Efficient Government Plan Briefing No. 108 Feb 2005

Introduction

In Briefing No.86 we outlined the Scottish Executive's Efficient Government initiative. This briefing updates that guidance and includes the plan published by the Minister for Finance and Public Service Reform on 29 November 2004.

Efficient Government Plan

The plan envisages that £745m will be saved across the public sector in Scotland by 2007/8. The aim is to increase this to £900m. Aggregate cash savings are £1732m. The main portfolio areas for savings (£million) are:

Given the very tight funding settlement for local government (see P&I Briefing http://www.unison-scotland.org.uk/briefings/lgspend05.html ) this aspect of the plan is worthy of closer inspection. The plan states that local government is expected to achieve cash releasing savings of £325m. Savings of £168m are already built into the three year funding settlement and the remaining £157m is expected to come from procurement (£80m), Supporting People Programme (£27m), Police common services (£8m), Fire service reform (£1.5m) and procurement (£80m).

Health savings are planned to come mainly through procurement efficiency (£50m), logistics (£10m), shared services (£10m), preventing inappropriate hospital admissions (£25m), prescribing (£20m) and internal efficiencies (£40m).

Scottish Water's contribution will come from efficiencies in capital investment and operating costs.

The plan sets out five work streams:

• Procurement – Collective buying power and use of eProcurement.
• Managing Absence – All organisations are expected to have strategies for the management of absence and support for staff to return to work.
• Asset Management – Joining up estate management across the public sector and reducing maintenance costs.
• Shared Services – Sharing services such as payroll, HR, IT and finance.
• Streamlining Bureaucracy – Removing duplication in scrutiny, planning and performance monitoring

The Executive has established a £60m Efficient Government Fund based on an 'invest to save' approach. Organisations will be able to make applications in January, March and July 2005. The intention is to spread good practice through this system. Shared services and procurement dominate the likely list of projects.

The full plan can be viewed at http://www.scotland.gov.uk/library5/government/egrseep-00.asp

Responses to Efficient Government

UNISON recognises that all public sector organisations should be aware of opportunities to work more efficiently and effectively. UNISON is however concerned that in the past 'efficiency savings' have simply been a mask for real cuts in services or privatisation. We would be more impressed if the Executive tackled real waste such as the £5.8bn wasted on the additional cost of PFI schemes as compared to conventional procurement.

Others have been sceptical about the presentation of Efficient Government. The Scottish Parliament Finance Committee in their budget report stated;

"The Committee also has difficulty in reconciling claims made by the Executive in relation to the Efficient Government document. Our Committee expressed concern about the presentation of this information and argued that any comparisons made, for example with the Gershon review, should be on a like for like basis and over the same period."

They also noted that only local government had a reduction in budget baselines from anticipated cash savings.

Branch Action

Branches should ensure that they are consulted over any plans under this initiative. Look for any bids by your employer to the Efficient Government Fund or previous bids to the Modernising Government fund. On-Line Executive resources for this initiative are currently very poor, but the Open Scotland site is a good starting point http://www.scotland.gov.uk/Topics/Government/Open-scotland.

The Local Government Improvement Service has equally poor resources however they have recently appointed a new Chief Executive who is reviewing the framework http://www.scotland.gov.uk/about/FCSD/LG-PERF4/00018777/improveservice.aspx

Remember that savings are to be reallocated to services. Some employers are already attempting to claim budget cuts under this initiative. Ensure your employer can identify how savings have been reallocated. Employers should also be encouraged to claim credit for all productivity improvements.

Shared services will be a priority including (but not limited to) procurement, IT, HR, payroll and finance. P&I Briefing No.10 sets out some guidance largely based on UNISON Scotland's private sector experience. This does not have to mean combining services across Scotland. Regional or virtual solutions may be more appropriate. Encourage employers to look across public service boundaries for more localised solutions, particularly if outsourcing or private finance is being considered. The strategy states "in many cases a regional approach is as appropriate as a national model".

Most public sector organisations will have policies for managing absence. However, these will be analysed and benchmarked by Audit Scotland as part of this initiative. Employers are also being encouraged to "address the management of sickness absence as part of negotiations on pay and conditions". Whilst there are a number of positive programmes for managing sickness absence, disciplinary procedures remain the most common employer tool. See http://www.managingabsence.org.uk.

Please forward examples of good and bad practice to Dave Watson at the P&I Team in UNISON House d.watson@unison.co.uk. This will enable us to develop further guidance for branches and engage with government through the Scottish Public Service Forum.

Contacts list: Dave Watson d.watson@unison.co.uk @P&I Team 14 West Campbell Street GLASGOW G2 6RX Tel: 0845 355 0845 Fax: 0141 307 2572