Budget 2008 announced that the Government would take action, through the Operational Efficiency Programme, to ensure that future efforts to drive efficiency in the public services kept pace with developments in the private sector. Five private and public sector leaders with relevant expertise were appointed to advise the Operational Efficiency Programme and examine five key areas of operational expenditure in the public sector:
• back office operations and IT, led by Dr Martin Read;
• collaborative procurement, led by Martin Jay;
• asset management and sales, led by Gerry Grimstone;
• property, led by Lord Carter of Coles; and
• local incentives and empowerment, led by Sir Michael Bichard.
The scope of the programme is to draw conclusions which should apply across all public organisations within the wider public sector: central government and its agencies and non-departmental public bodies (NDPBs); and delivery bodies e.g. local government, the NHS, police and schools.1
The advisors have recognised the progress that has been made on operational efficiency throughout the public sector, but by engaging with a wide range of stakeholders including government departments and agencies, consultancies, think tanks, subject specialists and public service staff throughout the delivery system, they have identified significant opportunities that remain to be seized.
Core to achieving these opportunities, is making sure that services are run and decisions are taken at the most appropriate, efficient and effective level. Especially when resources are limited, there are undoubted benefits in providing the flexibility to tailor services according to citizen needs at the most appropriate local level.
Equally, purchasing common goods or delivering low cost, high quality back office operations are goals all services share. These goals become more achievable when the public sector harnesses the economies of scale that it can achieve when it acts as a whole, and uses the professional operational capacity it has built, freeing local managers to concentrate on delivering high-quality services to the citizen. Devolving services does not mean that government should devolve choices on every operational function or excuse operational inefficiency.
The complex and evolving challenges that government faces means it should continuously review the data that all public sector organisations are asked to collect to ensure its usefulness and guarantee that excessive burdens are not being placed on those who are asked to provide it. There is a strong signal that, to meet current challenges, management information relating to operational efficiency needs to be improved. This should not equate to a central data-gathering exercise, or the imposition of excessive new burdens, but rather a framework for individual organisations to compare their performance in a transparent way, allowing managers to manage and ultimately achieve better value for money.
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1 In this document, 'central government' refers to government departments, agencies and NDPBs, while 'wider public sector' also includes local delivery bodies such as local government, the NHS, police services and schools. 'Public sector' refers to both central government and the wider public sector.