Public sector finance directors have identified the demand for efficiency savings as their number one pressure
After a year-long examination of spending in the public sector, the Treasury’s Operational Efficiency Programme found scope for £15bn of annual efficiency savings, including £7.2bn from government IT and back-office operations.
This, coupled with the looming deadline for councils to achieve £4.9bn cash-releasing savings by 2010/11, leaves no doubt that the pressure to achieve quantifiable operational efficiencies in the public sector has never been greater. In the current economic climate, this challenge is exacerbated by tightening investment budgets and an increasing demand for demonstrable value for money.
In a recent CIPFA survey, 93% of public sector finance and resource directors said that demands for efficiency savings and value for money were their most pressing agenda items; 74% were under greater pressure to provide results and maintain services. The survey covered 129 directors across central and local government, health, police, education, housing and charities.
With the concerted shift towards a ‘Digital Britain’, it is well acknowledged that back-office efficiencies can significantly reduce operational costs. Specifically, re-engineering and streamlining business processes and using IT to align workflows with business objectives are tried and tested ways.
By automating the repetitive, but business-critical processes, organisations can adopt best practices, reduce risks, and release valuable resources for frontline services to enhance customer service and become more agile to meet the evolving demands for public service.
Take the London Borough of Lambeth’s Land Charges Department. When service requests were processed manually, the department employed 15 staff and typically took ten days to turn around land search requests.
However, since the processes have been automated, the same level of work is now managed by two employees and the search turnaround time is just an hour.
On a larger scale, Herefordshire Council’s recently announced transformation programme is expected to make the organisation more efficient and customer -focused – and save £5m per year. It is adopting technology to remove duplication of services, integrate customer and support services, offer performance management and significantly reduce the amount of paper across the organisation.
Further, actual IT spend and evaluation of the accruing operational efficiency benefits will be closely scrutinised in future. In fact, one of the main recommendations of the OEP report is that all organisations across the public sector should use audit agencies’ value-for-money IT indicators. Similarly, central government will be measured against the new Cabinet Office IT benchmarks.
Workflow technology can allow organisations to integrate management information on IT spending into day-to-day operational procedures so that the necessary data are collated and benchmarked. In effect, they can turn an arduous process of data collection and management into a standardised and simplified procedure. They will also have critical IT governance information at their fingertips.
Public sector organisations can make further cash savings by setting up partnerships to leverage their collective power. However, this will require embracing a new culture. It will need true leadership and the coming together of IT and finance professionals to devise feasible ways of collaborating.
The challenge of finding efficiency savings while maintaining the quality of frontline services in the face of funding cuts is not easy. But technology can streamline back-office operations enough to both cut business costs and improve customer service.
Peter Dye is director of platform management at LexisNexis’s practice and productivity management business, which provides workflow systems
