Success Marred by What Ifs
In 2004, the Government set out the Gershon Review which outlined a need for all Government bodies to cut their operating costs by 2.8% by 2008 – a saving of £20bn. Over the last four years, this has been the driving force for IT investment in local government with the aim of improving efficiency and standards of service provision. The ultimate aim being to redirect the savings made directly to public services.
Problem Areas Identified
- Complex and disparate systems
- Heavy reliance on paper documents
- Cross departmental data entry
- Errors leading to duplicate payments
- Labour intensive manual checking/processing
- Expensive use of recovery auditors
- Adoption of Shared Service Centres
- Automation of invoice and accounting processing
- Automated invoice reconciliation functions
- Automated Duplicate Payment Software
By adopting the use of inter-departmental Shared Service Centres (SSCs) and further automated technology, many public sector bodies hoped that they would be able to reach the Government targeted savings by the end of 2008, while providing lasting departmental efficiency.
So what’s been achieved?
In a world where many targets are seen as no more than pie in the sky aspirations, the Gershon Review is that rare breed – an over achiever! The latest calculations show a saving of £23bn. However, while this is indeed something to celebrate, the success story masks some of the realities.
Firstly, the drive for change wasn’t received with open arms by everyone. More importantly however, the inconsistencies between Government rhetoric and the reality sometimes generated a Catch 22 situation. How can a local authority improve services and invest in new IT functionality when already lean funding structures are slashed further?
This has meant that the resulting change so far has been piecemeal. However, given the savings already made by this approach, it would appear that if greater drive, cohesion and financial support had been pushed behind the Gershon Review, it could have achieved remarkable results and formed a solid foundation from which to grow.
Gershon II is looking at making a saving of £5bn over the next year – a realistic figure given that by their very nature, Government bodies do not have much fat to trim. Therefore, savings from now on will have to be more creative and achieved through a through analysis of existing systems. However, perhaps the most difficult obstacle to overcome seems to be cultural rather than technical. Many Government bodies operate in vastly different ways and are resistant to giving up any element of control or self-determination. In part this is due to a misunderstanding of automation and what SSCs are and how they can help. Where there is ignorance – a culture of suspicion and resistance is likely to grow. In addition, attempting to forge on with a one size fits all approach to SSCs simply will not work in organisations as disparate and multi-functional as the NHS or local authorities. One example of this is the NHS SBS, an initiative which has so far struggled to get going and one which has failed to capture the imagination of the NHS as a whole.
The Way from Here
More government support for shared-service infrastructures is needed. Furthermore, further training and education of the different types of SSCs and automation functions, needs to be given, together with an indication of what can be achieved by their adoption. Instilling a sense of responsibility and implementing accountability measures take time, but it is also important for Gershon II to focus on an as yet untapped area of improvement. E-procurement is perhaps the next big step. This is a fully integrated system that feeds into financial analytics. The key here is that while savings can be made through an integrated system, the processes that have to be re-worked to ensure the system works efficiently will create clearer lines of responsibility and therefore increase accountability.