Why public sector cuts fall on frontline services

The news that local authorities have already started shedding jobs has come as something of a surprise. Conventional wisdom has it that public sector employment is, to an extent, counter-cyclical and that governments tend to avoid cutting public spending until the economy has started to pull out of a downturn. Whoever wins the next election, public spending cuts are probably on the cards for 2011.

But some councils are already finding themselves in difficulty because some of their own revenue streams have dried up.  The property crash has led to fewer land searches, the retail slump has reduced car parking revenues and rent and council tax defaults have increased. On top of this, many councils have lost money through dodgy investments.

The Telegraph’s Philip Johnston hopes that the axe will fall on back office staff rather than frontline services:

What is crucial, however, is that when councils come to cut back on their spending they try to protect their core services. In difficult economic times, local authorities have a responsibility to house and look after families in difficulties. They also run elderly care services and perform other community functions that will be crucial in the coming months.

There has been a big increase in recent years in administrative council staff carrying out tasks that many who pay for them find hard to justify even in good economic times.

But unless you have worked in the public sector, and very few journalists have, it is difficult to understand the complex nature of its bureaucracies. My favourite analogy is with the wires under my desk. I have any number of things plugged in; desktop computers, laptops, printers, external disk drives, a radio, sometimes even a TV. Over time, as each new appliance has been added, the wires have, by themselves, congealed into an almost unbreakable knot. Even the best sailor would be hard pushed to tie a knot so firm.

So it is with public sector bureaucracy. Over the years, each new demand or government initiative has created another layer of processes and systems that need to be administered. The recent failings of the children’s social services system highlights this problem. Last year, the Audit Commission warned that the new processes brought in after the Victoria Climbie inquiry were hindering rather than helping frontline social workers. The unclear reporting lines and ambiguity around roles and responsibilities reported by the commission are not unusual in many parts of the public sector. The finding that too much time and energy is spent on setting up structures and processes is not surprising either. Where there is ambiguity you set up processes to cover your arse.

Consultation and co-ordination also soaks up resource. Whenever you hear the term “multi-agency” it means that someone has to manage the communication and activities of the different agencies. Often, the involvement of multi agencies is obligatory. The government says you have to involve certain people, so you do, regardless of whether it is necessary in the circumstances.

The result is an extremely complex set of processes and relationships. One tool I often use with senior managers is a relationship map, where I get them to map out all their relationships to help them decide which ones they need to strengthen and who they need to work on to achieve their objectives. The relationship maps for executives in the public sector are far more complex than those of their counterparts in the private sector. Often, they resemble plates of spaghetti as the number of people and the different organisations criss-cross the page.

Unpicking public sector bureaucracies is therefore extremely difficult. If I try to untangle the set of wires under my desk by simply pulling on one wire, I just make things worse. So it is with public sector bureaucracy. Blindly cut out one piece and the whole thing might stop working or the organisation could fall foul of the latest government edict. 

To reduce public sector bureaucracy requires not only a line by line examination of these internal processes but also some political decisions to stop doing some of the things that public sector organisations have been doing for years. It would be hard slog and it would involve getting into specific detail neither of which politicians like. They much prefer a quick fix which allows them to take a fixed percentage off the budget across the board.

Which is why public spending cuts always fall on front-line services. As one senior social worker from one of the country’s largest authorities said to me last year:

When we are asked to cut a certain amount from the budget, it is far easier and more visible to close three day-centres than to try to grapple with our internal bureaucracy and squeeze savings out of it.

For historical reasons, and because of layer upon layer of government policy initiatives, public sector bureaucracies have become extremely complex. They are characterised by ambiguous reporting lines, unclear accountabilities, confusion over roles and power so diffused that even the most determined intentions to act disappear into a void. Because it is such an enormous task to pick these systems apart, it is much easier just to cut the frontline staff.

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5 Responses to Why public sector cuts fall on frontline services

  1. CherryPie says:

    An excellent post. Thank You!

  2. jonty says:

    The knee jerk reaction of most local authorities (I have no experience of health but I guess its the same) is when that going gets slightly tough – put a freeze on recruitment activities. Easy win – good fodder for the local press.

    Thats OK in the inner sanctum on the policy & consultation units – as you say they are career level paperclip counters and will never leave.

    The downside is that frontline services (that the pubic actually uses..) with frequent staff change overs, maternity, long term sickness, reliance on students & casuals etc etc tend to start to fall apart due to understaffing.

    So all the more reason for structural analysis and multi agency working to aid efficiency…

    neat eh?

  3. tbrrob says:

    Simply the state is to big. How on earth do they expect to be able to manage spending, logistics, etc on a £620 billion scale. Is there even a single corporation this big?

    And as Buffet points out the most difficult thing to do in business is to decide where to direct resources and capital. Which must be even more difficult when there is no profit motive to help you.

  4. Bina says:

    The financial difficulties local authorities have to deal with actually start at a much earlier point. Finance is complicated by the way central government allocates ‘grants’ – i.e. the main part of the money that L.A.’s operate on. This is done on an annual basis so that council’s raise part of the money through council tax and are given a grant supposedly to allow them to meet statutory obligations according to central government models. There is much tooing and froing of paperwork just to get access to the operating money – council’s who build up reserves are usually penalised in their grants..so then you have all those back room bods doing ‘essential’ work to maximise the money coming in through central grants. Cut the back room staff and there’s no money for the front line. Lose Lose situation created by the way local services are funded. It is a very difficult nut to crack as completely local-only funding caused problems prior to the situation we currently have. I’m sure if there was an answer somebody would have proposed it by now.

  5. Rick says:

    Bina – the problems of local governemnt finance is part of what I was talking about but I didn’t have space to go into such detail. As you say, the split between local and central financing makes things complicated and it’s made even worse by the move to financing some specific services directly from central government.

    In children’s services, the ambiguity goes even further because the funding and a lot of the control is with central government. Thus, Ed Balls can remove Sharon Shoesmith from her post but it is left to the local authority to remove her from her employment. Crazy!

    No organisation could operate efficiently like this.

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