Is the public sector running out of ideas or just running out of room to manoeuvre? I ask this question following a publication by a very high profile local authority chief executive.
In this article he acknowledges that public sector managers have been very good at “squeezing efficiencies out of budgets by smart management and clever accounting”, he refers to changes in procurement, reforms of back office services and outsourcing of services. He could also have referred to pay cuts and redundancies but I suspect that in chief exec speak these human resource casualties are assumed as part of the changes and reforms.
This was the reality of the recent past, year on year efficiencies. Sometimes these efficiencies were delivered within the context of a small growth in budget to take account of population changes which would cause an increase in demand like the growth in the numbers of older people. In effect this was giving with one hand but taking away with the other.
Today as managers start to work on next year’s budget the reality is very different: the ”new normal” is to spend less each year. This is not expected to be a one off scenario but the normal state of affairs for the next four or five years. The management task shifts from making efficiency savings to “lowering costs and managing demand”.
This, of course, is chief exec speak for lowering wages, as this is the single biggest cost element, and rationing or disqualifying people from a service. We have already seen evidence of this in how local authorities manage their adult social care budget with the tightening of eligibility criteria to exclude all but the most severely disabled, whilst freezing or even reducing the fee level they pay to resident home owners and home care providers.
Whereas efficiency savings required some creativity and some different ways of doing things, cutting wages and “managing demand” is more about ruthlessly determined management, stopping some services because we can no longer afford them, and being fairly arbitrary in who gets a service.
Public sector managers will always have ideas about how services can be improved and efficiencies made but this is no longer the name of the game. The new normal is about reducing spending and reducing demand. For many managers in the public sector this means there is no room to manoeuvre, no way to protect the service and no way to protect their clients. Which of course many will view as no way to run a public service.
The art of headhunting
My holiday reading included Head Hunters by Jo Nesbo, a thriller about a number one management head hunter who is also a successful art thief. No doubt all those management recruitment consultants I came across as a director would say that the fiction bears no relation to the reality.
Well, all I can say is the tone of the interview, the attempt to throw you off balance, the importance attached to a hand shake, the way you dressed and the significance of how tall you are brought it all back. And the relationship with the client? That explained a lot, too.
“I don’t aim to recruit the best candidate but the one the client will like the best. My reputation and that of the firm is based on being able to come up with someone I know the client will like.
Oh, I will give them a short list of “good” people all of whom could do the job but I will recommend only one. The others are there to flatter the client, to show that there is a lot of interest from able and experienced managers for a post in their organisation.
The client always likes to see one or two candidates from big organisations or people already operating at this level - which of course is why I advised them to offer more money. My success depends on being able to identify the real client, the one who will really be making the decision. In some organisations that is the chief executive, in others it is the leader of the council or chair of the board. My particular skill is working that out.”
(With apologies to Jo Nesbo).