plans over the past few years, now is the time to start dusting them off. A great starting point is to make sure you understand your current costs and what you deliver for those costs. The cost framework you choose should provide you with a means of identifying your costs and supporting your understanding of the impact any reduction has on your bottom line. This will give you the clarity your project needs.
This may sound strange but ensure the data you use is accurate. Make sure it is up to date. And make sure it is appropriately linked to other review activity your organisation may be undertaking. You cannot undertake your exercise in a vacuum when other services may be reviewing what they are doing and how much they cost. And don’t be afraid to challenge if you don’t agree, don’t understand or think your costs accurately reflect what you are delivering.
As a minimum, your framework should enable YOU to understand your costs and allow you to drill down so you can properly understand where they come from. There is an example of a minimum data for service costing framework here.
Career limiting criticism aside, if your existing organisational cost framework falls short of having this level of data, you may need to ‘encourage’ your organisation to allow you to gather this. This is a time to be bold and to be challenging of what you do and what your organisation does. The level of information you need should be the same information the public will want. Keep in mind the test of the ‘reasonable man’ – in the same way you deserve accurate and meaningful information, so does the public.
Gaps or uncertainties will be seen as an attempt to be less than transparent, so this is something your organisation will need to consider sooner rather than later anyway. And with the recent sea change in the way governance, politics and public services are viewed, this is not the time to be found wanting.