Councils can combat forthcoming cuts in public spending through personalisation, investment in preventive services and closer working with other bodies, think-tank Demos said today.
In a report, it warned that the question of how public services can meet people’s needs at lower cost will be the most pressing public policy issue for the next decade.
The government plans to increase public spending by 0.7% a year in real terms from 2011-4.
Cuts on the cards
However, the Institute for Fiscal Studies has estimated departmental budgets, including funding for councils, will have to be cut by 2.3% a year on average once spending the government cannot control – such as debt interest payments and increased spending on unemployment benefits – is taken into account.
Demos’s report, Getting more for less: Efficiency in the public sector, said savings could be made by making public services more effective, through increased personalisation, preventive services and collaboration between organisations.
Personal budgets are an “excellent example”
It said personalisation could help make savings by targeting resources more effectively at people’s needs.
It highlighted personal budgets in social care as “an excellent example of personalised services in practice”, by reducing dependency on institutional forms of care.
The report cited evidence from In Control, a charity which promotes self-directed support, of the potential of personalised social care to save the public purse as much as £1-2bn each year.
New role for commissioners
Commissioners will be key to driving reforms, according to Demos, and should move away from block purchasing and become “market stimulators” and “intelligence gatherers”.
This should involve encouraging the delivery of innovative services across a wide range of private, social enterprise and third sector providers to ensure choice for service users.
Need for evidence base
However, the think-tank warned that some providers, especially social enterprises and third sector organisations, urgently needed to “professionalise their business cases” to demonstrate the true value of services to commissioners.
This should include building an evidence base highlighting the benefits and potential efficiency savings to justify the use of public money on individual projects.
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