BearingPoint: 8 imperatives for public sector reform

27 January 2015

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.

BearingPoint Institute

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, presents a summary:

Sharing of data

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.

Greater private sector cooperation

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.


Manchester Mayor criticised for £250,000 consulting spend

19 March 2019

The Mayor of Greater Manchester has been criticised for splurging hundreds of thousands of pounds on consulting fees before determining that the region’s fire brigade must slash its budget by millions. Andy Burnham put more than £250,000 towards work from ten consulting firms as part of a review into the region’s emergency services.

Despite the continued argument that projects like the Northern Powerhouse initiative are helping to address the North-South divide in the UK, statistics still show that the North has borne the brunt of austerity in England. Northern English cities have been disproportionately affected, with their spending cut on average by a fifth since 2010, while cities in the south and east of England had average losses of 9%.

The impact of spending cuts has been keenly felt in Greater Manchester in particular, where local government spending has fallen by as much as £650 per person since 2009 in some parts of the region. As the area looks to find further savings, while the Central Government continues to fail to deliver on its pledge to end austerity, it has been announced that the fire brigade for Greater Manchester faces a reduction of up to £10 million from its budget.

The swingeing cuts to hit the emergency service would likely see its fleet of fire engines reduced from 56 to 47, while six fire stations face closure, and 113 support staff could suffer the axe. The news follows an investigation from Mayor Andy Burnham, which was triggered in part by the admission of Chief Fire Officer, Jim Wallace, that since 2015 the service has failed to deliver “its own efficiency plan”.

Greater Manchester Mayor Andy Burnham spent £268,300 to review the city’s fire service

The review itself has been far from inexpensive, however, and it has led some to accuse Burnham of hypocrisy. During the review of the fire service, which has delivered demands for the service to find major efficiency savings, the Greater Manchester Mayor reportedly splurged £268,300 in public funds on consulting work for his root-and-branch review.

According to local newspaper Manchester Evening News, Burnham tasked ten different consultancies with helping to compile the review, receiving payments ranging from £101,000 to £7,000. The largest amount was handed to Leicester headquartered P. Cooper & Associates for the expertise of a “senior change and transformation programme specialist,” while it was reported that another of the consultants gave “guidance on leadership and culture”.

A Greater Manchester Fire and Rescue Service (GMFRS) spokesman said of the spending: “The Programme for Change programme has required input from specialists who are expert in areas such as organisational transformation, operating models for fire safety and estates.”

Manchester’s fire brigade was criticised in 2017 when, in the wake of the Manchester Arena bombing, a report by Lord Kerslake noted crews had been held back from helping. Contrary to helping deliver a more efficient service, Unison has told the press that it believes the proposed cuts will make the residents of Greater Manchester “less safe”. With the expenditure of the review on private sector consultants now public, meanwhile, the union has slammed the report for throwing away public funds while jeopardising vital public sector work.

Unison represents the 113 staff who may lose their jobs, and a spokesperson for the union told Manchester Evening News, "It's disappointing that when finances are clearly tight, priority has been given to hiring external consultants rather than engaging with the workforce. This will be a shock to our members who were only told on Monday their jobs were at risk."

In recent years, a succession of local authorities have come under fire from officials and the general public for their consulting spending in the UK. Earlier in 2019, a freedom of information request by The Times revealed that local councils across the UK have spent around £400 million on consulting firms in the last year alone. According to the report, this represents a rise of more than a fifth since 2014, with critics using the figures to call into question the value added by engaging external expertise.

Commenting on the criticism many councils face, Tamzen Isacsson Chief Executive, Management Consultancies Association, said, “Consultants play a vital role in the public sector, [providing] transformational impacts, innovation and increased efficiency… Vital front line services continue to operate uninterrupted [while] consultants often help local authorities get better results with less money. As the MCA awards this year demonstrate consultants are delivering social benefits across the UK – from work on getting better outcomes for children in care to finding better processes for finding homes for vulnerable families in London these examples offer a true reflection of the consulting excellence that operates across the UK to the benefit of councils and the wider society.”