NEWS


businesses were able to find short-term savings, helping them to reduce costs and survive the recession.


First, sharing back office functions such as HR and facilities management, to achieve economies of scale, is a well- established way of improving efficiency in the private sector.


The government currently spends about £18bn a year on HR and finance functions - the treasury and cabinet office estimate there is scope to save 20% a year on these functions alone, delivering savings of £3.6bn a year.


Similarly, if all 416 NHS trusts were to use the NHS Shared Business Services, they could save up to £0.5bn collectively.


Second, the CBI is calling for public sector managers to outsource to specialists if they are able to provide better value for money. The custody service developed for some police services by G4S has seen their detention supervisors take on many of the basic activities previously performed by warranted police officers. Freeing up those officers to return to the front-line allows them to use their fuller skill set and provides better value for money for the police service.


Third, CBI data shows that public sector employees typically take around eight days of sickness absence a year, compared with an average of just under six in the private sector. Even if the public sector reduced average annual sickness absence by just one day, this would save £493m a year. If the public sector could reduce its average absence to the same level as the private sector, £5.5 would be saved by 2015-16.


Fourth, the CBI is calling for Jul/Aug 10 Tell us what you think at opinion@publicsectorexecutive.com pse 17


more intelligent procurement. The annual public sector spend on the procurement of goods and services is £230bn. Reducing delays, bureaucracy and duplication will help ensure value for money is achieved and we estimate savings of £13.5bn could be achieved by 2015-16.


Procuring items such as vehicles and uniforms for the police on a national level rather than on a force by force basis would help the Home Office achieve its target of £400m of savings a year in police procurement.


Finally, we are calling on the government to tackle benefit and personal taxation fraud. Recovering debt, tackling errors and dealing with cheats could save £20bn by 2015-16. With tax and benefit fraud and error costing around £4.7bn a year, there is a clear need for a more sophisticated approach to tackling these issues.


Re-engineering public services


While all these actions are necessary to provide immediate savings, we need to look at fundamentally re-engineering our public services if we are to achieve long-term savings. There needs to be a focus on more innovative ways or working, with staff focused on achieving outcomes rather than outputs. This is where the real wins are.


It will require bold leadership from the government, from managers and from private and third sector leaders. Achieving the level of change necessary will require the government to open up public services to competition, ensure a level playing field for all providers and support innovative ways of providing services.


Joining up services such as healthcare and social services,


developing the ‘total place’ initiative and providing a single gateway to welfare-to-work provision are all examples of how services can be provided in the future in a more efficient and intelligent way.


The private and third sectors have already developed many ideas and solutions about how this might work and the government needs to allow them the freedom to innovate and explore these new ways of working.


The lessons learnt by the private sector through the downturn show that there is no reason why we cannot maintain and improve our front-line services while achieving the savings required to deal with the deficit.


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