In a speech to industry leaders, Sir Digby said the government needs to take a 'profoundly different approach to value for money.' He said that in the run-up to the 2006 spending review, the government must develop a better strategy for achieving value for money in public services or risk financial repercussions such as breaking its 'Golden Rule'.
'Every pound spent unnecessarily in the delivery of inefficient public services is a pound that could have been better invested by private businesses in research and development or in creating new jobs. In the context of today's increasingly global and competitive economy, this threatens our prosperity.'
Sir Digby drew attention to the limitations of the existing systems for promoting value for money, particularly periodic interventions such as the Gershon review. 'The public sector has to find a more sustainable approach than one which relies on administering a 50,000-volt shock every decade or so to inject life into the value for money agenda.'
Sir Digby outlined a number of proposals which will help achieve better value for money, including:
the creation of a permanent public body to challenge the government to secure value for money on an ongoing basis. This would stand outside the government and make public recommendations, with the government either adopting its proposals or explaining why not. It would be staffed by specialists with a track record in delivering value for money across a range of sectors.
the introduction in central government of a mechanism similar to the comprehensive performance assessment regime in local government. This would deliver greater accountability for achieving continuous improvement in value for money within Whitehall. Departments and their agencies would be graded from 'excellent' to 'poor'.
more stringent requirements on senior civil servants to achieve continuous value for money improvements, with success in achieving this a condition of continued tenure.
the creation of commercial directorates in every government department, with skilled staff able to advise on market management and lead on commissioning and procurement.
full implementation of Sir Peter Gershon's recommendation that professional finance directors sit on departmental boards.
* Read Sir Digby's speech in full here.
Sir Digby Jones spoke to the CBI Public Services Industry Forum on 6th June 2005.
Matthew Maxwell Scott, CBI Press Office, 020 7395 8094 or out of
hours pager 076 2680 9070
Attachments: (See attached file: Sir Digby Jones Speech to