Few frontline public service professionals will have noticed the announcement by the government of its Operational Efficiency Programme (OEP) in July 2008, intended to identify savings from back office functions in the public sector.
But more will have spotted that the 2009 budget made forecasts and assumptions about how funding for frontline services would be protected by £15bn of annual savings from the OEP.
PricewaterhouseCoopers' response to the OEP last December put the figure rather higher, estimating possible savings of £37bn (at today's prices) by 2015-16, subsequent to those announced in the pre-budget report last November.
In the intervening eight months the recession has deepened, the government has made major investments in several banks and Standard & Poor's has voiced concerns about the UK's rising budget deficit. Everyone now knows that the long boom in public spending is over and that the next decade will be one of austerity.
The simple, though painful, way of saving money is to cut frontline services and staff. NHS veterans, for instance, recall how in the 1980s health budgets were balanced by "giving up on eyes". But this pressure on frontline spending can be alleviated by making sure that savings are made first in the back office – finance, IT and procurement for example. That is the reason for the political impetus behind the OEP and why the back office has made it onto the front page.
These savings will not provide the whole answer. Any government over the next 10 years will face difficult decisions over what services to provide; and the way in which frontline services are delivered will also have to be transformed in order to save money. That is no reason, however, not to start with the less politically contentious targets in support services.
This task is not something that "management" can be left to get on with alone, without support from the rest of the organisation. Frontline professionals are the customers for back office services and they will have ideas on how support services could be made more efficient and easier to use. Simplification is the key. Radical cost savings will not be made by yet another round of tactical squeezing and slicing. Processes need to be simplified and standardised first.
Public sector organisations carry out everyday processes – from paying bills to entering into employment contracts – in a bewildering number of different ways. This is the unintended effect of devolving service delivery to the local level.
Without our noticing it, the 1,300 or so public sector delivery bodies in this country all invented different ways of running their internal processes. This makes life harder for professionals using these services as well as building in unnecessary costs.
The front line should support the drive for leaner, simpler back office functions, for two good reasons. First, and most obviously, they and the users of the public services they provide will be the beneficiaries if this absorbs the first wave of the spending pressure. Secondly, simplified and standardised processes, delivered at lower cost, should be easier to navigate and use.
Jon Sibson is government and public sector leader, PricewaterhouseCoopers
From Bubb's Blog
From Whitehall Watch
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