Most people would agree that all parts of the public sector have significant financial challenges ahead, and the focus must be on how services are delivered. Worryingly, the report sets out that a further £77 billion in savings will need to be identified to get the UK's public finances in order, which is equivalent to over £1,200 per person in the UK, and it is clearly going to be challenging to make those levels of savings without wholesale reform.
The report identifies the three major challenges facing the UK's public services as (i) reshaping services to meet the needs of an aging population (one in three children born in 2013 in the UK are expected to live to 100 years old), (ii) a change of approach to fit services around people by using technology (in the past 12 months 77% of people bought or ordered goods or services online, whereas only 41% interacted online with public authorities) and (iii) to build public confidence that ongoing change and reform of public services is the right thing to do and win support for it (cross party political support and public support will both be required for the scale of reform needed).
Some interesting themes come out of the report centring around moving away from simple cost cutting (spend less, get less), to emphasis on transformational change across all public sector agencies to achieve more effective and efficient outcomes. The CBI also put forward that a new fiscal rule should be introduced once the deficit has been eliminated to ensure that public spending does not outstrip revenue receipts, and also that innovative approaches to public services should be promoted so long as they are carried out within agreed safety parameters.
The report offers the following solutions to the three major challenges facing the UK's public services noted above:
- The next government should integrate health and social care through unified budgets and commissioning structures to forge seamless links between GPs, hospitals, and care either at home or in a residential setting (it should be noted that the Scottish Government is pressing forward with health and social care integration already. Integration arrangements must be in place by 1 April 2016).
- A joined-up approach focused on real-world problems needs to be replicated right across government, with an emphasis on transformation rather than simple cost cutting.
- The UK needs a new fiscal discipline to ensure we live within our means. This could be achieved by a 'sustainable fiscal rule' to be implemented once fiscal consolidation is complete in 2018/19, ensuring the government spends no more than the revenues it raises and holding public spending at 38% of GDP over the course of the economic cycle.
- A central feature of the new discipline should be a gradual switch away from high levels of welfare spending to policies that make a difference by tackling underlying problems.
- A scaled up Government Digital Service should be given the lead role to drive development of digital routes as the primary way citizens interact with all public services by 2020.
- The next government should oversee development of joined-up services through physical co-location to ensure people get support efficiently and conveniently, guided by a review to prioritise areas for action.
- An independent, cross-party commission on public services with citizen participation should be set up to share a cross-party mandate to unlock long-term reform.
- The next government should aim to ensure all providers of public services are equally transparent about costs and performance. To aid the process, early in the next Parliament the government should publish baseline performance metrics for all public services.
- The next government should make the case for innovation and experimentation within acceptable limits in public services, and encourage public service professionals to test new approaches.
If you have any questions or comments, please don't hesitate to get in touch.