25 September 2015

  |  CBI Updates Team


The future of Public Services

Speaking at the CBI Public Services Network 2015 event, John Cridland talks about the point they have reached, where they can go next and the role business can play.

The future of Public Services

It’s great to be here in this amazing venue to discuss the future of public services.

Today, some still see the services debate as an “unstoppable force” – balancing public finances - meeting an “immovable object” – satisfying public expectations. 

But the truth is that – for people and business alike – both are crucial. 

On public finances - business knows that balancing the budget is the only path to sustainable services. This will let us invest in the drivers of productivity like housing supply, infrastructure investment and export support. 

Yet – on public expectations - we should remember that people and firms across the UK rely on public services day in, day out. 

So what’s the answer? 

How can the Government reconcile its fiscal and civic responsibilities?  

Well – for me - “transforming” public services is the only way forward. 

So today, I’d like to talk about transformation - and what the Government can do in the Comprehensive Spending Review to make this a reality.

•    I’ll look at how far we’ve come in five years.

•    What still needs to be done – in Whitehall, local government and the NHS.

•    And what role business can play.  

Transforming public services

So let’s start by looking at how far we’ve come. 

In July 2011 – six months after I became CBI director-general – I launched the Open Public Services White Paper with Prime Minister David Cameron at Canary Wharf. 

Within its pages, this document held something important. A commitment from Government to develop more innovative, efficient public services. 

And working with their partners – including the charitable sector, social enterprise and business – the Government has made real progress, making 14 billion pounds of efficiency savings in the last five years. This success deserves recognition. 

But while efficiency is necessary, it’s not sufficient. 

Shrinking the state without making it smarter isn’t sustainable. 

And “efficiency” is just the first word in the bigger conversation about public services.  

That’s why I’m calling on the Government today to move onto the next step of their plan – transformation.  

Gradual evolution – a few tweaks here, a few efficiency savings there – won’t be enough. Real transformation isn’t about evolution – it’s about revolution.

This means making public services fit for the 21st century. It means acting early - focusing on prevention rather than cure – and looking at savings in the long-term. And it means putting people above processes, working across departmental fault-lines to create joined-up services which deliver for citizens. 

In the future – demographic pressures will make this need for change even more important. 

In 2012, there were about 14 million people in the UK aged 60 and over.  Yet by 2030, this number is expected to rise to more than 20 million.

Of course – this is a good thing! But longer lives will mean more long-term conditions. And we’ll need public services which can cope with this. 

So – what do we want to see happen? 

Well – looking forward - the Government’s decisions on the upcoming Comprehensive Spending Review will be crucial. In particular, the individual actions of Whitehall, local councils and the NHS will ‘make or break’ public service transformation. For each, the final solutions will be different. But the approach taken will often be same – combining cutting-edge technology, joined-up services and a long-term perspective.  

The road ahead – transforming public services

Let’s start with Whitehall.

Whitehall can be proud of its progress on efficiency over the last five years. But we need to see more departments working together on solutions. We estimate that if all departments signed up to the Government’s shared service centres to pool ‘back-office’ functions, they’d make 640 million pounds of savings every year. 

And better services aren’t just saving money, they’re saving lives.

Two weeks ago – the Prime Minister called the Troubled Families programme “inspiring” – and we’re delighted to have the Director-General of Troubled Families – Louise Casey – here with us today.   

The programme is a great example of what happens when different bodies start with the outcome they want and build everything around that outcome. 

Through tackling multiple problems such as addiction, truancy, anti-social behaviour and long-term unemployment, the programme has already saved an estimated 1.2 billion pounds . 

The programme shows the importance of acting early to prevent problems and that a ‘payment-by-results’ model can work. There are real lessons which other programmes can learn from this in the future. 

Next – let’s take local services. 

According to the LGA, core government grant funding to local government will have fallen 40% in real terms by April 2016. With the ring-fencing of other budgets, local services have been under real pressure. 

