Government and not for profit

Sector overview

The cost of public services was nearly 50% of GDP in 2010. As a result, the government has embarked upon an unavoidable deficit reduction plan, an urgent priority to secure economic stability at a time of continuing uncertainty in the global economy.

But if the economy is to be “fixed” by seeking to deliver more services for less money, it’s vital that the fix doesn’t cause any degeneration in public services. Healthy public services are vital for the wider health of society and as a foundation for economic growth:

• The increasing numbers of (tax-paying) workers that society requires to support a growing, ageing population need to be fit, and must have access to good healthcare
• Without a decent educational system, UK employers will not have the requisite pool of talent to draw on to develop their services
• If critical front-line service organisations provide retiring employees with generous pensions (providing an impetus for many to consider leaving the UK workforce prematurely), there will be less money to spend on those services.

Given these circumstances, the primary item of debate in the public sector battleground is productivity.

But the public sector doesn’t have the same freedom as the private sector to address productivity issues through, for example, innovation, procurement, redundancy, and rewards for exceptional achievement. Furthermore, whilst public sector transformation is inevitable, it will be tempered by the level of union involvement and protocols not typically witnessed in the private sector.

Whatever the framework through which change will be driven, it is likely that the outcome will be that public services will be delivered in new and different ways. One such change will be the outsourcing of service provision (including the transfer of those who perform these services). Other solutions will include the in-sourcing of expertise and new joint public/private/third sector enterprises. All are likely to result in some adjustment in prioritisation of service provision, based upon affordability.

During such a hiatus of change, resourcing needs will ebb and flow. Interim expertise, in areas such as transformational change or strategic HR will be invaluable, not least so because many of these senior professionals have already been working on the issue of ‘rightsizing’ organisations in the private sector as the global financial crisis took hold.