The campaign is officially underway, the results of the May 6th UK general election will dictate what kind of Britain will emerge from the recession.
If predictions are to be believed, public spending will be drastically decreased, leaving public services seeking solutions on how to continue offering these services. Will this mean more involvement from the private sector? Or will service providers be able to make genuine improvements in services and provide cost-efficiencies?
Deborah Loudon, Head of Government Practice Group, Saxton Bampfylde, believes it is important to make the distinction between services being commissioned by government from the private sector and a scenario in which government retreats from some areas leaving the slack to be picked up by private enterprise: “The private sector is always willing to help where it spots the possibility of a new market. One of the interesting questions is whether out-sourcing will move on from the transactional to, for instance, performance management. Given the problems the public sector traditionally has with tough performance management, it might consider the possibility of increasing efficiency by outsourcing that element.”
No matter what party comes into power in May, bold and decisive action is going to be needed. In order to cut the deficit without making damaging salami-slice cuts to public services, a transformation of how public services are delivered will be required.
Stephen Bubb, CEO, AVECO says, “The third sector can deliver services which not only better serve the needs of citizens and communities, but also bring savings to the public purse. It’s an offer that unsurprisingly all three parties have gladly accepted. But, for this to be possible the public sector will need to be brave enough to try new methods of delivery and government will need to engage with us in the reform of existing commissioning and procurement processes that currently act as barriers to third sector organisations delivering services.”
Plans for what services should be cut are certain to have been started within each party’s camp. It is likely that the private sector may find opportunity in these service cuts. Neil Wilson, Managing Director, Bandenoch & Clark says, “There may well be a case for increased private sector involvement though it is doubtful that this will be universally welcomed by the public sector. The threat of public sector job losses is likely to lead to resistance on all fronts. Perhaps the biggest opportunities will lie in areas where there is already a private-public partnership in place. The task there will be for both parties to focus on delivering the service more efficiently than now. That will require both the private and public sectors to approach things differently and to make the necessary changes for the greater good. Am I confident about the prospects of that happening? Unfortunately not.”
Martin Pilgrim, former Chief Executive, London Councils and Associate, Criticaleye describes how a different approach to public services is needed: "There will be increased involvement of the private sector and the third sector in the delivery of public services. But the reductions will need to go beyond this. What is in prospect is a model of public spending nearer to the American model. There will be a shift between public and private responsibility with means-tested safety nets for the very poorest."
If you are interested in the topic of this week’s newsletter please see the Insights pages for more articles and Write-ups. In Lessons in Leadership: Learning from 10 years at the top of the civil service, Sir Brian Bender, former Permanent Secretary, shares his key lessons learned from 35 years working in government. The Write-up from the Discussion Group What public sector and private sector leaders can learn from each other looks at how the private and public sectors can work together.
Please get in touch if you have any comments about the issues in today's update.
I hope to see you soon,
Matthew
