20 February 2009
By Graham Clews
The long-term effect of the economic downturn on the public sector will be to focus attention on cost-cutting, warned the Treasury’s director of public services.
Helen Bailey said that while government projects were being brought forward to kick-start the UK economy in the short and medium term, public borrowing will ultimately have to be brought in check.
The current target for public sector savings is £5bn in 2010/11, although the figure could well change when this year’s Budget is revealed, she said.
The Treasury was ‘asking big questions’ about savings through programmes such as the NHS’s World Class Commissioning strategy and in areas such as collaborative procurement, asset management and back-office operations.
But Bailey, formerly chief executive of the London Borough of Islington, said: ‘The real challenge is to change the way you think about public services to get real bang for your buck, rather than just shaving bits off your budgets.’
She said the public sector had to consider how to provide better services when funding stayed at the same level, or even fell slightly.
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