While the public sector in Europe is struggling to keep up with the changing environment, and the division between the public and private sectors is blurring, European governments are facing opportunities to deliver improved services while reducing their costs. In its latest Institute report, BearingPoint explores ideas how public sector reform can effectively be realised.
Need for public sector reform
For many centuries, the public sector has enjoyed a position apart from other industry verticals: it accounts for a 25% of all employment in the EU member states and plays a key role for Europe’s economy, at the same time the sector swallows around 50% of GDP. Against the backdrop of several economic and social trends, ranging from an ageing population and rising costs to the increasing complexity and implications of a low-growth global economy, European governments find themselves in an increasingly challenging environment. On the one hand they need to live up to expectations, while on the other hand they at the same time need do so in an effective manner.
In its most recent BearingPoint Institute report, consultants from BearingPoint address this issue and plead for a growing momentum of public sector reform. According to the consulting firm, the public sector faces an abundant number of opportunities to deliver enhanced services and reduce costs whilst increasing the value it brings to the communities it serves. Eight major opportunity areas are given, Consultancy.uk presents a summary:
Assess the societal ROI
The public sector should support its economy by sharing data across departments and services. This should be done by implementing information-sharing mechanisms that add value without undermining citizens’ rights to privacy and security.
Expectation management of costs and targets are key in delivering agile projects
Strategic goals and realistic, measurable results should be agreed upfront to prevent uneasy compromises and budget overruns and a capable and experienced management structure should be set up to ensure all KPIs are met.
Engaging in the digital era: structure the organisation around a service provider mind-set
Governments should realign the allocation of their funds, budgeting and workforce management around customer requirements in order to meet these needs at a lower cost and adopt technology at every step of the design and development of their public services.*
Develop sharing and partnering competencies
The public sector should adopt shared services models and cooperate with national or regional counterparts to meet the reduced budgets. Cooperation should be embedded as the default approach for implementing laws and regulations.
Public sector as a catalyst for economic success
Public-private relationships should be strengthened and the public sector should cooperate more with the private sector as business growth linked with greater accountability and incentive structures offers a better way to support local economies.
Adopt portfolio management approach to avoid deadlocks in service delivery
Governments should manage existing and new services and projects as a portfolio linked to measurable outcomes, to avoid the risk of undermining as circumstances change. As a result, the service base can be revisited when required and focus can be put on adding value for the customer.
Optimise regulations to avoid the complexity deadlock
Regulations should be optimised before being applied and governments must be wary of short-term pressure to redraw regulations and risk new rules becoming “overly onerous, costly and potentially unenforceable.”
Tackle the demographic time bomb by engaging with front-line managers
As a large segment of the public sector’s workforce is retiring, the sector needs to create a new workforce for future public service delivery. In order to do so, governments should engage front-line managers to understand the skills needed for the organisation.
* Just recently, McKinsey & Company released research in which it pleads for government digitalisation, as this can save $1 trillion annually in economic value on a worldwide basis.