Public sector view: Stephen Weigel, Tandridge district council

Councils have a legal duty to provide their community with a full range of products or services

The similarities between public and private sector organisations may not be immediately apparent but they are certainly there. If anything, the downturn intensified the need for public and private collaborations, long before the coalition was established. The underlying aim remains the same: we need to understand how both sides can continue to learn from each other. I'm passionate about the private and public sectors working more closely together for mutual benefits and outcomes.

People are demanding greater choice in services. The processes underlying departmental items such as benefits administration are extensive and complicated. They cannot be delivered with the same flexibility as a private company. The public sector has a legal responsibility to deliver services to all citizens, while remaining fully accountable and ensuring its actions are transparent and an appropriate use of public money.

As a result, public sector organisations are being squeezed from both sides: they are deemed by government to have invested in new service delivery systems without delivering the required step change in service and cost of service. On the other hand, in age of instant access to commercial services online, and the continuing social consequences of recession, citizens are still demanding an increasing level of service from their local authority.

The key difference here is that the customers of any public sector body (ie residents and local businesses) often cannot select who supplies their services - just as local authorities cannot choose their customers or the services they provide. Councils have a legal duty to provide their community with a full range of products or services: this makes service delivery inherently more difficult. For a private organisation, while customers do have a choice of going elsewhere, if a product or service is no longer popular, it is possible to introduce a new one. This isn't as easy for a local authority, health trust or police force!

Where public bodies really do have different priorities is in achieving the fine balance between delivering services, taking responsibility for citizens, balancing budgets and achieving year-on-year efficiency savings. In common with the private sector, there is a real need for strong leadership and a commitment to see everything through allied to outstanding communication. There is scope to share services and co-delivery, much the same as UK mobile telephony operators are doing to cut costs and reduce overlap.

In the public sector, the impact of the recession has taken longer to crystallise but it's clear that the next few years will be even more focused on cost reduction. It's worth remembering that local government has the best track record of any public sector providers on efficiency savings over the past five or so years.

Private sector view: Simon Downing, chief executive, Civica Group

Transformation is less about foresight and more about the response

Public sector organisations are clearly under unprecedented pressure to reduce expenditure, possibly by as much as 25% or more, while meeting new service demands and higher overall expectations. Many private companies, with their customers facing pressures and uncertainty as the country has dealt with recession, have likewise had to take difficult decisions in order to manage their costs.

Public and private can learn from each other's strengths. A private organisation's biggest advantages are flexibility and responsiveness, whether through action, ability to invest or in driving internal efficiency. Driven by competition, successful companies respond swiftly to market change to protect the business or to capitalise on new opportunities. In addition, the private sector ultimately has the benefit of a very clear measure across the organisation and for stakeholders – profit.

This clear focus on top line growth and bottom line cost management represents a more programmatic approach to efficiency, whereas the public sector has traditionally taken a strategic longer term view, introducing transformation programmes that take effect over some years and often involving consultation. In the private sector, it could be said that transformation is less about foresight and more about the response.

Choice is also an interesting aspect. Companies choose which products and services they supply on an ongoing basis. People look to their local authority or public body to deliver a service out of necessity, not choice. Authorities have some freedoms over the way some services can be delivered and therefore create 'citizen choice', but face many constraints on the services provided and the community served.

Underlying this, reputation or 'brand' management, which for a long time been a clear priority in the private sector, matters equally to public and private bodies. For both a strong reputation, typically built on long-term customer satisfaction, is imperative and conversely a damaged or poorly perceived brand can become a barrier to future progress. The language may differ but just as a private sector company needs to build its brand, so a local authority is equally focused on reputation, credibility and local identity.

Reversing a poor reputation is a much more difficult challenge that involves rebuilding relationships. As a result, it's imperative for the authority to retain trust and respect with the public (including the assurance that private sector partners will protect and enhance its reputation for service delivery and value for money).

The key to delivering 'more with less', is the core asset (and major cost centre) for commercial and public bodies – their people. Best use of existing staff, including tools such as new technology, can instantly increase efficiency: Civica, for example, has been able to redeploy resources within the company in areas where increased efficiency is needed. This is not as easily done in the public sector, often due to the complexity of decision making, but it is at the core of organisational efficiency.

Local authorities may find themselves spread too thinly because of the breadth of services they provide. Public organisations, like their private counterparts, may need to consider their core competencies and enlist external providers to assist with other non-core requirements. By taking a programmatic approach to desired outcomes, through much the same approach as private sector organisations, and benchmarking the quality and value of those services delivered by external providers, it is possible to strike an effective balance of efficiency and service.

Such an approach has the lasting benefit of creating a blend of deep expertise between public and private sector partners. It also combines public service values with focus, flexibility and responsiveness. The dividends for citizens, public organisations and their partners are likely to be very significant.

Summary: better or just different?
The downturn has led local authorities and businesses to take a hard look at their organisations. It's likely that the advent of the first coalition government in 70 years will provide further evidence that successful partnerships depend on learning more about each other's ways of working and respective strengths, identifying mutual outcomes, and working realistically towards them.