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The Big Squeeze – The National Context

The Big Squeeze – The National Context. Sarah Gadsden Improvement Service. Scope. The wider environment: the new, the ongoing and the ugly Christie and beyond Focusing Reform Practical Issues and Questions Key Challenges. The Changing Context. 12% real reduction in spend to 2013/14

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The Big Squeeze – The National Context

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  1. The Big Squeeze – The National Context Sarah Gadsden Improvement Service

  2. Scope • The wider environment: the new, the ongoing and the ugly • Christie and beyond • Focusing Reform • Practical Issues and Questions • Key Challenges

  3. The Changing Context • 12% real reduction in spend to 2013/14 • Extensive universal entitlements: travel; prescriptions; tuition fees; free personal care • High level of ‘failure’ demand: ‘preventable’ negative outcomes • Continuous freeze of local taxes

  4. The Changing Context • Substantial demand growth: demography, economic downturn, welfare reform etc • Over the next 15 years, Scotland’s public services will need to cope with additional demands in health, social care and justice amounting to more than £27 billion (NESTA) • If current models of care continue, the care of approx £4.5 billion will increase by £1.1 billion by 2016 and £3.5 billion by 2031 • Between 2008 & 2033, number of people aged 60 + is projected to increase by 50%; numbers aged 75 > will increase by 84%

  5. Benefits Changes • June 2010 Budget: £11Bn to be taken out of benefits spending programmes (further £7bn in CSR in Oct) • Key changes • Move to CPI from RPI for up rating • Migration from Incapacity Benefit to Employment Support Allowance • Reductions in Disability Allowance entitlements • Changes to Housing Benefits

  6. Benefits Changes: June Budget • Scottish LG Forum Against Poverty: Direct & Indirect cuts • Benefit ChangesPotential Loss (£m Scotland) • Housing Benefit 27 • Disability Living Allowance 260 • IB to ESA: 135 • Move from RPI to CPI 93 • Total £515m

  7. Position of Incoming Government • Clear prioritisation of NHS: 9% inflation + 4% demand growth means that cash protection alone will not work • Stimulating investment and growth: capital acceleration • The ‘covenant with the workforce’: no compulsory redundancy • Will preserve 32 council structure but…. • Initiating ‘partnership’ discussions with COSLA around Police, Fire and Health & Care

  8. Income and Demand Trends: TFG • Projection of income based on Spending Review • Projection of demand and costs on current trends (3 years) adjusted for demography • Based on current service models and arrangements • TFG: 2013/14 = £1.7 billion, 2016/17 = £2.8 billion • Income reduction = 48%; demand on current models = 52% • What happens if nothing else happens

  9. Scottish Block Finance & Demand 2009/10 – 2016/17 (% real terms)

  10. Initial Focus • Control the wage bill below trend: Pay strategy and workforce reduction • Maximise income: Tax collection, fees and charges • Drive value out of procurement: Share pressure with suppliers and contractors • Outsourcing of non-competitive provision • Drive value out of the asset base: Rationalisation; utilisation; co-location, etc. • Tighten eligibility and entitlement criteria: Prioritisation and targeting

  11. In Total This Gets Us…

  12. The reality of outcomes in Scotland • Many people in Scotland live very well by international standards: averages are not bad • The variation around the average is the issue: safety, health, learning, economic well being • Within Scotland: high clustering of positive outcomes and negative outcomes • Communities experiencing very poor outcomes on one domain experience them across others: clustering at neighbourhood level

  13. Focusing the Problem: Education and Learning

  14. The Fundamental Issue: Disparity of Outcomes

  15. Christie Commission • Reported in June • ‘Ethos’; ‘improved outcomes’; ‘sustainability’ • Major conclusions: • Need for whole system focus on outcomes • Acceptance of demand and ‘failure’ demand as key issue • Strengthening and deepening partnership: within and between sectors • ‘Localisation’ and ‘integration’ as route to reform; common public sector duty • Co-production: community capacity building

  16. Christie: Reform Should … • Support achievement of outcomes • Be affordable & sustainable within existing budgets • Strengthen accountability through democratically elected reps • Build services around people & communities needs • Empower front line staff • Support the local integration of service provision • Encourage prevention; tackle inequalities; promote equality • Improve transparency over plans; spending; performance • Streamline public sector landscape • Consistent with & support wider PS reform & improvement

  17. Reform: Practical Issues for FM • Ensuring the workforce can deliver – profile & capacity • Identifying opportunities to maximise income • Empowering employees to find solutions • Developing locally integrated services • Benchmarking Comparability Competitiveness • The appropriateness & sustainability of business models – Joint Ventures; Clyde Valley; Ltd Liability Partnerships

  18. Reform: Key Questions for FM Can you identify key steps for: • reducing costs, improving efficiency and enhancing productivity? • strengthening partnership working (with other public, private and voluntary providers)? • targeting resources to reduce failure demand and improve outcomes? • engaging public and service users with the changes that are necessary?

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