- Politicians of all parties agree that public services face a financial crisis. Many users argue that they also face a crisis of effectiveness.
The UK’s public finances are in a poor state. This year, we face a budget deficit of £175 billion, or 12.4% of GDP. This structural deficit is not simply going to go away: the Treasury’s latest estimate is that £140 billion of that deficit is ‘persistent’ and will not be eliminated without measures to supplement the economic upswing expected from 2010[1]. Politicians from left and right acknowledge that this means a financial crunch for public services over the next five to ten years.
At the same time, both policymakers and the staff and users of public services agree that there is still a need for further improvement – especially in delivering more effective, responsive and personalised services. This is despite important improvements in some areas, and decades of performance management, targets, new institutional forms and new funding models.
There are three basic responses to the need to reduce spending, as summarised below; only the last – radical efficiency – meets this need and improves outcomes at the same time. Continue reading