Yet whilst some local authorities have dealt well with these pressures, many still aren’t making the most of market solutions. For me what matters isn’t whether services are “private sector” or “public sector” but whether they’re “good” or “bad”. If some councils continue to put ‘who’ provides a service above ‘what’ service is delivered, it will ultimately mean less choice and less value for money. 

On local services, we believe that if local authority leaders minimise bureaucracy and support growth, they should be able to make their case for greater powers. 

For example, in 2008 Salford and Manchester ranked first and third respectively for incidences of malignant cancer. With a proven track-record of local leadership and having made a strong case for a specific, local response - leaders in Greater Manchester have now been given control of a 6 billion pound health and social care budget. 

And digital could be a ‘win-win’ for local people, local businesses and local councils. Hammersmith and Fulham Council has developed a single online customer service portal for services including benefits, council tax and business permits. 

It’s been a real success – with 70% of households registered and savings of well over a million pounds every year. 

Yet other councils still have a long way to go. At Cornwall Council – for example – only 2% of transactional services are fully available online. 

But it’s not just about local authorities, it’s also about our National Health Service. And we’re delighted to have Simon Stevens here with us today.  

In the next five years, we’ll need to see a radical programme which modernises and improves NHS efficiency. Today’s announcement by Simon Stevens on developing new hospital partnerships to extend best practice across the country is exactly the type of measure we need to drive innovation.

And the interim report released by Lord Carter of Coles in June shows the extent of the opportunity. Implementing the report’s recommendations would save an estimated 5 billion pounds. 

One crucial change would be for the Department of Health to make productivity targets a senior leadership objective. Using the Adjusted Treatment Index - developed by the Carter Review – to standardise how efficiency is measured in all NHS hospitals would help bring the NHS in line with other healthcare services in the advanced world. 

And with more people suffering from long-term conditions, more ‘self-care’ would mean fewer hospital stays, whilst giving patients the comfort of staying in their own homes. This could mean sufferers of diabetes – for example – taking their blood pressure at home and logging the results on an online portal. 

What role for business? – transforming public services

So I’ve spent a while now talking about what we want to see from the public sector – central government, local government and the NHS. 

But where does business come into all this?

Well - transformation doesn’t come for free. 

Business can provide the large-scale investment in the new technologies and systems which will drive transformation. 

But business has a lot more to bring to the table than just cold-hard cash. 

Private sector firms have the know-how, innovation and entrepreneurial spirit to help produce the future-proof public services we’re all looking for.

Yet transforming public services also means transforming how the Government – as a customer – interacts with business. 

The relationship between Government and business shouldn’t be just two signatures on a contract. Partnership will be crucial for providing services which combine both efficiency and quality.    

Businesses’ message to Government on this is “help us help you”.  

Firms want to see “dialogue by default”. 

But to do that – Government will have to do its bit. Engaging with firms before procurement and keeping the conversation going after contracts have been awarded. 

I’m going to ask Rupert give the ‘business view’ from the coal-face in just a moment. But I think it’s fair to say that – whilst there’s lots more to do - we are seeing some encouraging signs. 

Last year, when the Home Office was looking for new ways to manage its estate, they engaged directly with suppliers in defining the problem and scoping out potential solutions. This engagement – going beyond the standard ‘commercial discussions’ – saved money and improved performance in the long-term. 

In conclusion

We’ve come a long way since 2010. 
But – on its own - efficiency isn’t enough.

Only a truly transformational approach will do.  

And the challenge of balancing the books is an also a chance for the Government to step up and provide people with the best possible services. 

It’s a chance to get the treatment you need, in the way you want – at home. 
It’s a chance to renew your parking permit or pay your council tax with a few clicks from your sofa and get on with something you’d much rather be doing.   

Radical reform won’t be easy – and won’t happen overnight. But we need to start today to have any chance of getting it done. 

I believe it can be done. 

I believe that – with the private and public sectors firing on all cylinders – we can deliver smart, sustainable services for all. 

Thank you.