The potential for savings in a cost conscious public sector

In this time of cost saving, there are a number of ‘big ticket’ savings taking place such as reorganisations and service changes. While these have their place, to make cost saving a reality also means considering the small things, seeking innovation and getting everyone involved in trimming the fat from every part of the organisation. It sounds easy in theory but we all know it is hard in practice. Unlike the private sector, public sector staff have no personal investment in saving money. There is no tangible knock-on effect of profligacy which, in the private sector can be seen in reduced profits, less capital for investment, lower salaries and bonuses and falling share prices. As a result, the enthusiasm for saving money is not there.

If, however, you can encourage staff to treat public money as if it was their own, to take ownership of the savings initiatives and to be cost conscious in every aspect of their working lives, the potential for savings are huge. If, however, you can encourage staff to treat public money as if it was their own, to take ownership of the savings initiatives and to be cost conscious in every aspect of their working lives, the potential for savings are huge.

Reducing duplication

In our working lives there are countless examples of where processes and equipment overlap – and it is particularly the case with technology where there is a ‘status’ implication as well. Thus, staff make the case for a Blackberry so that they are available while they are on the move (showing how busy and important they are). The case is a good one – mobile technology makes us more efficient – but the older, static technology is not removed. If anyone with a blackberry relinquished their land line, government could save millions across central departments alone.

Learning from the private sector

If the private sector is more motivated for these kinds of savings then they are a good place to look for ideas. Just like the public sector, they are making big changes – restructuring and re-engineering processes – but they are also refining what is left. For example, one firm we know of has reduced the amount of floor space it uses by using smaller desks and moving them close together. It makes for a more ‘cosy’ working environment and the savings are significant.

Realising the savings from the disposal of public agencies

As the ‘bonfire of the quangos’ shuts down a number of agencies and directorates across government, the risk is that additional costs will be incurred and savings diminished by a lack of specialist expertise and by the mind-set "so where should the work move to" – which simply relocates the costs from one place to another and, in many cases, into the hands of staff who are ill-equipped and unskilled. During the merger of a Connexions partnership with a Local Authority (LA), £710k was saved from the IT costs sought by LAs, and agreed by the Government Office by learning from experience and having and using the right people to challenge. Additional savings were delivered by integrating and merging services as well as being clear about what the offer was for young people.  

It is not an easy task, and there is a lot that needs to be done to make this a possibility but, you will agree, the potential for making savings is there to be had.

To learn how PA can help identify areas for additional savings in your department, please contact us now.