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Jacky Ross on public sector cuts and tackling the impacts on non-core services and the back office
How to make cuts without impacting front line services
When the new government came in we heard that there was absolutely no money left in the coffers. That meant there were going to have to be cuts of something like 15-20% across the public sector.
What was decided was that the brunt of those costs should be borne by non-core services and the back office.
Just recently I have been talking to people and what we are now hearing is that it’s probably not going to be 20% but something more like 40-50% cuts in the back office and that those cuts are going to have to be made in the next 12-18months. That’s scary.
The challenge then for the public sector is how are they going to make those 40-50% cuts? Where do they cut? How do they cut? And how do they do that without damaging the business, without impairing the business’s ability to carry on operating. So, if they have been providing those services in the past - Finance, HR, Estates, Procurement, IT, Communications. If all of those services have been fundamental to the business in the past, how can we cut them by 40-50% and still operate effectively?
The answer is that there are probably quite a few ways that organisations can actually tackle those areas of their business and take out some sizable chunks of cost, whilst still keeping services at an adequate level for the business. SO the starting point surely has to be to actually work out what it is you really need. Define the services that are essential to carry on running your business and then think about the things that you could maybe stop doing all together.
In the commercial sector, one renowned CFO when he arrived in his organisation told his organisation to stop producing any management report s - no information to anybody – cut it off...He said we are only going to start producing reports when people “clamour” for them to come back again and when they give us a real business justification for us producing those reports. So we know that if we then produce those reports they are the one that the business really wantsIN some public sector organisations I have had those conversations with Finance Directors where they feel that information just isn’t being used actively in their business.
So thinking about what you really need to support the business and stopping doing the things taht you really can survive without – that there isn’t a huge business case for, that don’t create value in your business, that surely has to the starting point...don’t do those things.
But then when you look at that, be clear about who your customers are, find out what their requirements are, your services may be non-core services but clearly people have been using those to do their own jobs to provide their core services so find out what is needed and define those requirements and then you can use that as a basis for prioritising what you do, making decisions based on the money you’ve got available and the value you can add in the business.
