The following 5 sections discuss lessons from the private sector, common mistakes made in public sector cost reduction, the importance of getting workforce reform right and the three key facets of cost reduction.
As public bodies embark on major cost improvement programmes over 2011-12, managers need to be mindful of some common weakness that history has shown to exist in public sector approaches to efficiency.
Policymakers estimate that the 2010 Spending Review will lead to the loss of around 330,000 public sector jobs. As the process of making these cuts accelerates, it will offer public bodies an opportunity to recast the size, shape and capability of their organisations through their management of people.
Today, the corporate status and capability of the finance function in government is fundamentally different to its private sector equivalent. This matters for cost improvement - FDs in large corporates are often highly influential operators who lead on business transformation and strategic direction.