The Institute for Government (IfG) recently hosted a workshop in partnership with CIPFA on how Whitehall could better support improvements in public sector efficiency. We’ll have more on the outcomes of the session soon, but here we capture the opening remarks from Liz Truss, the new Chief Secretary to the Treasury. These embody many of important themes that I’m sure we’ll hear more about from the new Government.
The Chief Secretary opened her remarks by noting the obvious – it is clear we have a live debate ongoing about public spending. She believes that the Government needs to address how it communicates with the public about spending, and how it can help people understand the challenges.
She provided some colour on this, relating that she had recently had a discussion with some Year 10 schoolchildren about the links between taxation and spending, and found they were very interested and willing to engage in the debate. Her point was that our public discussion often focuses solely on tax – or solely on spend – as though these are separate. But the public – even schoolchildren – can be engaged in the more complex (and interesting) relationship between the two.
The Chief Secretary also mentioned another key issue for this government – how to use public spending to generate growth. She noted that it would be unwise at the moment to move away from the Government’s fiscal framework.
This led her on to her main point. In these circumstances we need better productivity from our funding and better efficiencies out of our public services. Insightfully, she noted that these terms – productivity and efficiency – don’t sound particularly ‘human’. Instead she preferred a more accessible, and more compelling, frame for the issue: how do we make sure every pound we spend is improving people’s lives as much as it can?
The Chief Secretary then got down to some practicalities that she wanted to see in place. First she noted that Government currently does not have the management information that can answer her question (which will not come as a surprise to readers of the IfG’s work). Similarly, she noted that Government doesn’t always know what parts of its budget will have the most impact. Some parts of Government manage this better than others – for example, she highlighted DWP which is working to continuously improve their programmes to help people into work by systematically rating their effectiveness.
Above all, the Chief Secretary is looking for ways to create a culture in Government where it is in people’s interests to challenge a lack of productivity. For departments to be as productive as she wants them to be, they need a continuous improvement culture. She believes this cultural shift would make both Government and public services a better place to work.
She was clear that the public sector pay policy was in place to help repair the public finances. But she argued that when you study retention figures, culture and leadership have an important bearing on whether people stay in their jobs. The key is whether it is a place where people feel that their work has a purpose. So improving culture will improve recruitment and retention.
The Chief Secretary’s central question, therefore, was how to embed a performance culture which is focused on improving people’s lives. She wants to know how we move to a place where ministers and officials are noted not for the size of their budget, but for what they produce with each pound they have.
She is looking internationally at which governments have a high performing culture, where it is business as usual to have continuous improvement, where staff are working with a purpose and where public services are making the most efficient use of resources.
The Chief Secretary was clear about where the UK needs to get to: rather than having the level of resources as the be all and end all, she cares that those resources are used efficiently.