Transforming public services 'only way' to deliver savings

Published on Wednesday, 12 February 2014 10:45
Written by Govtoday staff

A business as usual spending review after the next election will not deliver reforms or sufficient cost savings, according to a new report from the think tank IPPR to be published today.

The report argues that whoever wins the next election will have to find significant savings in departmental budgets and that the only way to do this is to transform the way services are delivered.

The report argues that although public services have improved substantially in the last two decades, the use of either centralised targets or market mechanisms is unlikely to deliver the kinds of reforms needed to secure further real efficiencies in the future or tackle the more complex problems public services now have to deal with, from chronic diseases to long-term worklessness.

The report argues for a new public service reform agenda that is both more effective and is more in tune with public preferences. This new 'relational state' agenda would mean:

  • Providing people with a continuous relationship with a trusted professional in areas like home care, maternity care, welfare to work and offender management, meaning that strong relationships between users and professionals can develop over time and a highly personalised approach can be taken to both designing services and tackling problems.
  • Allocating frontline workers to neighbourhoods for which they should take responsibility.
  • Promoting a greater role for community and voluntary groups in providing public services, so that community networks are strengthened and that citizens take more responsibility for solving problems themselves.

The report says that four big reforms are needed to achieve this:

  • A decentralisation of budgets to local authorities and city regions to unlock innovation, improve responsiveness and break down silos.
  • Greater pooling of funding so services can take a 'whole person' or 'whole area' view and more effectively tackle complex problems.
  • Greater integration of professionals from across different sectors in multi-disciplinary teams.
  • The expansion of new collaborative arrangements, such as school chains so that providers can share knowledge and learn from innovation.

The report argues that the savings that will be required in the next parliament are so great that what will be required is service transformation, not further small scale efficiency savings. IPPR analysis following the latest Treasury documents published in the autumn statement show that £18.5bn will need to be cut from department budgets between 2015/16 and 2017/18. This could mean local government and defence facing cuts of almost £5bn, the Home Office facing a cut of around £2bn and the Ministry for Justice cutting over £1bn.

Nick Pearce, IPPR director, said: "Public services are struggling to cope with an increasingly complex world and will have less funding to do so in the future. The two predominant methods by which government has sought to run public services - bureaucracy and markets – assume a relatively simple world in which most problems have a small number of causes, and where standardized approaches will work in every case. New thinking across the human and natural sciences suggests that society's outcomes are much less predictable than has been typically thought.

"To tackle problems such as how to collect the bins or reduce hospital waits, top down plans and simple market incentives can be very effective. But anti-social behaviour, chronic ill health and large numbers of young people not in education employment or training have multipleand interconnected causes that feed off one another in unpredictable ways.

"Simply contracting out a silo of provision to a private provider on a 'payment by results' basis will not deal effectively with these kind of problems, as we have seen with the dire record of the Work Programme at getting the sick and disabled into work."

The relational state in action

In Finland, a relational approach to tackling special educational needs has reduced educational inequality and driven Finish 15 year olds to the top of the international league table. Finland's relational approach to mental health services have the highest recovery rates in the developed world.

In Milwaukee, children with emotional disturbances are helped by lead professionals with whom they can develop a relationship over time.

In Western Australia, social care is orgnanised around a neighbourhood care coordinator who acts as a single point of contact for all those with care needs.

Neighbourhood Justice Panels in Swindon, bring together offenders and victims of low level offences to tackle the causes of the offending behaviour and prevent minor cases escalating into the costly criminal justice system.

Casserole Club in Barnet, Tower Hamlets and Reigate replaces traditional 'meals on wheels' with a Facebook-style website where residents sign up to cook an extra portion of food and deliver it to an elderly person locally who needs it.

Source: IPPR

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