Reflections on how to make public services more efficient and productive

The UK has an acute productivity problem. Our average output is 16% lower than the US, France and Germany, whilst employees in France and Germany work on average 2.5 and 1.8 hours less respectively, than their UK counterparts. This is a longstanding issue for the UK and one which needs addressing by any future Government.

Whoever forms the next Government, with an in-tray of considerable economic challenges and ever increasing demand for public services, it is clear significant investment alone will not be sufficient. They will need to grasp the nettle and make wholesale changes, committing to bold reforms regarding the way public sector organisations are run and in turn, how public services are delivered.

Having worked in five government departments, different areas of local government and the NHS, it is clear that the way the public sector operates is overly complex, convoluted and ultimately bureaucratic. Government department’s responsibility overflows into one another and other parts of the public sector, ultimately making even basic decisions about funding, communications or policy harder than it should be.

Of course, public organisations are accountable to government and thus appropriate controls and measures are required. However, there has to be a more proportionate way to enable public sector staff and leaders to be more productive. One way to do this is to empower decision-makers by simplifying organisational responsibilities and jurisdictions, whilst also making leaders more accountable.

Supporting public sector leaders, whilst making them more accountable

It is right that public servants have appropriate employment protection, but there is a distinct lack of effective performance management, which can often manifest itself into highly productive teams being waylaid by poor performers, who are difficult to move on from the organisation. Equally, there is a lack of appropriate support and training for managers, with the CMI estimating that fewer than one in five managers receive any management training before taking on a new job. Undoubtedly, the net effect results in reduced output and productivity.

This is not an issue that much of the private sector has to contend with. If we take accountability for example, if a senior leader fails to deliver key performance targets, or fails to manage a budget effectively, (notwithstanding mitigating outside influences that may have inhibited their ability to do so), there are consequences. This is not about being draconian, and it is certainly not about breaking with the public sector’s longstanding respect of employment rights. However, it is about moving the dial around the ramifications for failed delivery, persistent malpractice or consistent low standards.

The decisions made by individuals in public sector organisations have far-reaching consequences for the public. A poor service can have a profound impact on individual citizens’ lives or the population at large, whether it be in the sphere of education, health or housing. Not to mention the significant drain on precious public finances. In extremis, political leaders pay the price, but public sector leaders rarely do.

For any change to be made, there would need to be proper consideration and consultation. However, it is clear that the status quo of often ill-trained, overly burdened leaders, twinned in some cases by also not being up to the job itself, will result in public services not meeting the demands of the future.

Recognise cognitive difference and renumerate more flexibly

Leaving public sector leadership capabilities and accountability aside, more important are the fundamental organisational structures in place within the Civil Service and other public sector organisations, such as the NHS. It is clear that the more highly an individual is paid, the more responsibility that individual should have. This logic however fails when we consistently treat the cognitive abilities of people in the same way.

Take for example the tendency to increase renumeration with team size. A Specialist in say the Digital, Data and Technology (DDaT) profession or an Economic Analyst should be appropriately rewarded, with their pay being competitive when compared with other sectors. However, it should not be that by default their increased portfolio of tasks is accompanied by managing several other colleagues or even a number of teams. This is where we need more dexterity, allowing those professionals with certain skillsets to work in an agile and even independent fashion.

The current approach significantly impacts productivity, as teams are not appropriately led or managed because the person in charge may never have had an interest or skill in management, (or requisite training) but has ended up in that position due to organisational structures. This is not a symptom unique to the public sector and whilst some progress is being made through the DDaT framework relating to renumeration, progress is too slow.

Individuals should be remunerated appropriately based on output and skillset and in turn rewarded through pay progression in line with impact and targets, whilst being underpinned by a consistent public sector-wide performance management framework. Evidently, there is limited value in creating varied performance management structures across the public sector, the sector should better leverage its collective efforts to standardise best practice as highlighted by IPPR’s report, in order to improve performance and in parallel, productivity.

Creating a simpler environment to operate in

With more pressure placed on public services and a squeezed public purse, it’s more important than ever to short circuit the overly zealous ways decisions are made, and organisations are constructed. Take ‘approval’ routes to simply get a purchase order raised for example, a contract extended or a decision about recruitment endorsed. With teams from across the organisation(s) often needing to be engaged to make even simple, uncontroversial decisions. The net effect results in the delivery of services being delayed, costs being incurred or talent lost, which has a direct impact on productivity or lack thereof.

This is not to suggest we need to radically reduce the headcount of our expert policy officials or those on the frontline of service delivery, to the contrary. We need to harness the capability of whole team structures by providing an environment that more effectively enables decision-makers to manage upwards within their organisation and horizontally when collaborating with other parts of government, with a shared mutual objective of delivering a service or outcome for the public.

Yes, government and public services are complex, but it does not mean we need to persist with the status quo and it is certainly not an excuse for resisting the challenge of doing things differently and collaborating more effectively. More proportionate, lightweight checks and balances on decision making would suffice and help unleash many of the creative and innovative ideas needed to drive today’s public sector organisations.

I hope that reform is forthcoming for the way our public sector is structured in order to empower decision making, both more effectively at the right levels within organisations and locally through increasingly devolved decision-making. Evidently Integrated Care Boards (ICBs) in a health setting or Local Authorities know their population better than any Whitehall department. This principle is often discussed but inconsistently implemented.

Reflection(s)

It is key for any incoming government to address the productivity gap and a good place to start would be within the public sector itself. Just think about the potential that could be unlocked through a more agile way of working in an environment where decision makers were brought closer together, staff supported and trained to meet the capabilities of the future and equally performance managed more effectively. This would help ensure we have proper functioning public services that work for the public now and in the future, whilst undoubtedly being more cost effective. In the context of the economic environment the UK faces over the immediate to medium term and the evolution of new technologies, changes to the way public sector organisations are set up and run is not just desirable, but imperative.