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Call for ministers' commitment to savings

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Ministers will need to make a “sustained political commitment” if radical efficiency savings are to be wrung from the delivery of locally delivered public services.

Giving evidence to the Commons Treasury sub-committee, John Sibson, government and public sector leader at consultants PriceWaterhouse Coopers, said ministers would need to demonstrate willpower if they wanted to see standardisation and simplification between local organisations within an area.

Asked by MP Sally Keeble (Lab) about the inefficiencies of the two-tier system in local government, Mr Sibson said: “You will need to simplify and standardise processes, and certainly in locally delivered services you will need collaboration between different organisations within an area across organisational boundaries.

“That requires huge political will. And if I may say so, although big savings have been made as a result of previous efficiency processes, this has never been a matter of collective political will right at the top of the agenda.

The Operational Efficiency Programme, unveiled at the Budget, estimated £6.1bn could come from procurement savings.

But Mr Sibson claimed his organisation estimated the savings from procurement at being between £9bn and £23bn.

“The government looked at collaboration between public buyers to make the efficiency savings,” he explained. “We looked at actually managing demand within individual buying organisations.”

Chancellor Alistair Darling set the public sector an efficiency target of £9bn to be met between 2010-11 and 2012-13.

But John Hawksworth, PWC’s head of macroeconomics, said the full benefits of efficiency measures could take up to eight years to appear.

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Readers' comments (1)

  • Systems Thinkers know that this dangerous proposal, instigated by accountants will damage services beyond compare. It is based upon unit cost, something relevant to the manufacturing sector.

    It will push the costs of failing services into other areas of the system, for example to be picked-up by the voluntary sector.

    The simplification and standardisation of processes makes an equation that goes something like this:

    standardisation and simplification = cost savings

    But what systems thinkers have learnt is that simplification and standardisation in services (for example shared service centres, literally industrial-sized back-offices) wrecks quality and increases costs.

    See John Seddon talking about these problems at The Systems Thinking Review or at:

    http://www.vimeo.com/4670102 - Culture Change is Free

    It is a hugely important counter-argument that suggests that there is no evidence to support the shared-service, shared-back-office argument.

    Unsuitable or offensive? Report this comment

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