By Suzannah.Brecknell

22 Jul 2010

In seeking savings, civil servants are being asked to work with people outside their department – and even outside government. Suzannah Brecknell reports on new research that suggests they’re not fully persuaded.

The good news for chancellor George Osborne is that most civil servants, according to a survey carried out by CSW and supported by outsourcing specialist Capita, believe departmental budgets can be cut without significantly affecting frontline services. The bad news – given his plan to cut most budgets by an average of 25 per cent – is that just eight per cent of respondents believe reductions of 20 per cent or over can be made.
The online survey asked civil servants to pick the types of change they believed were most likely to deliver savings without damaging services, and to indicate how much they thought departmental budgets could be cut if the changes were implemented. Of more than 1,400 respondents at grade 6 and above, five per cent believed cuts of 20-30 per cent could be made and three per cent opted for cuts of over 30 per cent. However, 13 per cent said no cuts could be made without affecting services. The most popular answer – given by 33 per cent of respondents – was 5-10 per cent savings.

Responding to the findings at Civil Service Live last week, cabinet secretary Gus O’Donnell said: “To state the obvious, we’re going to have to go much further than that [figure], so we have a real challenge. Either we’re going to have to be more radical, or we’re going to have to think: ‘Are there some things we’re doing now that we simply have to stop, and either get other people to do it or not be in that space at all?’”
O’Donnell’s answers to the challenge fit neatly into the coalition’s plans to move powers away from central government, encourage a variety of providers, and change government to focus mainly on commissioning rather than delivering services. The CSW survey offers mixed findings on the capacity of the civil service to think radically and work with other providers.

Respondents were asked what changes would yield the biggest savings without significantly affecting frontline or back office services. The top answers – reducing use of management consultants (56 per cent) and smarter procurement (35 per cent) – are widely supported, but hardly represent radical thinking.

However, Sir Gus pointed to the thousands of ideas submitted to the Treasury’s Spending Challenge website (see p3) as proof that the civil service can innovate. There is a need, he said, to remove blocks to new ideas and create “time and space” for creativity. “That in itself is a creative challenge,” he said. “People will put forward suggestions about ‘spend to save’ – that’s not the world we’re in. The deficit is at its worst now; we need to save to spend. One of the things we need to do is think about who has done this successfully in the past.”

The link between creating savings and learning from or working with other organisations was echoed in the CSWfindings: collaboration across government was named by 32 per cent as one of the best ways to create savings without affecting services. Simon Parker, lead author of an Institute for Government report, Shaping Up, which called for more joint working, a stronger centre of government, shared policymaking and pooled budgets across departments, says collaboration between departments is improving but imperfect. “The coalition has strengthened the centre to some extent but the other side we argued for, such as policy co-ordination, we haven’t seen yet,” says Parker, concluding that the jury remains out on whether the coalition government will succeed in improving cross-government working.

When it comes to encouraging more collaboration with other sectors, our survey suggests there is a long way to go before the civil service naturally looks outside central government for lessons and support. Only 18 per cent of respondents chose collaboration with local government as one of the best ways to achieve savings without affecting services. Working with private or voluntary sectors in the form of outsourcing was favoured by just two per cent for frontline services and two per cent for back office functions. Centralising back office functions – the intra-government alternative to outsourcing – was favoured by 14 per cent.

Most respondents said they had experience of working with central government departments (see figure 1) and this was also the most popular sector when respondents were asked to pick the type of organisation most likely to deliver both improvements to frontline services and savings (see figure 2). By contrast, less than half of respondents had experience of collaborating with each of the other sectors. Nine per cent of respondents had no experience of collaborating with any other sector.

Within these figures there was some variation according to how long respondents had worked in the civil service: civil servants with less than two years’ experience, for example, were more likely to see local authorities as able to deliver service improvements, and to believe the private sector is best placed to cut costs.

One explanation for the preference towards central government may simply be that civil servants have more levers over this sector, notes Parker. It could also stem from outdated views of other sectors. Take the voluntary sector, one of the least regarded in terms of both savings and improvements. It was associated with diversity, customer service and a good understanding of end users, but was also seen as inconsistent, having poor financial management and bad performance management.

Ralph Michell, head of policy at the Association for Chief Executives of Voluntary Organisations, describes these findings as “disappointing” and based on a “stereotypical view of the third sector as a bit amateur, doing things that are marginal and nice at the edges – not capable of taking on serious delivery challenges”. According to figures from the National Council for Voluntary Organisations (NCVO), the voluntary sector now employs 668,000 people and brings in £35.5bn. It has become a “serious economic force”, says Michell, but since most departments do little work with the third sector “it’s not a huge surprise [their view] is a bit dated”.

He adds that while many ministers do believe the third sector can deliver more for less, but “when it comes to shifting the juggernaut of the civil service and people working in the public sector, that conviction, that buy-in to the proposition, isn’t necessarily shared.”

There is, of course, the possibility that civil servants are right to be wary of over-reliance on outside organisations. Research by the NCVO found that there was no significant difference in outcomes between care homes and early-years providers in different sectors (though price points were not compared).

Civil servants do have some positive associations with other sectors: the private sector was seen as innovative, for example, while local authorities were associated with good customer services and understanding of end users. But if ministers are hoping to see a wider range of partners in shaping policy and delivering services, there is a pressing need to encourage and support joint working with the brightest and best outside central government.

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