Jane Dudman

Efficiency savings: the corrosive impact on public services

Jane Dudman

Guardian Professional, Friday 10 August 2012 08.00 BST

What links prisoners being paid £3 a day to work in a call centre with the abuse at Winterbourne View care home? Or, to put the question a different way, why does the government fail to see the link between its "efficiency savings" and a steadily growing stream of stories about failings in public services?

Since it came into power in 2010, the government has stuck like glue to the mantra that it can cut back-office spending without harming frontline services. Cabinet Office minister Francis Maude repeated that again on Thursday, when he announced savings of £5.5bn last year across Whitehall and said that by the end of this parliamentary session, he wants to ratchet up those savings to £20bn a year.

Leaving aside, for now, intense discussion about whether the figures announced by the Cabinet Office really are efficiency savings, or are merely cuts to inputs, as Professor Colin Talbot, professor of government and public administration at Manchester Business School, has argued, Maude did at least have the grace to say that quadrupling this year's savings "won't be easy" and that his spending controls "haven't always been popular across Whitehall". You can say that again. But the government's leading axeman and his team at the efficiency and reform group continue to maintain that cuts to back-office service don't harm frontline services. Quite the reverse – they frame the savings in frontline terms, by saying that, for instance, they are the equivalent of the salaries of 250,000 junior nurses.

Who, then, would argue with the idea of cutting IT contracts, property, marketing, temporary staff and consultancy, to pay the salaries of nurses? Anyone presenting an argument against "efficiency savings" is seen as the equivalent of a turkey calling for the abolition of Christmas.

But as all those involved in public services already know, it is virtually meaningless to distinguish between frontline and back-office services. If we learn only one thing from the Olympics, it's the importance of everyone working together as a team. Yes, there's a person out at the front, but they can't do the job on their own.

Meanwhile, the impact of this relentless drive for savings has been demonstrated by disturbing examples recently from very different public services.

The damning serious case review, published on 7 August, into abuse at the Winterbourne View care home has shocking detail about abuse at the home and the failure, once again, of different public authorities, including police, regulators and the NHS, to join up the warning signs of poor care and abuse.

That failure may, in itself, not be directly connected with budget cuts, but as public policy commentator Richard Vize notes, it has pertinent lessons for the reform of public services and the government's ceaseless push to outsource services. "The purchaser/provider split is intended to promote quality, drive up standards and ensure the interests of the patient are championed," he writes. "But the scandal at Winterbourne View hospital demonstrates how far commissioning still has to travel before it meets its objective... One of the key tests of the reforms needs to be the extent to which commissioning reaches new levels of engagement with providers. It is difficult to see how that will be achieved by such lean operations."

And what, if not a drive for "efficiency" could lie behind the hiring of prisoners to work in a Cardiff call centre at a rate of 40p an hour? Regarded as a purely market-driven proposition, that may well be an efficient way to provide services. It is horribly easy to apply the logic of the market to public services. The government takes the view that public services suffer from inertia; bring in new entrants, give them autonomy over staff terms and conditions, and innovation will flow.

But as Ruth Thorlby, senior fellow at the Nuffield Trust, points out, there is little to demonstrate that private providers are much more efficient or high quality than their NHS counterparts and there are only a limited number of healthcare processes to which a pared-down, production-line approach can apply.

Back in the real, complex world of providing public services, public authorities have responsibilities over and above simply cutting staff costs to the bone.

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