Protecting public services while cutting costs

The new chancellor should enable more spending on ICT by considering cutting deeper in other areas, as he continues to assess public expenditure in the run up to June’s emergency budget.


This may seem counter-intuitive, but it is the only way to achieve greater efficiency and reduce the UK’s public spending deficit, while protecting 'frontline' services.

At any point in time, the efficiency of each of the government’s operational units is determined by its organisation – its 'ways of working' or business processes – as well as the tools it uses for these activities.

The three factors of quality of service, throughput (or volume), and resources are in dynamic balance. So, if you decrease the resources available to handle the same volume, the quality suffers. The only way to maintain service levels at a constant volume while reducing resources is to change something in the organisation – the business processes or the tools used.

Now most services delivered by the public sector rely on ICT systems to support business processes. If business processes are changed, this will require changes to ICT systems – and this is the rationale for increasing ICT spending. The only way to improve efficiency is to change the organisation structure and the ways of working.

While the government has already pledged to cut £1.7 billion from “IT programmes, suppliers and property”, along with a further £95m “through savings in IT spending”, it is likely that this only represents the 'low hanging fruit'.

The difficult task will be reviewing the IT spending commitments made by Labour in the lead-up to the election, looking at how to cap costs and over-runs on current and future IT projects, and overhauling the reliance that Government has on consultancy.

In formulating new projects, departments should not go for ‘big is best’. Instead, the focus should be on quick and timely delivery of identified benefits – instead of encapsulating requirements in one grandiose project, ICT staff and suppliers should be challenged to break these behemoths down into bite-sized, digestible chunks.

In the past, civil servants and sponsors achieved status for running large programmes of work. The larger and more costly, the higher the prestige. This needs to be reversed. One way to achieve this is to establish an independent external review panel made up of experts without vested interests in the area, whose role is to challenge large programmes.

This could be done as part of the National Audit Office’s responsibilities for efficiency reviews. Under this regime, any programme of work with a total value of £1 million or more should be subject to independent scrutiny within six months of approval.

This will not slow down the initiation but will add a pressure on sponsors of projects to make sure that the projects are well formed. The independent review’s decision should be binding on the sponsor. So if a negative report is filed, then funding for the project should be terminated.

The independent review panel should consist of both public and private sector resources. Expertise from universities and business schools would be most useful as they are independent of both the civil service and the suppliers.

Advisory consultants can also be used – if Capgemini is involved in a project, for example, there is no reason why Logica or some other firm independent of the supplier cannot be involved in the review process.

In the past, the public agenda for ICT has been heavily influenced by suppliers. The public service practices of most professional firms spend much time and effort in cultivating relationships with senior civil servants and decision makers.

This has been at the detriment of developing in-house expertise within the public sector. There should be a focus on developing a cadre of highly skilled public servants in the specification and design of ICT programmes and projects. Investing in education and training would be a good start.

This debt crisis is a good opportunity to improve the efficiency of our public services. Let’s not waste it!

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