Investing for efficiency

Rainer Majcen, managing director of arvato government services, highlights the key findings of The MJ and arvato government services Efficiency Survey of directors in local government - and explains how the right support from key partners can alleviate mounting pressures.

It will not come as a surprise that the over-arching message from the survey is that directors in local government feel under ever-increasing pressure to make the best use of resources in order to pave the way for long-term efficiency improvements.

While efficiency in the public sector is far from being a new concept - the pressure is now clearly being felt. Our survey shows that the biggest impact on budgets for almost 50 per cent of directors is the economic downturn, grant cuts and a fall in returns from investments and savings.

So how are budgets affecting the ways in which local government directors tackle efficiency programmes?

Several key measures are being planned to help meet financial challenges – inevitably, two thirds of respondents say they are looking at making staff cuts.

Capital expenditure will also be impacted, with almost 65 per cent saying that the level of planned investment and development will be reduced and projects stopped. Central services and transport are given as the two key areas which will be impacted.

In addition to these challenges, in the pre-Budget report at the end of last year authorities were presented with new targets - with the emphasis firmly on improving public services, delivering value for money and operational efficiency.

Whether or not these targets will impact on the services provided by these local authorities remains unclear - our survey shows an even split between those who feel they will and those who believe they will have no direct impact on their services.

So how can these targets be met and how can local authorities address the question of efficiency?

One way to reduce overheads is through the delivery of shared services - a proven model which not only lends itself to a customer-centric way of working, but removes duplication and speeds up service delivery.

Unsurprisingly, the results indicate a significant number of local authorities – almost 72 per cent – are already planning to share services, either with another council or with a combination of public and private sector partners. Moreover, almost half said they did not think they could hit efficiency targets without the help of private sector partners.

Another way to prevent budgetary cuts from impacting service levels is to introduce smarter ways of working – to deliver enhanced services with less resource and channel the resulting spare capacity into providing additional services, or release it through natural wastage.

In the long term, the greatest savings will be achieved by local authorities that develop the expertise to drive change internally. Here the private sector can provide invaluable knowledge and this expertise will always have its place.

Last month, arvato government services launched a consultancy service to help public sector organisations make practical process improvements - helping them work out the problems being faced and see where improvements could be made.

Evidently, there is a long way to go in the efficiency journey, but the good news is that 75 per cent of directors are confident that they are on target to achieve the next round of efficiency targets. This is almost certainly down to the forward planning that has taken place over recent years and the fact that many authorities have already started to enter into partnership agreements.

There is no doubt that a challenging few years lie ahead if budgetary challenges are to be met without compromising standards of service provision.

Local authorities are no longer just looking at measures to carry them through the next few years, they are planning for the long term and this is going to require some very bold moves.

For more information on arvato government services and its transformation and change consultancy services contact debbie.simpson@arvatogov.co.uk or call 07824 591 222

Practical Process Improvement in the Public Sector: A Complete Toolbox Guide for Lean and Six Sigma by Quentin Stephen Brook and Debbie Simpson is out this month, published by QSB Consulting Ltd, priced £24.99
ISBN 978-0954681357