Anyone who has watched the news or read a newspaper in the past year or so will know that public sector spending has had to reduce dramatically. In fact, the 2010 Comprehensive Spending Review means that costs have to be cut by £81 billion by 2014-15.
The ways in which this is achieved – both at local and national level – are obvious: cut jobs, share services and so on. However, with around 310,000 jobs being lost and services shared between various different departments or councils, it is still expected that the services provided by all areas be up to a high standard. And with £243 billion of the £696.8 billion spent by Government in 2010-11 being on procurement, it is clear that this is an area that’s going to take a large hit.
So how will they make up this deficit? It has been suggested that one way to make services up to the standard the public expect is to outsource them to private companies, something that has worked well in other areas such as gyms and schools.
Innovation, Innovation, Innovation
However, The Work Foundation has suggested that the private sector taking over some areas is not enough. In their report Making the most of the public, they suggest that the Government should take a few lessons from private companies: innovation, best practice and fostering partnerships.
They say that the Government needs to know how to invest in innovation to manage intangible assets such as software and research and development and how to create arrangements that will lead to the co-development of innovative new products and services.
Basically, as far as The Work Foundation is concerned, the word of the day is innovation.
But what exactly do they class as innovation? According to the report: “Innovation represents the creation and application of new knowledge. In the private sector this can be easily understood as the commercialisation of a new product or services to meet a market demand, or the creation and implementation of processes which improve the productivity of existing activities. In this way innovation represents more than invention or discovery. It is a much broader concept which depends on the ability to derive value from an invention.”
What should the Government change… and can they change it?
It seems that the Government does spend a lot on intangible assets, including multiple research projects about all different areas encircling the public and private sectors. They also sell some of their knowledge, such as the electoral roll – surely that is being innovative?
Not innovative enough, apparently. It has been suggested that Public Private Partnerships, devolving powers and using IT for both front and back-end office operations are all ways in which the Government should improve.
Devolve power? Well, the new Scottish Government will be happy at least! But Public Private Partnerships have been in place since the days of John Major, and the Government has begun to work more and more on its IT systems lately, with the Ministry of Justice signing a £14 million cloud contract in March and the Scottish Government spending £270 million on a pan-public sector IT service framework contract. There you have it. Procurement on IT services – ticking the innovation and ‘using IT’ boxes nicely.
While spending on IT to improve communications and increase the innovation in the Government is all fine and dandy, it has to be remembered that cuts are to be made. At the Westminster eForum, it was suggested that it is not the IT that should be focused on, but using the IT efficiently. One suggested way was to work with network suppliers to develop common codes – an innovative process which can take up to four years.
What is the Government doing?
According to a report released on May 25 by the Lords Select Committee, the Government are to look for other changes which will lead to innovative procurement, economic growth and the translation of scientific research into innovative goods and services.
Lord Krebs, the Committee Chairman, said: “Too often, the public sector falls back on tried and tested solutions and new ideas are stifled by a culture of risk-aversion and overly burdensome procurement processes. We have uncovered a number of barriers to innovative thinking and we call on the Government to use their expertise to resolve them without delay.
“We look forward to hearing the Government’s ideas about how they can solve some of these problems and what methods have been put into place to embed innovation as a fundamental component in the procurement process. We will carry out a follow up inquiry in 12-18 months.”
Will this lead to a progressive change for the Government and the way they procure items? We’ll find out in 12 to 18 months…
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