What does the future hold for the public sector?


Continued budget deficits, funding cuts, reduced resources…we are all aware that the public sector is going through a radical period of change. So what does the future hold for the new public sector?

There is a key issue about innovation and doing things differently. And that ‘different’ comes at a much lower cost. So this is not JUST about bin collections changing from weekly to fortnightly (although there are obvious cost savings there).

This is about real transformation, efficiencies and innovation – essentially ways to plug the financial black hole.

In the past, there would have been major pressures on the delivery side of things (like making workers work harder and driving down their pay), today, we tend to look at things like influencing demand much better, ‘nudging’ behaviours in certain directions, incentivising certain behaviours whilst penalising others. Oh, and making workers work harder and limiting the extent of pay (minimum/living wages and all that).

So despite the pledges and promises political parties are making ahead of the election, we still appear to have a deficit that needs to be addressed – and with apparent flexibility over the book balancing it seems.

The Nuffield Trust recently warned that none of the major political parties have pledged enough money for the NHS to plug the funding gap – all failing to reach even the lowest projection of possible future NHS spending patterns. But let’s be honest, if they had I’d be questioning it. Remember that bloke called Nigel with a pint in his hand in front of a bus promising £350m a week for the NHS?

The head of CIPFA has also hit out (as much as accountants actually hit out anyway) stating that a Conservative government may have to legislate to allow councils to borrow money for fund social services. Goodness, what a pickle that was – and did we actually get clarity on that? I’m not sure but seemed like a novel idea.

As you know there are many other areas of public services faced with the challenge of balancing the books and looking at ways to deliver more for less. Maybe some other opportunities for some innovations and some different thinking. And hopefully, please, all of you political types, do try to have at least the semblance of a discussion even if you don’t agree on all things.

What does the future hold?

Last year I coined the term ‘new public sector‘. By new public sector I’m referring to the system and services that will remain post-austerity. It sought to capture the nature and scale of the step changes that are occurring in the sector and describes the way things will be in the future. I said at the time, the new public sector would be leaner, it would need to be more efficient and would certainly involve delivering more for less. Oh, and I may have also mentioned the words demanding and challenging. And what a different a year makes. I need to add to my description and model a bit I think.

How is the new public sector different?

I said back then, there is unlikely to be a rapid (if ever) return to ‘business as usual’ when the wider economy bounces back. Services that do remain will need to demonstrate a much greater connection with the public to survive. Service managers will need to develop better and more rapid ways of directly connecting with service users from within their organisational communications frameworks, so there will be a need for much better thinking and execution at both the strategic level and at the operational/service level.

The drive to reduce costs also means service managers 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. What this entails is empowering managers appropriately, so that they can make purchasing decisions that will see their desired outcomes being delivered.

What this all means in reality is six key things:

  1. Less public sector for the public
  2. Citizen-led judgement on value
  3. Increasing demand for service
  4. Care mandated in service delivery
  5. Lean delivery using less funding
  6. Citizen engagement and participation

Over the next few weeks I’ll go into more detail on each of these areas. 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.


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