Posted on March 6, 2017 by Amyas Morse
I was privileged to speak to The Strand Group at King’s College London in early February on some of the elements needed for government to successfully implement major change programmes in complex, interconnected systems. The examples on which I focused were local, adult social care and NHS services in light of devolution, fiscal restraint and Brexit. After my talk, I was asked many interesting questions, some of which I would like to explore in more detail in this post. [See here for the video and transcript]
As I told The Strand Group, I am concerned about the combined impact of the ongoing drive to find greater efficiencies in local services alongside several major reforms being implemented concurrently, including devolution in local government and reforms to cope with an aging population in the health and social care sectors. It seems to me that joined-up decision-making and funding arrangements between connected systems – central government and local bodies for instance – are often missing, leading to service decline.
Both local government and the NHS are under pressure from central government to improve efficiency. Local councils have been subject to significant cost reductions. Prevented, legally, from going into deficit, local services have moved beyond achieving more with less to achieving less with less. This is demonstrated by what I call ‘deficit behaviours’, such as the invisible rationing of services and quiet drops in service quality.
The NHS has had additional funding, but also faces growing demands. Without a legal prohibition against going into deficit, Trust leaders – who were once ashamed by deficits – are now becoming increasingly stoic about their deleterious financial position. Their focus is now on maintaining service standards. Even there, the ‘leading indicator’ statistics such as A&E waiting times and ambulance response times are falling below agreed national standards.
Funding cuts to public services have been based on the assumption that there is slack in the system. In some places, there may still be (as my colleague discussed in Local service reform: is it all about the money?). Nevertheless, central government would be wise not to keep assuming that this is so.
After my presentation, I was asked how local councils and the health sector should ensure that central government understands the pressures on their ability to deliver services, and how central government can identify the right early warning signs of unacceptable pressure on those services.
The NAO has produced many reports over recent years on financial and service sustainability. Equally, there is plenty of evidence from NHS England and other sector leaders about the pressure they are experiencing. As a result, there has been much coverage of the pressure on the healthcare and social care systems and other local services. I suspect that the education sector may be the next to experience such severe pressures, as schools have to make £3 billion in efficiency savings by 2020 while pupil numbers are increasing and the condition of the ageing schools estate deteriorates [see our reports Financial sustainability of schools and Capital funding for schools]. In short, access to evidence does not appear to be the problem.
From my unique perspective of looking across government, I think there are several issues.
First, it is time for a debate about the level and quality of services for which people are prepared to pay. I; you; all citizens depend on those services, so there has to be some way we can say when the service decline is too great; when the rationing of services is no longer acceptable.
Secondly, there needs to be greater focus on applying evidence and identifying early warning signs. Too often central government has been slow to adjust – acting only when serious failure occurs. Perhaps most importantly, decision-making should be rooted in evidence, and I have not seen many credible evidence-based efforts to reconcile central funding to local needs.
Thirdly, there needs to be intelligent dialog between central government and delivery bodies about what efficiencies are achievable. Greater sharing of good practice and evidence would help find a more sustainable path to that more efficient future.
Finally, many central government decision-makers are looking only at their own piece of the jigsaw and making their own decisions about which pressure will be the focus of their attention. All of us need to get out of our silos, understand the complex, interlocking reform environment, recognise negative trends and be ready to shift quickly should there be warning signs. To achieve this, more needs to be done to incentivise the pursuit of efficiencies across organisational boundaries.
I am in favour of efficiency savings. However, I do think we need to think very carefully about the long-term effects of continuously requiring spending cuts. This is particularly true when it is a department requiring savings from those operating outside the department’s immediate boundary, without necessarily understanding their effect.
I was also asked to talk more about devolution. I think it is quite possible that Brexit will be such a focus for government that the momentum for devolution will slow. Brexit is likely to divert senior talent time and attention in quite a number of departments.
Moreover, perhaps the ‘Manchester Model’ is more specific to the unique Manchester circumstances than appears to be recognised. As with spending cuts, no single approach works indiscriminately. If devolution is to continue there will need to be, again, careful dialogue, flexible planning and a focus on the big picture, not just disconnected pieces of the jigsaw.
As I’ve said in previous blog-posts, a key part of our mission at the NAO is to help government improve public services. We will continue to provide evidence and early warning signs of strain in local public bodies to help government make the right decisions in a complex landscape.
I welcome your comments and invite you to contact us if you would like to discuss any issues.
You can read here the full transcript of Amyas Morse’s speech and video of his speech and the question and answer session.
About the author: Amyas Morse, Comptroller and Auditor General. Amyas has been head of the NAO since 2009, before which he was a global partner with PricewaterhouseCoopers and Commercial Director at the Ministry of Defence. He has served on a range of cross-government Boards and Groups.
