By David Williams
21 January 2010
Public bodies must look to save money on staff budgets and frontline services if they are to reduce costs, two leading government regulators have said.
Outgoing Audit Commission chief executive Steve Bundred also suggested that staff cuts could lead to improved morale among workers motivated to provide quality public services.
Bundred and auditor general Amyas Morse were giving evidence to the Commons public administration select committee this morning.
Asked by committee member Gordon Prentice whether staff cuts led to improved morale among those who remained, Bundred said: ‘Yes, that’s correct. It shouldn’t be surprising because people doing public services in order to deliver good quality services to the public don’t want to spend their time coping with a financial crisis.
‘So when the financial crisis is dealt with, and the staff can spend their time on the services they provide, rather than on the budget, of course they’re bound to be more satisfied.’
Asked about the effects of a £2m cut in the Audit Commission’s pay bill – including scrapping director bonuses, and a cull of 89 posts – Bundred said: ‘Morale is very high in the Audit Commission and continues to improve.’ He added that a two-year cap on public sector pay suggested by Chancellor Alistair Darling was ‘entirely appropriate’.
Bundred noted that some councils had already begun to cut back on staff, and also argued that efficiencies could be found in frontline services as well as in the back office. He said it would be ‘insane’ to consider exempting any services from cuts, including health and education, which had been most generously funded over the past decade.
Morse told the committee: ‘If a large part of your cost base is headcount, you’re not going to reduce your costs without looking at that.
‘A significant part of cost drivers in the public sector are people, and it’s very unlikely that will be excluded from how you achieve serious cost reduction.’
Morse added that government departments could streamline their working methods by stripping out layers of management from the decision-making process.
Drawing on his time working as commercial director at the Ministry of Defence, he criticised ‘the capacity of organisations to spend a huge amount of resources talking to themselves’.
He added: ‘If you cut that out, you get a remarkably direct process.’
21 January 2010
Public bodies must look to save money on staff budgets and frontline services if they are to reduce costs, two leading government regulators have said.
Outgoing Audit Commission chief executive Steve Bundred also suggested that staff cuts could lead to improved morale among workers motivated to provide quality public services.
Bundred and auditor general Amyas Morse were giving evidence to the Commons public administration select committee this morning.
Asked by committee member Gordon Prentice whether staff cuts led to improved morale among those who remained, Bundred said: ‘Yes, that’s correct. It shouldn’t be surprising because people doing public services in order to deliver good quality services to the public don’t want to spend their time coping with a financial crisis.
‘So when the financial crisis is dealt with, and the staff can spend their time on the services they provide, rather than on the budget, of course they’re bound to be more satisfied.’
Asked about the effects of a £2m cut in the Audit Commission’s pay bill – including scrapping director bonuses, and a cull of 89 posts – Bundred said: ‘Morale is very high in the Audit Commission and continues to improve.’ He added that a two-year cap on public sector pay suggested by Chancellor Alistair Darling was ‘entirely appropriate’.
Bundred noted that some councils had already begun to cut back on staff, and also argued that efficiencies could be found in frontline services as well as in the back office. He said it would be ‘insane’ to consider exempting any services from cuts, including health and education, which had been most generously funded over the past decade.
Morse told the committee: ‘If a large part of your cost base is headcount, you’re not going to reduce your costs without looking at that.
‘A significant part of cost drivers in the public sector are people, and it’s very unlikely that will be excluded from how you achieve serious cost reduction.’
Morse added that government departments could streamline their working methods by stripping out layers of management from the decision-making process.
Drawing on his time working as commercial director at the Ministry of Defence, he criticised ‘the capacity of organisations to spend a huge amount of resources talking to themselves’.
He added: ‘If you cut that out, you get a remarkably direct process.’
