The forthcoming Autumn Statement and Scottish Government Budget has inspired another round of calls for public service reform. Primarily wishful thinking as a substitute for public spending cuts, but the principle has merit.
The Chancellor appears to have some leeway in the Autumn Statement, although he wants to splash some of it on an Inheritance Tax cut that would benefit the wealthiest in society. This may shore up support for his boss on the back benches, but the politics are awful, particularly if it comes with benefits cuts for the most disadvantaged.
Audit Scotland has given a stark warning to the Scottish Government in its annual audit of their accounts;
“The delivery of public services in their current form is not affordable, with inflationary pressures and public sector pay settlements having a significant impact. The Scottish Government must work with partners to develop a programme of public service reform, including workforce redesign, which balances the short-term financial pressures with the need for longer-term change, recognising that this may require financial investment.”
The Auditor was not alone in highlighting poor spending decisions. The ferry fiasco inevitably tops the list, with the latest final cost estimate approaching £600m. Then there is more than £50m on the BiFab fabrication yard, £52m on Prestwick Airport, £135m on the Lochaber smelter, up to £80m on the Rangers prosecution, and several IT projects. A less well-known example is the Shared Services Project. Many of us have been sceptical about the benefits of this approach in principle, but as predicted, costs have steadily risen. I'll believe the projected savings when they have been delivered!
While Tory MSPs regularly raise these issues in the Scottish parliament, they are less comfortable facing up to their own party’s record at Westminster. Nearly £100billion of taxpayers’ cash has been wasted, an average of £25billion every year since the 2019 election. The Best for Britain group’s chief executive, Naomi Smith, said: "The notion the Tories are safe with money has been blown out of the water. It's disgraceful the Government continues to squander public money while so many struggle to feed their families and heat their homes.”
The Scottish Government frequently references the National Performance Framework. However, as the Auditor also highlighted in his report, “I am concerned by the number of indicators not being reported five years after the first National Outcomes were agreed and it remains difficult to monitor the impact of policy and spending decisions on performance.” This is common, with initiatives launched under a blaze of publicity, only to quietly be lost as ministers move on to the next shiny announcement. I highlighted some of this in my recent report on Fair Work, and the Scottish Business Pledge is another good example of this process.
And before anyone tells me that the solution is private sector expertise. Let us remember that many of these projects involved private sector management consultants and big accountancy firms. Elon Musk has lost $41billion in just the last two weeks!
If we want to get serious about public service reform, let’s not forget that the template was set down by the Christie Commission 12 years ago. I was an expert advisor to that Commission, which showed how Scotland's public services require comprehensive reform by empowering communities, integrating service provision, preventing adverse social outcomes and becoming more efficient. The analysis in the report turned out to be pretty accurate. Sadly, too few of the recommendations have been implemented.
Five years after Christie, I wrote a paper for the Reid Foundation on public service reform. This built on the Christie principles with a call to build integrated public services around recognisable communities, based on the principle of subsidiarity with service delivery at the lowest practical level. Proposals like shared services, the National Care Service and others show that the cult of centralisation still pervades government thinking. Preventative spending that could cut the demand costs on public services by up to 40% remains largely ignored. That report and Christie highlighted the importance of proper workforce planning and a staffing framework. This is a point again highlighted recently by Audit Scotland.
Sadly, time and time again, these fundamental lessons are not learned. Public service reform is wheeled out as a solution during a financial crisis, just when the necessary investment is unavailable. There are only three years to go before I write my regular five-year blog on implementing the Christie Commission report. I suspect cut and paste will do the job yet again!