· 2 min read · Features

The public sector has to change


It isn't just the scale of public-sector expenditure that has to change but how money is spent.

We are now roughly six months away from a general election and manifestos are being drawn up which, if party leaders are to be believed, will focus on reducing the national debt and putting our national finances on a sustainable footing.

The consequences will force the public sector to set out on programmes of significant change as the parties announce their plans about how they will address the gap left between income and currently planned activity.

We at Henley believe developing management capability is a key driver in the creation of wealth. It is this wealth, after all, that will keep our public services going as well as help contribute to our private wellbeing.

But first and foremost we have to understand that, uncomfortable as it may be to some in our sector, without the market succeeding we are all doomed to fail. I say this not because I am worried that those wishing to lead us after a general election doubt this proposition but because I am worried some of the leaders in the public sector have clearly rejected it and the potential for conflict instead of necessary change is rising.

Public-sector worker representatives have to accept the equally important goal of avoiding the economic consequences of sustained public expenditure. Like it or not, government expenditure has to be reduced if we are to come out of the recession in a strong economic position.

The preferred solution of a significantly higher burden of taxation will not deliver a more balanced budget. Crippling the creators of the wealth, from which we hope to benefit in the future, with higher taxation at a personal and corporate level for any longer than is absolutely required for stabilising the economy, will just put off the day when receipts from taxation will flow back into continuing the improvement in public service provision.

Despite the comments of the Conservative-leaning press, the folly of the past 12 years of Labour Government is not that they decided to invest our wealth into the UK's public service infrastructure but that they failed to realise how critical they needed to be of public-sector management's plans for the focus of that investment.

In the past 10 years public expenditure has doubled to over £600 billion a year and leaders in the sector would be foolish to argue this has led to a subsequent doubling of public-service performance. We know that some of it has been wasted on management and management reorganisations, on targets and testing regimes that meet the needs of politicians and no one else, on IT projects that promised the world and cost it instead and on increases in public-sector pay with little to show in improved productivity or capabilities.

While some of this is directly linked to a political agenda (for example, Labour's obsession with ID cards), much of it can be put down to failings of management and leadership from within the public sector itself. All of us who work in the sector, or in publicly-funded organisations, can point to pointless expenditure, created by a risk reduction agenda designed to protect us from any potential litigation - however remote from reality - and to layers of management and review that chops up forests of paper while adding no value to the quality and reliability of what we do.

What has to change isn't just the size of our public expenditure commitment, but just as importantly the way in which we spend it. Delivery for the next government is as much about appointing the right leaders and letting them get on with it as it will be about cutting expenditure. If they get both right, they stand a chance of building a sustainable platform from which we can continue to meet the ever-growing needs of an ageing population.

- Chris Bones is dean of Henley Business School; chris.bones@haymarket.com