Increasing numbers of public sector organisations will be subjected to intervention as the impact of deficit reduction measures hits the front line over the next 12 months, according to KPMG’s Head of Public Sector. However, he also argues that 2013 need not be a catalogue of disasters and difficult decisions, if fresh approaches to public services are adopted and new initiatives are given a chance to succeed.
Alan Downey says: “Many public sector leaders are approaching 2013 with a hint of trepidation, nervous in the knowledge that the reserves that kept their organisation going in 2012 are running out. With bail outs less likely and more cuts on the way, I expect to see an increase in the number of organisations facing the public sector equivalent of insolvency. The best case scenario will be a rise in the number of distressed organisations pooling resources or merging. The worst will witness a step change in failing organisations facing special measures, with tough new management teams parachuted in to resolve crisis situations.
“The good news is that the Government remains committed to reform and, in some cases, radical change. As a result, the next year will see more decentralising of power and a greater array of public services opened up to competition. Whether this will lead to improved results and a better delivery of key services remains to be seen, but the chances of success will improve if new ideas are given a chance and new approaches to budgeting are put to the test.
“Of course, the onus for change cannot rest entirely on the Government’s shoulders; some responsibility for ‘social financing’ must be accepted by service providers. That’s why we should be encouraged by the adoption of concepts such as ‘Payment by Results’ across the public sector. Whether linked to the Work Programme or initiatives designed to reduce re-offending, the taxpayer will only put his hand in his pocket to pay for success. It’s a sure-fire way to boost productivity, deliver results and keep costs down.”
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Media enquiries:
Mike Petrook, KPMG Press Office
020 7311 5271 (t), 07917 384 576 (m) or mike.petrook@kpmg.co.uk
Notes to Editors:
About KPMG
KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and operates from 22 offices across the UK with over 11,000 partners and staff. The UK firm recorded a turnover of £1.7 billion in the year ended September 2011. KPMG is a global network of professional firms providing Audit, Tax, and Advisory services. We operate in 152 countries and have 145,000 professionals working in member firms around the world. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. KPMG International provides no client services.
