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(for complete Kable report: www.kablenet.com/kablereport)

press contact:
Giles White, 07775 686919
gwpr@btinternet.com


12 July 2004


GERSHON AND THE GOVERNMENT SPENDING REVIEW: WHAT PUBLIC SERVANTS THINK

Gordon Brown’s soon to be announced spending review will rely heavily on the proposals for an overhaul of the Civil Service contained in Sir Peter Gershon’s efficiency review.

Given that the review is said to have identified ways and means of saving up to £20 billion – money which Labour would dearly love to promise to front-line services in advance of the next election – it’s not surprising that ‘Gershon’ has been embraced by the Treasury.

That it could involve a cull of 80,000 civil servants means that other interested parties are less enthusiastic.

But – how do these proposed reforms strike those who will have to deliver? Research by Kable – Europe's leading independent authority on e-government and public service IT and telecoms markets (www.kablenet.com) – supported by HP, explored public servants’ views on three pillars of the Gershon agenda: the sharing of back-office services; consolidating procurement; and transactional processes.

Kable carried out in-depth, off-the-record interviews with 40 senior public servants, and two online surveys. The conclusions, published in a report – ‘What do they mean by "yes"? What public servants make of shared services and the Gershon agenda’ – find widespread agreement that significant savings are possible, but scepticism that the review will benefit customers.

For example, Kable asked:

Q: Could your organisation achieve a 5% cut in administration costs by 2008?

A: 71% said, ‘yes’.

Q: Do you agree that in the long-term, efficiency policy will improve the UK’s public services?

A: 38% said ‘no’. 29% said ‘yes’.

Q: Should government organisations move toward more consolidated/shared services?

A: 90% said ‘yes’.

Q: How much of the data your department collects is unique?

A: Over 50% of respondents said that at least half the data they collect is duplicated by other departments.

“Everyone agrees that the cost of delivering public services should be cut, and virtually everyone agrees that the cost can be cut,” says William Heath, Kable chairman. “What really matters is delivering better service to the public though. A process that takes public servants through the trauma of change has to be, and be seen to be, first and foremost about making public services efficient for the user.”

Rob Watt, business development director, public sector, for HP, added: “The vision of shared services is going to happen – the potential cost savings are too great to ignore, as are the benefits to the customer, if it is done well. People and processes are the primary agents of change – if they are willing, motivated and inspired, the technology is available and capable.”

The report contains extracts from interviews with senior civil servants, case studies of successful and unsuccessful efficiency projects, and poses important questions that senior civil servants – talking off the record – say must be addressed if the efficiency gains on which the spending review is dependent are to be achieved.

These range from:
- whether civil liberties groups will countenance the possibility of a single profile with which citizens interface with the state;
- internal rivalries and mistrust between government departments;
- whether the efficiencies will simply shift the workload on to the ‘customer’;
- the implications for local economies, many of which depend on local purchasing by public authorities, of hyper-efficient (ie centralised and aggregated) procurement.

The report concludes with a wide range of examples of ‘next steps’ to drive the efficiency vision forward.

- ends -

REPORT EXTRACTS & EDITOR’S NOTES FOLLOW

WHAT PUBLIC SERVANTS MAKE OF SHARED SERVICES & THE GERSHON AGENDA:

The following quotes may be published, subject to the following attribution: ‘a senior public sector executive, responding to an independent survey by Kable, said: ‘quote’

“I’m very enthusiastic about the (Gershon) diagnosis, which is very well founded.”

“It (Gershon review of efficiency) is the first time we’ve had such quality of information”

“(the Gershon review is) at least five years’ overdue.”

“In my experience, there are opportunities for 40-50 per cent gains by introducing ‘lean’ processes in specific areas, and 10-20 per cent efficiency gains through IT.”

“There is huge overlap everywhere (in central government). Whitehall is completely unable to cost anything - phone calls, web, e-government, forms. No data is better than wrong data, seems to be the attitude.”

“If you were starting from scratch, you wouldn’t do it with each department having its own HR and finance, and hundreds of different IT systems all over Whitehall, would you?”

“In the digital era there is tremendous potential for virtual recentralisation, putting things together in a sensitive way and moving people to e-delivery. But it’s hard to see how you can do it with today’s fragmented set-up, where the Cabinet Office, Delivery Unit, ODPM, HMT and separate departments all have their own remit and turf”

“Central government needs customer relationship management desperately. ODPM has five different email addresses for the chief executive of one Council, no idea what its key issues are, what the most recent correspondence is, or who has spoken to whom.”

“I don’t think anything fundamental will come out of the review. There are the changing priorities of politicians on one hand and the dead hand of the Civil Service on the other – and neither of them know anything about management”

“It’s about leadership and vision to transform the way things get done (in the public services); technology is secondary”

“We’ve all been driven mad by central government preaching at teachers, doctors, police and local government what to do. It needs to put its own house in order and practice what it preaches to others. It’s a virtue of Gershon that it says that fairly and squarely.”

“You won’t get effective e-government by giving everyone a bit of money to write a strategy. That’s ludicrous – it should be financed by taking costs out.”

“(e-government) is just a new door into the shop – it doesn’t in itself mean what you can buy there is better.

“Unless you migrate customers to it (e-government), you’re just adding another expensive channel.”


FACTS, drawn from the Kable report, ‘What do they mean by ‘Yes’?’

Public expenditure on administration.

- By 2005/06 government will be spending £320bn on public services (of which £70bn directly, and £250bn through local bodies in health, education, policing and local government).
- Administrative spend by Whitehall is £21.3bn.
- Since 1997, civil-service employment has increased by more than 55,000.
- Although taxpayers assess themselves, the Inland Revenue still employs 78,000 permanent staff.
- Government currently spends £11.5bn a year and employs 250,000 people in administering taxes and benefits.


Efficient public services?

- 300 local authorities collect council tax.
- 400 local authorities process housing benefit.
- Over the public sector as a whole there are approximately 30,000 back-offices.
- There are 250 separate remuneration systems in operation in central government alone.
- There are believed to be 67 different streams of finance for local government.
- There are approximately 34,000 public purchasing bodies.


Regulation

- Gershon estimates that the total cost of regulating the public sectors alone is £8bn, with a further £7bn of public money spent on regulating the private sector.
- The NHS is subject to 40 regulators – each demanding its own forms, data gathering, and using its own systems.

ICT

- The public sector ICT market is set to grow to £16bn by 2006 – a 72% increase since 2001-02.
- The NHS NpfIT (National Programme for IT) project involves 270 health trusts, 18,000 sites and 58,000 doctors.


The efficiency review

- The efficiency review aims to make annual savings of up to £20bn by 2007, and reduce the running costs of central government by 16%.


EDITOR’S NOTES

For the complete Kable report: www.kablenet.com/kablereport

or email: gwpr@btinternet.com with the subject heading KABLE REPORT

Contacts:

Kable: Chairman, William Heath, 07973 115024, william.heath@kablenet.com
Media contact: Giles White, 07775 686919, gwpr@btinternet.com
HP: Matt Campbell, 020 7853 237, matt.campbell@porternovelli.co.uk

Profiles:

Simon Caulkin, author of the Kable report: ‘What do they mean by "yes"? What public servants make of shared services and the Gershon agenda’, is former editor of Management Today. He writes on management, business and a wide range of other subjects for publications including the Observer and the Guardian, the Economist and the New Statesman.

William Heath is co-founder and chairman of Kable Ltd, www.kablenet.com, Europe's leading public sector IT research and publishing company.



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