The survey demonstrates that governments around the world are facing challenges of how they will provide key services to their citizens. The economic downturn and aging populations are all factors having profound effects on the public sector. These factors are likely to put more demands on the public sector than it is presently seeing, but provide it with fewer resources with which to meet these demands.
Canada, the survey notes, has one or two years to draw up plans to change its business models to ensure its ability to continue providing key services during the difficult times ahead-without compromising on the quality of those services.
Other countries, particularly the UK and the United States, face greater challenges; these governments have borrowed heavily to bail out banks and manufacturers, and to finance fiscal stimuli.
KPMG International surveyed 124 government decision makers in six countries-Australia, Canada, Germany, the Netherlands, the UK, and the United States.
"We have never witnessed a time like this when so many countries have shared similar long-term challenges," said Craig Fossay, a Partner in KPMG's Government Sector practice. "Governments in Canada need to implement cost savings initiatives and performance measurement programs that will enable them to make tough decisions to create the healthy economy that we want and need in the future."
Other key findings of the survey are:
- Sixty three percent of global respondents are unlikely to change their strategy in the next year as a result of the current global economic downturn
- Eighty one percent of Canadian respondents are unlikely to change their strategy in the next year as a result of the downturn
- Sixty percent of global respondents are making long-term changes to try to put their organization in a good position for the next decade
- Fifty two percent of Canadian respondents are making long-term changes to try to put their organization in a good position for the next decade
- A quarter of global respondents are planning to change the eligibility criteria for the services they offer
- Only five percent of Canadian respondents are planning to change their eligibility criteria.
"The economic downturn has to be seen as an opportunity for the public sector to reflect on traditional ways of thinking and acting," said Astrid Göbel, of KPMG in Germany. "There are many examples of challenges like this generating new ideas and solutions."
How are public sector organizations planning to cope with this reality? Only 20 percent of global respondents indicate they are making radical changes to their organizations and are planning to change their business or service delivery models; however:
- Seventy seven percent of global respondents are planning to increase their productivity-to offer the same services at a lower cost
- Forty three percent of global respondents are planning to change (though not necessarily reduce) the range of services they offer.
Public sector organizations are complex and face certain statutory requirements to provide services. While private sector companies have the option to stop manufacturing products that are no longer profitable, governments don't always have that option. Once the public gets used to receiving a particular government service, it is very difficult to just stop providing it.
"It makes sense not to do something yourself that somebody else can do for a third of the cost," said KPMG's Craig Fossay. "For example, some governments have public private partnerships and have outsourced routine transactional activities."
Governments and public servants in Canada have the opportunity now to plan and implement the reform necessary to put the public sector in a good position to face the next decade.
For more information or to arrange a media interview, please contact:
www.kpmg.com/ca/en
KPMG LLP, a Canadian limited liability partnership established under the laws of Ontario, is the Canadian member firm affiliated with KPMG International, a global network of professional firms providing Audit, Tax, and Advisory services. Member firms operate in 144 countries and have more than 137,000 professionals working around the world.