Headlines: April 24th, 2009

The Operational Efficiency programme launched by the Treasury in 2008 has produced a radical re-think on the way services are delivered to the end user. Currently services are organised on a vertical basis with, for example, employment services funded by the DWP, police by the Home Office and health by the DoH. Pilot schemes are to be launched with both a vertical and also a horizontal organisation which brings together all services within an area.

The current vertical arrangements make it difficult to meet the challenges of local places, citizens and clients. By joining up at the local level with local public service organisations such as primary care trusts, Job Centre Plus, local authorities and the police, it will be possible to move away from a traditional view of individual service areas limited by institutional boundaries. For this to happen, central government departments will also need to behave in different ways and new ways of commissioning and delivering services centred around local needs will need to be identified.

A new combined vertical and horizontal approach has the potential to make significant efficiency savings by removing duplication where there is overlap in the activities of local agencies, identifying new ways of delivering services at lower cost through joint innovation and investing in those public services that will reduce the costs of other local services.

Experimental projects in Cumbria and Birmingham have demonstrated how efficiency and effectiveness can be improved by working together across a place. Cumbria brought together leaders from all public sector bodies in the county to gain a shared understanding of the needs of the area, the services provided and the total levels of public spending. Cultural and organisational barriers were identified and ways devised to overcome them. The projects mapped how the 7.1 bn pounds of public money was being spent in the area and local organisations were challenged to produce ideas on what could be done differently to make savings. A saving of just one per cent across the county would result in a 70 m pounds saving a year.

Birmingham’s Local Strategic Partnership undertook a similar funding stream mapping exercise to that in Cumbria, with the aim of understanding spending. This identified that total public sector spending in the city will be 7.5 bn in 2008-09, or around 7,425 pounds per head. The expenditure is being mapped onto delivering outcomes in order to move to greater alignment between funding streams and outcomes in future. Birmingham City Council and partners are developing pilots to model how public spending in a particular theme or geographic area can be re-engineered to provide better priority outcomes.

The plan now is to roll out the ‘Total Place’ a programme in twelve pilot sites, including Suffolk, Norfolk and Westminster, to map total public spending in a local area and identify efficiencies through local public sector collaboration. A high level reference group will be set up to identify how to increase incentives and eliminate the barriers for joint working. There will be ministerial sponsorship to ensure that issues raised are addressed swiftly across government.