But how can we become more efficient?
By André Bedlow.
Many of you will already be acutely aware that the Government has set a further £4.9 billion efficiency target for the public sector as part of its spending review. This amounts to three percent of local government budgets year on year. This seems laudable, but worrying messages are coming from the senior officers about the impact on service delivery, with 68% planning to reduce their staff head count as the main way to achieve savings. The proportion of directors who feel that meeting the efficiency targets will have a knock on effect on services has increased from 31% to 41%.
It is clear that any organisation’s workforce must fit its need to deliver its outcomes (and this could include downsizing or outsourcing), but an artificial need to become more efficient should not be the main driver if this puts service delivery at risk. It is the cumulative impact of efficiencies that is the most challenging and reluctance to share services (and subsequently relinquish control) is proving a key barrier to making the necessary changes. It is important for the local government sector to fully explore all methods of achieving savings, including smarter procurement processes for buying goods and services and using technology to improve processes such as working from home. In addition, collaborative working could be extended to areas such a fund management to pool market expertise. It is also vital for councils to access the £185 million of seed funding for efficiency initiatives being made available through the regional improvement and efficiency partnerships (RIEPs), which go live next month.
Councils should also explore their processes for identifying efficiency savings. Many opt for a highly centralised approach to identify opportunities such as outsourcing back office functions or joint working. However, staff and service managers should be encouraged to come up with ideas for working more efficiently (including doing more with the same level of resources, described as 'non-cashable' efficiency savings). This requires more investment in their understanding of the issues than simply including efficiency savings headings in service planning templates. The greatest benefits arise when councils develop service planning processes with staff and develop systems to capture and learn from ad hoc feed back.
The identification and mapping of processes also leads to greater efficiencies, as it actively involves the identification of activities that add value and the cessation of anything that does not or is deemed too onerous to justify its continuation. By encouraging managers to map their key processes over the three year period, councils will be unlocking their home grown potential for identifying efficiency savings along with the added benefit of encouraging a corporate culture of learning and continuous improvement.
