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Is your organisation leaking cash?

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The Budget provided us with a not entirely unexpected but nonetheless worrying portent of the extent of further public sector cuts in the first two years of the next spending review period. 

Of course we have no way of knowing what share of the cuts will fall on local government but history has taught us that our exceptional ability to respond and adapt is also our Achilles heel when civil servants and Ministers are looking for real, cashable, savings.

We’ve responded to the in-year cuts of 2010 and the first year of the current Spending Review period apparently without breaking step; and all the signs are that 2012-13 will be delivered in much the same way. But with at least four more years to go, finding more and more savings is going to be increasingly difficult as the hanging fruit gets higher and higher.

That’s not to say that much of what we’ve delivered or plan to deliver hasn’t been difficult and painful at all sorts of levels, but the outward perception of many, I would suggest, has been one of ‘business as usual’ – my bins are still emptied, my streets are still swept and life goes on.

The question for me though is where will we find the ongoing savings and how will they be delivered.

One answer of course will be further rounds of ‘service reconfiguration’ – whatever that means to you locally. But I think another key area will be an ever increasing focus on procurement.  Not just the process of tendering but the whole cycle from project initiation through to contract management and commissioning.

In my view we will have to deliver increasing numbers of smaller value savings which aggregate to bigger numbers because we’re already cashing in most of the ‘big wins’. 

If I’m right then our minds must turn to the question of capacity and capability to deliver.

Is professional procurement embedded in the organisation and is it providing the strategic input we need; are our project and programme management systems fit for purpose and able to support swift and efficient project cycles, with feedback loops for continuous improvement; and do commissioning staff have the understanding and training they need to manage contracts.

If your answer to any of those questions is ‘no’, or ‘don’t know’, then I promise you your organisation is leaking cash – just like the £25,000 IT project I discovered a few years ago that, by my conservative estimate, had already leaked £250,000 without anyone noticing and showed no signs of coming to an end.

Hugh Grover, director of fair funding and performance, London Councils

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