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State of the State 2020: Takeaways for services companies

The scale of the impact from the pandemic has taken us all by surprise. The services sector like all others were focused on managing disruption and enabling clients to adapt and survive. As vaccination developments are starting to look increasingly promising, both private and public sector leaders grow more optimistic about the future and are refocusing on what this new normal might look like.

Our State of the State report 2020, now in its ninth edition, reports on the numerous interviews carried out with public sector leaders between August and September and outlines the challenges they foresee in balancing the finances and demands for services in the coming years. It also gives a voice to the public, through a citizen survey, highlighting the services they value and how they should be delivered. While the full report provides rich insight into myriad topics relevant to those working in or with the public sector, here are the main takeaways for the services sector:

Services providers will need to partner more closely with public sector leaders to help retain the agility the government achieved during the pandemic.

Some of the interviews carried out as part of our report suggest that public sector leaders want to retain the agility they achieved in the pandemic, but sense a drift back to normality unless its leaders intervene. Research suggests that senior civil servants recognise that departmental interoperability and collaboration needs to be worked on and that a cultural change will be needed to bring about meaningful change.While acknowledging the challenges relating to such processes, public sector leaders are reviewing lessons learned during the pandemic to finalise new ways of working but also in their policy making.

The services sector has valuable insight into the challenges of current models and best practises, therefore what improvements could be made to help achieve agility and cultural change. Services providers can work together with public leaders to work towards these goals and build back better, with agility and efficiency at its core.

 

The services sector can support public bodies to plan for and manage the transition to remote working

Public officials are exploring what form of remote working could remain beyond the pandemic and the long-term implications for their office needs and ways of working. Officials are also considering the balance between the cost saving of reduced office space and the access to wider talent pools to the inevitable impact on city centres and the retail sector. The research found that most leaders are focusing on how best to build a blended model.

Decisions on remote working cannot be done hastily and should be led by evidence and insight pertaining to its impact on productivity and well-being amongst other factors, for both the government and the public. By actively sharing their expertise and data with government clients at local, regional and national level, services companies can help them plan and prepare for a smooth transition to a blended model for themselves and for businesses.

The government recognises that the future is data-driven and the services sector is best placed to assist with the accelerated digital transformation of the public sector.

Government bodies understand the need to improve data literacy and skills and data sharing capabilities while building consent between agencies and the public. The public has mixed feelings about the concept of government sharing its data, but is generally comfortable when being used to drive decision making. Thirty six per cent of citizens surveyed said that it should be freely shared and thirty seven per cent argued it should not. Data literacy among officials has also been mentioned as an area for development. Therefore, it is critical that technology selection criteria incorporates both the requirements of the organisations providing the services but also to the public’s concerns.

Services businesses have an opportunity to help government build on the momentum for change and continue to support public sector's digital transformation, whether this is helping to provide a strategic vision, build new operating models and processes, or provide new technologies and new ways to interact with citizens. Services companies will be able to present how their technology-led approach to operations and delivering services can help their clients to be more effective and encourage their public sector clients on their digital transformation journey. 

Opportunities in the government’s levelling up agenda that is focused on regional growth, to improve transport connectivity, level up infrastructure and regenerate local economies. 

The government has committed to decentralise funding and invest in the growth of local economies. Proposals are being drawn to drive long term economic and productivity growth through investment in connectivity, land use, economic assets including cultural assets, skills and enterprise infrastructure. Leaders agree that levelling up requires clear definition and devolution to drive delivery. Critical decisions on the national health services, diversity and green recovery are also on the agenda.

The scale of the challenges the government is facing is tremendous. The service sector will be able to support the government with solutions to infrastructure spending, skills and decentralization. Services providers should focus investment on both green economy and diversity strategies to ensure they are able to work with their public sector clients.

With demand for public services increasing and resources squeezed, the services sector have clear opportunities to offer assistance in improving cost and operational efficiency.

Public sector executives across the nation have seen a surge in demand for services and that demand is expected to increase. At the same time, budgets have been stretched and commercial income, especially for local government has been hit by the pandemic. Further down the line, the government also faces big decisions on post-Brexit relationships and sustainability goals of a net zero economy. Our citizen survey revealed that 46% believe that pursuing a green economic recovery, for example by investing in renewable energy, would create jobs and boost the economy.

There are clear opportunities for services businesses to win new work and become involved with new projects as this emphasis on cost and operational efficiency grows. Both services companies and their clients will need to look at reducing organisational complexity and create more flexible operating models that are capable of responding quickly to new prospects and operate at lower cost. Companies will also need to find new and innovative ways to deliver services if they are to meet the changing demands of clients.

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