The United Kingdom (UK) National Debt, as of Q1 2015, amounted to a slightly scary £1.5 trillion pounds - or about 80% of total Gross Domestic Product (GDP). It sounds a lot. It is a lot. The interest payment alone equates to £43 billion pounds and without a significant reduction in cost or an economic boost, the debt will grow by £100 billion per annum - or some £2 billion each week. Big numbers, big issues - 'wicked problem'.
For such a big and complex problem that has more global interdependencies and variables than the bottom line numbers, there are many informed and uninformed views of how it should be tackled. Now that the 2015 UK general election has been decided, the re-elected Government approach is to continue significant public sector spending cuts, whilst encouraging and providing incentives for business - all to help the economy to grow.
Let's dig down a little further. Where will the reductions in public spending come from? It won't be from healthcare or schools - they are protected. So, it leaves other portfolios to burden the required fiscal savings, for example; Ministry of Defence, Department for Work and Pensions, Department of Communities and Local Government, and the Home Office (including security and law and order).
Well, the majority of public sector spend is on wages, so you've guessed it - the biggest cull of public sector jobs for at least 50 years is required across the UK, with potential reductions in headcount reaching 40% over the next few years.
Each individual partner agency will experience difficulties in managing the breadth of service provision; managing demand; maintaining standards; ultimately, retaining satisfaction and confidence; but most importantly – continuing public protection.
A key theme emerging is the reduction in pro-active productivity. Agencies are understandably focusing their resources on tackling high threat/harm/risk service cases, and this shifts the agency from prevention to treatment. A greater emphasis on high risk services sounds like good prioritization - not true, this is false economy:
Treatment rather than prevention will grind services down to a point of surrender - the model would not be sustainable in the medium to long-term.
We have to reduce demand.
The potential impact for each agency is high, but what about the collective impact? All partners across the public sector are 'retreating' - at different rates, at different times - and critically, without a full understanding of the impact that their own actions have on other agencies. This leads to uncertainty of the medium and long-term impact this could have on society.
Strategically fragmented and sub-optimal. Agencies are carrying out a number of approaches from 'salami slicing' through to collaboration, strategic alliances, regionalization and multi-partner mergers.
The problem is the lack of a transformation 'blueprint' that brings together partners under a set of common priorities and infrastructure (e.g. estates, finance, procurement and Information Technology). Partners are navigating the waters on their own, fighting many political storms in order to preserve and protect services against the back drop of the fiscal 'reaper'.
Progress, innovation and harmony is in fact being achieved - the human race is incredible under adversity. Money is being saved through removing waste, sharing services, locations, equipment and staff.
However, this direction of travel needs to accelerate and move to the point of being a fully integrated services model in order to save the required money and deliver improved public outcomes.
Stay tuned for Why Big Data Holds the Key to Integrated Public Services - Part 2 where we explore the role analytics can play.