Thursday, 3 September 2009

'More for Less' - even in the public sector?

(By Richard Holway 8.00am Thursday 4th Sept 09) We’ve been running articles and research reports under the ‘More for Less’ banner for nearly a decade now. In the private sector, ‘More for Less’ is firmly embedded as the modus operandi in most companies. When wholesale redundancies/job cuts are made you never hear ‘we will be cutting service levels to our customers’. Far more likely it will be ‘we have laid off contractors’, ‘we have screwed our suppliers for a better deal” coupled with “we are offering new, enhanced services and products to our customers”etc.

But in the Public Sector, the political debate always seems to infer that cuts in expenditure = cuts in staff = cuts in service levels. I have to admit, it is one of the few things that gets me shouting at my radio! Why can’t we have departmental heads who have the same experience and ability of seasoned private sector CEOs, well used to getting ‘more for less’ year after year after year? We need public sector managers with the ability to screw the kind of deal that BP achieved last week.(See our 27th Aug 09 post - IBM, Accenture, TCS, Infosys, Wipro in BP megadeal.)

Everyone knows that there are huge inefficiencies throughout the public sector. Simple things like ‘joined up’ procurement so that local and central government alike openly shares pricing info and can buy at the lowest rate, could save billions. Or greater use of Shared Services - see our post earlier today on savings which could be made from the increased use of Shared Business Services (SBS) run by Steria for the NHS.

So, today, I was startled to read a headline in the FT – Big idea touted as way to squeeze more for less. A 1% improvement in public sector efficiency = £7b saved. Since 1997, the private sector has improved efficiency by 22% compared to a decline in public sector efficiency of 3%. The opportunities are huge!

Better public sector services for all at much, much lower cost. That should be the slogan at the next election.

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