KPMG: “Strategic transformation” a necessity for UK public sector

The report, "Tough Choices Ahead: The Future of the Public Sector" are based on in-depth interviews with public sector leaders from six countries, and follows the publication of KPMG’s 2009 global public sector survey. Over 120 senior executives from across the UK, USA, Australia, Germany, Canada, and The Netherlands, took part in the survey, the results of which suggested UK public sector organisations are much slower than those in other countries in making the radical changes needed to cope with the financial crisis.

 

The Tough Choices Ahead report has subsequently recommended a three-stage plan to transform the UK’s public sector.

 

A determined programme of cutting expenses, reducing staff costs and delaying major projects that will deliver fast results but is insufficient in the long-term

 

Improving the financial management of public organisations, sharing resources and services which will deliver fairly fast results and lay foundations for stage three

 

Finding new sources of funding as well as involving the private sector in funding the delivery of public services in order to achieve public service transformation and to embark on the route to recovery. 

 

"At the moment there is a lot of focus on short-term measures to tackle the budget deficit such as cutting costs and delaying major projects,” commented Alan Downey, head of public sector at KPMG. “But we must start to consider the long-term effects of the economic downturn on the public sector. By now it should be clear to everyone that the financial pressure which is coming along in the public sector cannot be faced with the traditional cost-cutting and efficiency programmes. The public ‘sector protracted downturn does not require the same immediate response as that of the private sector but a long-term strategy that is seeking fundamental change."

 

KPMG’s report has also pointed out some of the medium to long-term challenges facing in the public sector, including ageing populations and a diminishing pool of civil servants. "Redesigning the role of the public sector will involve some devolution of responsibility from the government to the individual. It will also require a fundamental shift in the collective mindset of the electorate,” Downey added.

 

“With the electorate arguably prepared like never before to engage in the hard debates about transformational change, politicians and senior servants have an obligation to present the facts and exhibit strong leadership to help define the right strategies and make the right decisions for the future."