In order to have an informed discussion on the impact of the CSR on the public sector, it is firstly important to establish the facts.
Peter Smith, director of public sector consulting at Hay Group, today identifies five reality checks to enable an informed debate.
Fact 1. The publicity around the Comprehensive Spending Review gave an impression of a 25% cut throughout most of the public sector. In fact, the average cut in revenue spending is 8.3% in real terms over four years.
Fact 2. The way reductions are spread gives the impression that they will be phased in. In practice, organisations have to work out early on how to make these reductions and act quickly and decisively to change services and cut costs. The impact may be far sharper than imagined.
Fact 3. We have been told that the NHS has been ring fenced. In practice, it has to find savings of £20 billion. The false impression that the NHS is protected could be damaging: local authorities may draw back from joint initiatives on health and social care, leaving it to the NHS to foot the bill.
Fact 4. Some announcements have suggested that most or all of the cuts will be made by natural wastage (not replacing people who leave) and by early retirement. In practice, the only sensible approach is to specify the future structure and jobs and keep the people who are best suited to the work.
Fact 5. There is a feeling that this is the public sector recession. What is certain is that there will also be an impact on the private sector. Reductions in programme spending and a 29% cut in capital spending over four years will ensure this is so.
Peter says: "The debate is in danger of being clouded by misconception. It will be hard for the public sector to make the necessary changes, so it is vital to start with a clear understanding and vision".
To read more about Hay Group’s free resources to help the public sector, including advice on managing through uncertainty, visit The BIG squeeze
