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All spent out…?

With the public sector under increasing financial pressure, CIPFA has a some suggestions that just might help

May 2017

For the Government to be effective, ministers, policy makers and civil servants require a clear, evidence-based understanding of how it is performing, especially during this period of heightened public finance pressures and tightening spending controls. In a report released recently, CIPFA and the Institute for Government warned that unless immediate action was taken, the UK faced a combination of failing public services and breached spending controls.
The report, The Performance Tracker, used the Government’s own data to assess the effectiveness of public services in five specific areas: hospitals; adult social care; schools; police; and prisons. The analysis found that after initial success in improving public sector efficiency following the 2010 austerity drive, the Government is now struggling to implement the spending cuts handed down in the 2015 Spending Review.
The recent Budget pledge to boost social care funding by £2bn over the next three years provides welcome news for many councils, particularly given the report’s findings. Nevertheless, the Chancellor’s plan for government departments to outline spending cuts of up to 6%, in a bid to save up to £3.5bn by 2020, is likely to exacerbate existing pressures on public services. And because of this, it is even more important that future decisions about spending are based on a realistic assessment of the performance of public services that can survive public scrutiny.
The 2010 Spending Review was largely successful in terms of the Government’s objectives. Originally conceived as a temporary period of pain following the 2008 financial crisis, before an economic recovery led to a return of business-as-usual, the 2010–15 spending reductions took place after several years of investment and growth. In the beginning, the Government succeeded in improving the performance of a range of services, maintaining their scope and quality while cutting or controlling spending.
The police service successfully implemented large spending reductions between 2010 and 2015. Despite fewer police officers on the ground and signs of stress in the workforce, public confidence in the service grew. Violence in prisons remained level up to 2013, despite an 18% reduction in spending and a 14% reduction in frontline staff.
In schools and hospitals, where spending growth was constrained, the data suggests modest improvements in efficiency, where services absorbed rising pupil and patient numbers respectively.
However, the government is struggling to successfully implement the 2015 Spending Review. Even before this review there were clear signs of mounting pressures in public services.
People had been routinely waiting longer for critical hospital services such as accident and emergency (A&E) and cancer treatments since 2013, and while clinical standards within hospitals were holding up, this was being achieved through record deficits.
Delayed transfers of care from hospital to home or social care had also risen sharply since 2014, up by 40% in two years.
Violence in prisons had been rising sharply since 2014, with assaults on staff up by 61% in two years.
Since the Spending Review, carried out in November 2015, these trends have only intensified, pushing services such as adult social care and hospitals towards breaking point, and in the case of prisons beyond that point. Governments of all shades have long promised to transform public services by reducing demand, making better use of technology and finding new ways of working.
The facts established by the data do not appear to be feeding into decision-making. Instead the pattern in this Parliament has been one of the Government:
• Failing to develop alternative strategies despite the clear warning signs in the data.
• Continuing to pursue approaches that are no longer working.
• Being forced into emergency actions in response to public concern.
• Providing emergency cash to bail out deeply troubled services.
The report goes on to make several recommendations, including that assumptions behind spending decisions should be subject to independent scrutiny. Governments of all shades have long promised to transform public services, but these ambitions have never truly been realised.
To counter this, the report suggests that government should consider creating an ‘Office for Budget Responsibility for public spending’, to help embed efficiency within public sector decision-making.

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