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Transforming public services

30 October 2015

​The results of the comprehensive spending review – set to be announced in November – will confirm that many public services are unsustainable without reform. A recent meeting of the CBI’s Public Services Network discussed potential approaches.

“What energises many markets are new insurgent companies, who break monopolies and bring in new ways of doing things. We should apply this thinking to government.”

This was David Cameron in September, setting out his vision for a smarter state based on reform, devolution and efficiency. And with the government looking to make an additional £20bn of cuts in its comprehensive spending review – in order to clear the deficit by 2019/20 – something transformational is needed to deliver the public services the UK needs.

“This time around savings from departments will be a lot harder to come by,” said CBI director-general John Cridland, in the organisation’s submission to the review. “The low-hanging fruit from the last Parliament has already been picked.”

He continued: “Commitments to keep within public spending limits will only be achieved through ambitious reforms. All departments, including those protected by ring-fences, need to be open to new ideas and ways of working.”

But it takes open and honest discussion to first encourage and then harness those new ideas – and members of the CBI’s Public Services Network met in London at the end of September to do just that.  

Rethinking delivery

Troubled Families – a government programme referenced in both Cameron’s speech and in the CBI’s submission to the spending review – has been largely successful because it fundamentally rethought how to deliver support to families with multiple problems. The new approach involved crossing department lines and attempting to deal with the root of the problem, rather than treating each instance of truancy or anti-social behaviour in isolation.

If you build resilient communities with all they entail, they won't need to rely on public service

“We’ve known for generations that we haven’t had the right approach for these families,” said Louise Casey, director-general of Troubled Families. She argued that transforming public services should mean “thinking about the behaviour and aspirations of people, not just changing structures”.

She said Troubled Families had helped “revolutionise the debate – from how to get the most from welfare, to how to get a job”.

She added that too much was spent on reactive services. “If you build resilient communities with all they entail, they won’t need to rely on public services,” she said.

The same kind of approach could be used to help people out of hospital earlier – and this was a point picked up on by audience member Cecilia Bufton, product marketing director for telehealth at Tunstall Healthcare Group.

“You stop people falling, you reduce social isolation, you manage the health of the individual at home and you stop them being in hospital – or help them transition out of hospital sooner,” she said. “It’s completely down to joined-up thinking.”

Neil Euesden, group director of operations at social housing group Pinnacle, added: “The important message is that if you concentrate on outcomes, ignore who delivers and put the community at the heart of that outcome, I don’t think we can go far wrong. Get the right service, to the right people, with the right expectations and the money will follow.”

Services to be proud of

But the NHS is one of the services that highlights the scale of the challenge, with many members of the public fearful of change. The CBI has identified a possible £5bn in productivity – and procurement – improvements by 2020, in line with the Carter Report published in June. And, although Simon Stevens, chief executive of NHS England, spoke of the savings made through its five-year efficiency drive, he added it now needed to look at new care models and new partnerships to deliver more.

Stevens highlighted that the NHS needed to raise its game on the digitisation of services and ensure the flow of new technology into healthcare. He also cited opportunities for working better with community groups, volunteers and in the workplace – and argued that local solutions could often work best.

But his big push was his insistence that “no hospital should be an island”, as he outlined plans for more integration and flexibility, especially around the provision of specialist services. He used the example of Moorfields Eye Hospital, which now offers its services through 21 satellite locations.

While he emphasised that there was an enormous amount to be proud of in the current NHS, he warned: “We have to reinvent what healthcare looks like.”

An enormous opportunity

“We all want the same thing: excellent public services at low cost for the taxpayer,” said Rupert Soames, chief executive of Serco, highlighting the expertise that businesses can bring to the table.

He argued that the government needed to be brave to achieve the necessary change, as its current risk-averse approach – increasingly pushing unlimited liability onto the supplier – was discouraging smaller, innovative businesses from getting involved. Chopping up services into too many contracts was also losing the government the benefits of scale and seamless provision, he said.

We are just scratching at the surface – and there is so much more to do at every level of service provision

Instead he insisted on the value of transparency as the safeguard, the stick and the incentive for private delivery of public services. “Transparency encourages suppliers to chase operational excellence,” he said.

His comments were echoed by Andrew Mathewson, government relations director at Kier: “There is an enormous opportunity to do public service better. It’s not about who does it, it is about what is done.”

But he also warned the debate needed to shift up a gear to convert words into much-needed action. “We are just scratching at the surface – and there is so much more to do at every level of service provision. I don’t think we can do it fast enough.”

Cridland shared this sense of urgency. Alongside potential savings it identified for the NHS, the CBI’s submission to the comprehensive spending review highlighted what could be achieved by extending digital and shared services and – reiterating the benefits of focusing on prevention rather than cure – it suggested better prisoner rehabilitation could save £2bn by 2020.

But, Cridland said: “Gradual evolution – a few tweaks here, a few efficiency savings there – won’t be enough. Radical reform won’t be easy – and won’t happen overnight.

“We need to start today to have any chance of getting it done.”