Public service reform: CSR 2010
What we know
Total government expenditure and receipts in 2010-11
Source: Spending Review 2010, HM Treasury
In addition to the Spending Review, ministers have devised a busy programme of activity that includes:
- Public sector pensions reform.
- Public sector compensation and pay review.
- Localism and the ‘big society’ agenda.
- A Strategic Defence Review.
- Improved transparency.
- Fundamental reforms to the UK’s health, education and welfare systems.
Drawing on the methodology of the Canadian experience of the 1990s, the recent Spending Review Framework document (PDF, page 12) published by HM Treasury defined 9 high-level criterion to aid programme prioritisation – including first-principles tests such as whether government is the best entity to fund an activity, or if an activity could be provided at lower cost.
In the near term, fresh approaches to public management will be essential to drive up productivity and execute tough spending and reform choices. But more widely, the Spending Review means public bodies will have to transform their capabilities to suit their shifting roles within the supply chain.
Many public bodies still lack a quantum of commercial skills and experience. In central government, around 44 per cent of Senior Responsible Owners of major government projects do not have any substantial commercial experience. Around 35 per cent of average commercial directorate staff spend is on interims - normally to buy in skills. Burgeoning demand for outsourcing and shared services programme skills will follow the Cabinet Office’s savings estimate of £1.4 billion a year on finance and human resource functions. Public bodies should now focus on scaling up these skills in response.
Overall size may be imposed on public bodies by top line spending cuts. But what shape they should take in response to new roles in supply chains is within their gift to decide. This work should address best fit questions on governance, performance management, corporate culture, operating and delivery models, and business processes and systems. The outcome should be fit for purpose capability.