5.1 Total spending on public services has seen unprecedented sustained growth over the past decade, with total public spending increasing by 42 per cent in real terms since 1997, spending on the National Health Service doubling in real terms and local government receiving real increases in government grants of 39 per cent between 1997 and 2007.
5.2 Alongside this investment in public services, there has been a renewed drive both towards devolution in the delivery of public services to the frontline and towards joining up the activities of different local service providers in order to address interconnected local issues and deliver cross-cutting outcomes. A wide range of partnership arrangements now exist across the local public sector, with Local Strategic Partnerships playing a leading role in enabling local public services to work together with local communities, businesses and the third sector to meet local needs.
5.3 Times, however, are changing - alongside the current challenging economic circumstances, governments around the world are facing an unprecedented range of complex issues. For example, one estimate suggests that by 2025 the cost of chronic disease is likely to have increased by 30 per cent to a minimum of £15.6 billion1 unless better ways of preventing coronary heart disease, strokes and diabetes are developed. In this new operating environment, vigorous efforts are required to ensure that the resources devoted to public services are rigorously prioritised and controlled, and that the best value for money is achieved from the way assets are managed.
5.4 However, such challenges demand an exceptional response. To tackle successfully the problems of the future, radical new solutions are required, which redesign or reshape public services; involve and liberate the potential of frontline staff and users to be at the heart of that process; and put the right incentives in place to encourage local initiative. While government has a role in driving improvements in quality and value for money from the centre, all public services need to be innovators, capable of reconstructing their offer so that it truly reflects user and citizen requirements and does so readily accepting that resources will be limited.
5.5 This strategic leadership role for government - providing direction, standards and vision without micro-management - alongside a focus on the role that public servants themselves can play in improving services, builds naturally on the Cabinet Office and HM Treasury's Excellence and Fairness agenda, and recent publication Working Together: public services on your side.2
________________________________________________________________________________________
1 Estimated costs to the UK Government according to The chronic disease burden - An analysis of health risks and health care usage, Cass Business School, October 2005 quoted in The Innovation Imperative: why radical innovation is needed to reinvent public services for the recession and beyond, NESTA, March 2009.
2 Working Together: Public services on your side, Cabinet Office, March 2009.