Summary

The Institute for Government and the Chartered Institute of Public Finance and Accountancy (CIPFA) aim to help make government more effective. It is fundamental to effectiveness that ministers, officials and the public know how well government is performing, and use this information to guide decisions.

This first edition of Performance Tracker therefore provides a data-driven assessment of the Government’s performance in one crucial area – running public services. People rely on public services in their daily lives, and their sense of how well government is doing is shaped by their direct experience of the front line. Performance Tracker looks in detail at five services: hospitals, adult social care, schools, prisons and the police.

The first independent analysis of its kind, Performance Tracker assesses performance in the light of both the 2010–15 Coalition and the current Conservative Governments’ stated ambitions to maintain, and in some cases expand, the scope and quality of services; to control spending, cutting it in some areas and constraining its growth in others; and to achieve this by raising the efficiency of public services, ensuring they do more for less.

This new, independent analysis sheds light on the heated, but opaque, debate about whether our public services are at breaking point or whether there is room for more efficiency. The aim of our analysis is to prompt better financial planning in government, which will improve the oversight of essential public services.

Our findings

The data in this first edition of Performance Tracker shows that:

  • The 2010 Spending Review* was largely successful in terms of the Government’s stated objectives. Originally viewed as a one-off period of pain following the 2008 financial crisis, before an economic recovery led to a return of business-as-usual, the 2010–15 spending reductions took place after several years of investment and growth. At first, government succeeded in enhancing the performance of a range of services, maintaining their scope and quality while sharply cutting or controlling spending.
    • The police service successfully implemented large spending reductions between 2010 and 2015. Despite fewer police officers on the ground and signs of stress in the workforce, public confidence in the service grew.
    • Violence in prisons remained level up to 2013, despite an 18% reduction in spending and a 14% reduction in frontline staff.
    • In schools and hospitals, where spending growth was constrained, the data suggests modest improvements in efficiency, where services absorbed rising pupil and patient numbers respectively.
  • However, the Government is struggling to successfully implement the 2015 Spending Review. Even before the 2015 Review, there were clear signs of mounting pressures in public services. For example:
    • People had been routinely waiting longer for critical hospital services such as accident and emergency (A&E) and cancer treatments since 2013, and while clinical standards within hospitals were holding up, this was being achieved through record deficits.
    • Delayed transfers of care from hospital to home or social care had also risen sharply since 2014, up by 40% in two years.
    • Violence in prisons had been rising sharply since 2014, with assaults on staff up by 61% in two years.

Since the Review, carried out in November 2015, these trends have only intensified, pushing services such as adult social care and hospitals towards breaking point, and in the case of prisons beyond that point. Governments of all shades have long promised to transform public services by reducing demand, making better use of technology and finding new ways of working. But the growing pressures on services show these ambitions have yet to be realised.

The facts established by the data do not appear to be feeding into decision-making. Instead the pattern in this Parliament has been one of the Government:

  • failing to develop alternative strategies despite the clear warning signs in the data
  • continuing to pursue approaches that are no longer working
  • being forced into emergency actions in response to public concern
  • providing emergency cash to bail out deeply troubled services.

The Chancellor announced extra funding for the Ministry of Justice in the 2016 Autumn Statement, in the face of urgent prison safety concerns that had been emerging since 2014.

When adult social care received no relief in the same Autumn Statement, widespread criticism forced the Government to allow councils to bring forward further council tax increases to provide extra short-term funding.

The Government has continued to hold fast to its approach to National Health Service (NHS) funding and transformation, despite calls for a new direction from the chief executive of the NHS, sector advocates and experts.[1]

However, following a challenging winter for hospitals – which has recently seen Jeremy Hunt, the Secretary of State for Health, acknowledging that there are “extraordinary pressures” and characterising some performance as “completely unacceptable” – the Government may look to revise its plans around the Budget.[2]

Our recommendations

Performance Tracker highlights both immediate challenges facing the Chancellor and long-term weaknesses in the financial planning of government, which undermine his ability to meet these challenges and oversee public services effectively.

In the coming Budget on 8 March 2017, the Government must show that it is addressing:

  • those areas where it has already been forced into emergency action. For prisons, this is likely to involve ensuring that there are enough resources to operate the prison estate safely and securely. Any further cuts are unlikely to come through greater efficiency, and would instead require a substantial reduction in prisoner numbers, whether through sentencing reform or major improvements in reoffending rates. For adult social care, the sector needs a clear direction of travel, following the postponement of the Dilnot Review implementation and the slow pace of genuine health and social care integration.
  • those areas where pressure is building, most importantly in hospitals. The NHS Sustainability and Transformation Plans (STPs) – regionally derived plans to maintain and improve the quality of local healthcare services within current spending envelopes – are nowhere near the concrete organisational (and political) plans needed to prevent recurring overspending and service deterioration. The Government needs to show how STPs can deliver, or find a new approach, before the freeze in NHS funding built into the next two years’ plans really bites.
  • efficiency across the board, setting out progress on the Government’s Efficiency Review.** The Government needs this to be a serious, data-driven exercise. It should use information such as that in Performance Tracker, alongside wider findings, such as those of the What Works centres. Instead of repeating aspirations to transform services, it should analyse why such transformations have not occurred in the past, and develop strategies that can succeed this time around. And it must take seriously the emerging signs of pressure, such as recruitment problems in teaching and rising stress levels in the police.

The Government should also consider how it can embed efficiency within public sector decision-making. It is in ministers’ and the public’s interest to prevent wishful thinking, and to stop pressures building to breaking point.

  1. The Chancellor should instruct the Treasury, working with departmental finance and analytic professionals, to develop its own Performance Tracker, matching spending in public services to an assessment of demand, scope and quality. This should be used as the basis for developing and managing improvements in efficiency over time.
  2. The Treasury should publish this Tracker or, at a minimum, make the key assumptions underpinning spending decisions public and available for scrutiny by Parliament.
  3. The Government should subject these assumptions to independent review to assess their realism, potentially through an ‘Office for Budget Responsibility (OBR) for public spending’.

Right now, the pressures on services are real and easy to identify. In the upcoming Budget, the Chancellor cannot simply choose to ‘tough it out’, eschewing any reference to how the Government will deal with the mounting pressures in public services, as he did in the 2016 Autumn Statement, when his only announcement was emergency funding for prisons. The Government risks being bounced from crisis to crisis, unable to get a grip on the situation. Without action, within the next two years it could face a disastrous combination of failing public services and breached spending controls against a background of deeply contentious Brexit negotiations.

* Throughout the report, we include the 2013 Spending Round (which essentially extended Spending Review 2010 by one year to take the Coalition Government’s plans beyond the 2015 general election) within the 2010 Spending Review period.

** Initially announced in George Osborne’s 2015 Budget speech, Philip Hammond has also committed to this new initiative to find £3.5 billion (bn) of efficiency savings by 2019/20 and ‘embed a culture where incremental improvements in the efficiency of public services are made year on year’. Cabinet Office, ‘Government announces efficiency savings for 2015/16’, 3 February 2017, https://www.gov.uk/government/news/government-announces-efficiency-savings-for-201516