KPMG has estimated that the predicted 15-20% cuts in public service budgets is now working out in many organisations closer to 40-50% over the next 12-18 months. This development has raised the issue of making more severe cuts to the back office, without impacting front line services.
The advice from KPMG on responding to this issue is to view the back office as an asset, rather than a liability. The Consultancy argues that an efficient, well-managed back office is a tremendous asset to the public sector. It points out that there are private investors eager to buy up public back offices, which would offer staff security, longevity and the chance to develop.
It also suggests that it’s not all about jobs. Cutting the number of back office staff is not the only way to make cost savings. It advocates defining essential services within the function, asking the business to request what it really needs with firm justification, and strip out activity that is not creating value.
KPMG stresses that the back office should always be focused on the needs of the taxpayer, not just the front office. The public must be a key consideration in changes made to back office functions to ensure that an efficient, value service is delivered.
In the US, public sector bodies are obliged to share back office services or face funding cuts. It is suggested that if public bodies do not embrace shared services more enthusiastically, a similar measure may be introduced in the UK. The back office provides many opportunities to make use of shared services and to pool funds, talent and technology across regions and services.