16 July 2018

Nick Davies says the Government should think hard if it expects to save money through public service reform.

Next year’s government spending review will be an even harder job than the two carried out since 2010. The political backdrop is more difficult, departments – having seen the funding promise given to the NHS - are queuing up for more, and, as the IfG’s Performance Tracker has found, the belt-tightening measures – like holding down wages – used by government to date are not sustainable.

Finding more durable savings will require a serious rethink about how public services are provided. At a recent discussion, hosted by the Institute for Government and Sopra Steria, of what are known in the jargon as ‘public services transformations’, two messages emerged. 

Successful transformations take many forms but won’t always lead to savings

We started with a very broad definition of public service transformations’: ‘System-wide reform that fundamentally changes the delivery model of a public service’. A public service transformation might include moving from paper forms to online, merging and integrating separate services, or using a charity or private sector company to deliver the service. Such changes might happen in Whitehall or town halls, and could involve reorganising back office functions like finance and HR or alter how members of the public access the service.

Views will differ as to how successful a transformation has been. The Treasury might see success in sustainably reducing cost, while maintaining service quality. But a transformed public service might provide support to people whose needs were unmet by the previous service, potentially costing more. Equally, a new service could stimulate demand that would otherwise not have existed.

A number of the successful and cost-saving transformations cited by workshop participants – for example the digitisation of tax returns, passport renewals and car tax renewals – are in areas where unmet need is low and a service redesign is unlikely to create fresh demand. These are also all straightforward and universal government services, rather than highly personal ones targeted at vulnerable individuals. If government is looking for savings from public services, it needs to pick its targets and approach carefully.   

We are identifying common factors as to 'what works' when transforming public services

Public services and attempts to transform them take many forms. Is it possible or even helpful to think about common factors that might contribute to the success or failure of public service transformations in general?

An attendee at the event suggested that the Anna Karenina principle – happy families are alike; every unhappy family is unhappy in its own way – could be applied to reforms of public services. It is much easier to generalise about successful transformations – where almost everything has gone right – than it is to generalise about unsuccessful ones – where a wide range of individual factors or combination of these could have contributed to the failure.

Key factors cited at the workshop included the quality of leadership, clarity of purpose, resourcing, and involvement of the public. How these will apply will depend significantly on the transformation concerned but there do appear to be shared features. And if there are shared features then there will be measures that all parts of government could implement to ensure that public service transformations are delivered more successfully, more often.