Posted on February 10, 2017 by Emma Willson
Cost savings failing to materialise. Customers hit with poor service and financial losses from public services. Contracts disputed and terminated. Contracts can go badly wrong before they even begin if the set up and management aren’t right. Since launching Commercial and contract management: insights and emerging best practice we’ve reported on three contracts that have enjoyed varying degrees of success. As part of our series to share insights into best practice contracting, in this blog-post we explore lessons from these three contracts. more… Setting up successful contracts
Posted on January 27, 2017 by Tom Tyson
Have you been ‘nudged’ into a workplace pension? Feel up to speed with changes to the state pension? Confident you’ll have a comfortable retirement? Worried there’ll be more changes – to your pension schemes and/or pension age? Do you understand who does what in the world of pensions? With pension reforms shifting responsibility for retirement planning to individuals and away from the state, to provide clarity, we’ve just launched a Pensions Landscape site to explain who does what in this complex landscape and the key challenges facing the government. more… Navigating a changing pensions landscape
Posted on January 23, 2017 by Charles Nancarrow
Scams, unfair trading, e-crime, unsafe goods – these harmed consumers to the tune of £14.8 billion in 2014-15. And that’s just the estimate of the problems tackled by consumer protection bodies; you may not even be aware of times you’ve been a victim of unfair trading. With poor consumer awareness and threats to consumers becoming increasingly complex and wide-ranging we, the Regulation, Consumers and Competition team, recently published a report. We describe here the types of consumer detriment, who’s responsible for protecting consumers, and what all this means for consumers. more… Do you feel protected as a consumer?
Posted on January 12, 2017 by David Goldsworthy
After 22 years with the NAO, David Goldsworthy, Head of International Relations and Technical Co operation is retiring. David has led a team which has delivered around 100 projects in more than 50 countries over the last 17 years. He looks back over how the world of audit has changed and reveals some of his personal highlights.
more… Dedicated to strengthening international auditing
Posted on January 6, 2017 by Sarah Perryman
Management theory is full of good advice, but how should it be put into practice? How can we harness the lessons gleaned from across government and adapt them to the delivery of a specific service? I’ve applied the principles set out in our good practice guide, Managing business operations, to child protection services. Drawing on our recent report, I’ve looked at what’s happening in practice, where there’s good practice be shared and how the centre is taking a lead. Using our identified four characteristics of success, I’ve set out questions professionals should be asking themselves to help improve services. more… Putting children first: Making theory work in practice
Tagged: Accountability, Business operations, Children, Cross-government, Customer service, Good practice principles, Information management, Leadership, Local government, Police, Process management, Risk management, Young people
Posted on December 21, 2016 by Antonia Gracie
Helping Mozambique address its huge post-war challenges … the launch of a new book on the NAO’s 900 year history … a framework to help the UK government oversee the £734 billion of taxpayers’ money spent each year. The common thread is improved Parliamentary oversight and accountability. This aim is at the heart of the NAO’s role and therefore of the new book by former Assistant Auditor General, David Dewar; it was the subject of my presentation at the Houses of Parliament to a Mozambican delegation; and it has been a key theme of my work in our cross-government team this year. more… Ensuring Government delivers: an international and 900 year viewpoint
Posted on December 16, 2016 by Mathew Power
Care leavers happy with their accommodation, aware of their entitlements, feeling they have access to education or employment and that they’re listened to and helped to achieve their aims and aspirations. This is not just a vision of success, it’s the finding of Ofsted’s review of Trafford’s services. However, Trafford is one of only three local authorities out of 103 inspected and judged to be ‘outstanding’. Why? Often the answer can be found by consulting care leavers themselves. more… Care leavers: engaging for solutions
Posted on December 12, 2016 by Jeremy Lonsdale
The UK’s biggest ever aircraft carrier, the nuclear deterrent… behind the large and expensive defence programmes that we hear about are people. People who need suitable work environments and a home – and that means buildings. The built estate is a vital part of our defence capability. Yet the Ministry of Defence (MOD) faces a shortfall of at least £8.5 billion of funding over the next 30 years just to bring its buildings up to a good standard of condition. And that doesn’t include the homes for service families, many of which have been a cause of growing dissatisfaction. With housing crucial to morale and staff retention, there’s considerable interest in ensuring our service personnel are satisfied with their homes. So what is the current state of the MoD’s buildings and what are the lessons for other organisations managing large property estates? more… Our defence estate – right size, right condition, right price?
Posted on December 6, 2016 by Amyas Morse
I was delighted once again to be a judge for the Civil Service Awards. The awards aim to showcase best practice across the civil service, including inspirational leaders, excellent use of evidence, effective transformation, great skills development, committed customer focus, straightforward communication, and clear, practical and collaborative approaches to driving growth. In this blog-post I want to highlight some of winners and their successes. more… Award winners’ secrets