Headlines: January 21st, 2010

Public sector organisations are not strangers to budget cuts. The traditional approach was to stop doing things that had no legal mandate and match expenditure to the reduced budget available. The result was that day centres for older people closed and grants to community groups dried up overnight. To ask local people to pay the price of budget cuts again would be indefensible when the scope for improving the quality of services and securing increased productivity is so great.

The major savings will come from adopting a total place approach of mapping expenditure and finding ways to deliver better services at lower cost and from sharing back office services and other cost savings measures. The scale of savings will be revealed in the Budget in March, but it is already clear that figures will be substantial. The article from the Luton and Central Bedfordshire pilot gives the first indication of what might be expected.

The progress report from the Leadership Centre shows that the first phase of Total Place will soon be concluded with the presentation of reports from the 13 pilots. It also reveals that enthusiasm for the approach has spread to some 80 parallel places.

The task force to advise ministers on the savings that might be made by adopting shared back office services, collaborative procurement, senior management restructuring and better asset management will also report next month. The NHS has calculated that sharing services and procuring collaboratively could deliver a saving of £1.8b.

Cuts in public expenditure in the March 2010 budget will be different in two ways. The scale will be unprecedented and there will be a menu of ways to increase efficiency. It has already been calculated that a 1% improvement in efficiency would deliver a saving of £600m. Scaled up this means that a 20% improvement would produce a £12b saving each year of the 3 year spending review.

Whatever number does emerge from the Total Place pilot reports and the task force report, it will be spread over the public sector and public bodies will be able to choose the path to follow from a varied menu. But the Viewpoint highlights the risk that the capacity to deliver radical change to a tight timetable may not always be present.

Another major difference compared to the past is that greater efficiency comes with improvements in quality. The article from Bournemouth, Dorset and Poole shows that older people will get a more responsive service, and the Kent article shows that the customer experience has been dramatically changed.