News analysis Scottish services must be best in world

9 Nov 06
Efficiency is the buzzword of the moment in public services, and that is just as true in Holyrood as it is in Westminster.

10 November 2006

Efficiency is the buzzword of the moment in public services, and that is just as true in Holyrood as it is in Westminster.

Tom McCabe, the Scottish Executive's minister for finance and public service reform, has launched an ambitious programme, Efficient Government, to realise cumulative efficiency gains of £1.73bn by 2007/08. He has also been spearheading the formulation of a far-reaching public sector reform strategy, publishing a consultation document, Transforming public services, in the summer.

When McCabe delivers his proposals in the New Year they are likely to lead to a major shake-up in the way public services north of the border are configured and run.

He has already made it clear that, as far as he is concerned, Scotland has too many public bodies, with 32 councils, 15 health boards, eight police forces, eight fire brigades and various quangos. He wants to avoid duplication of effort and waste of resources.

The minister's conclusions are likely to form the Scottish Labour Party's public policy platform in the campaign for next year's Scottish Parliament elections.

Public Finance, in association with performance and information management company Aspiren, brought together the finance directors of Scotland's local authorities, who are in the front line of the efficiency and reform drive, to listen to the perspectives of the private and public sectors on the efficiency programme and to debate the issues raised.

The event, which took place in the Macdonald Marine Hotel in North Berwick, East Lothian, on November 2, was chaired by Alan Logan, head of finance at West Lothian Council. It provoked a lively discussion among those directors in attendance.

Ruth Parsons, head of public service reform and efficiency at the Scottish Executive, opened proceedings. As the senior civil servant overseeing the reform agenda, she lost no time in throwing down the gauntlet to the assembled audience.

'We want to be the best small country in the world for public service management,' Parsons declared. 'But at the moment not enough of what we do meets that standard.'

She acknowledged that Scotland faced particular challenges, such as high levels of ill health and large numbers of young people not in education or training. But she warned that there was an even greater hurdle – a financial one – to come. Just as public services elsewhere in the UK are set to feel a funding squeeze after 2008, so too, Parsons warned, are those in Scotland.

'It's been reasonably comfortable in Scottish public services, but that's not going to be sustained in the tighter fiscal climate,' she said.

In such a climate, efficiency and reform were 'two parts of the same agenda,' Parsons added. 'Trying to manage our organisation as efficiently and effectively as we can is our duty as public servants.'

She identified four key strands to delivering greater efficiency: effective procurement, good asset management, a shift towards shared services and proper sickness absence management. On procurement, Parsons said that 'leveraging from 32 to the power of one, to one to the power of 32' was in everyone's best interests.

Parson's call for more collaboration between different public bodies was echoed by the second speaker, Tony Rush, a member of the CBI Scotland council and chair of construction, manufacturing and industrial company Barr. He called on local authorities and, by extension, other public bodies, to seize the initiative and embark on bold experiments of their own rather than waiting for guidance from the Executive.

'We have 32 local authorities and many other public agencies in Scotland, and it would be gratifying to see more of them taking away the initiative from national government and working together,' he said.

Elsewhere in his speech, however, Rush expressed some trenchant views on the future of the Efficient Government programme in Scotland.

He argued that the public sector had much to learn from private companies when it came to the effective management of assets and resources, suggesting that senior private sector managers could make 'effective leaders of change' for the public sector.

They also had expertise in specific areas of the efficiency programme that the public sector could and should draw on, Rush said. 'The private sector has much in the way of experience in managing large-scale property portfolios from which the public sector can gain.

'For example, while not universally popular in the way that they do business, Tesco very efficiently manages, maintains, improves, rationalises and grows a substantial property asset.'

Rush also called for the focus on efficiency and reform to be used as the springboard for a root-and-branch re-evaluation of the role of Scottish public bodies as the stewards of frontline services.

'Government at national and local level should obviously retain the critical roles of funder and regulator of the services the public expect. But they need not always be the provider of services,' he said.

'To provoke debate, I have to ask the question – why should the public sector ever be the provider of services?'

In the discussion that followed, the audience wanted to know more about the potential risks and rewards of embracing reform.

Alistair Crichton, director of finance at North Lanarkshire council, asked whether 'local government would keep their savings', to provide a clear incentive for achieving them.

Parsons tried to reassure the audience on that point, saying that was 'very much how the programme is being taken forward'.

Lynn Brown, Glasgow City Council's director of finance, raised the question of whether people in the public sector had the same freedom as the private sector to take risks in order to overhaul their services.

'Is the tolerance of risk such that it's much more difficult for the public sector?' she asked.

In reply, Parsons said there was now a greater acceptance in the Executive that the kinds of reforms being demanded meant there was the potential for problems to arise.

But, she added, these could be mitigated by assessing them and planning for them systematically.

'We are saying now that as public service leaders we need to take more evidence-based, assessed risks in order to transform Scotland's public services. But they need to be the right decisions, for the right reasons, based on the right kind of evidence.'


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