Better financial planning and reforms needed to avoid ‘disastrous combination of failing public services and breached spending controls’

This article is more than 3 years old

This article is more than 3 years old

Hospitals could join prisons and social care in a cycle of “crisis, cash, repeat” unless they receive better financial planning and reforms, a Whitehall report has warned.

Without improvements, public services are doomed to fail or breach spending controls, the report by the Institute for Government and the Chartered Institute of Public Finance and Accountancy (Cipfa) said.



The government’s austerity programme of delivering good services while cutting spending “ran out of steam” in 2015, according to an analysis of official figures. Both organisations are urging the chancellor to ensure any measures in the budget have sound evidence behind them.

The findings come as Philip Hammond comes under pressure to use an unexpected rise in tax receipts to aid public services in his first full budget next week.



Julian McCrae, the Institute for Government’s deputy director, said that unlike others, this report was not calling for more money but instead better organisation to shore up the public sector.

“As we’ve seen with prisons, social care and now potentially hospitals, the government risks getting into a cycle of crisis, cash, repeat,” he said. “This report is a call for better financial planning and reforms that are robust enough to survive public scrutiny.

“It is fundamental to increasing the effectiveness of these public services that ministers, officials and the public know how well government is performing and use this information to guide decisions.”



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The report used government data to examine five key public services: hospitals; adult social care; police; prisons; and schools. Ministers risk bouncing from spending crisis to crisis, against the backdrop of contentious Brexit negotiations, the report said. It warned that adult social care and hospitals were being pushed to “breaking point” – with prisons having been pushed beyond that point after cuts.

Both organisations highlight longer waits for A&E and cancer treatment, a 40% rise in delays transferring people from hospitals to social care and a sharp rise in prisons violence for evidence of the pressure on services.

While implementation of George Osborne’s 2010 spending plan was “largely successful”, further cuts from his 2015 plan have forced emergency action to help prisons and councils, the report said.

“The government cannot continue to bounce from crisis to crisis in this way,” it said. “Without action, within two years it could face a disastrous combination of failing public services and breached spending controls, against a background of deeply contentious Brexit negotiations.”

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The report’s authors made several recommendations, including that assumptions behind spending decisions should be subject to independent scrutiny. Successive governments have promised to transform public services but these ambitions have never truly been realised, it said.

The report suggested that an “Office for Budget Responsibility-esque body for public spending” be established to help embed efficiency within public sector decision-making and to prevent wishful thinking.

Rob Whiteman, Cipfa’s chief executive, said: “We know that for some parts of the public sector resources are stretched and that those working to deliver services are up against it.



“What is crucial is that we make the best possible use of the funds available.

This means having a thorough understanding of how organisations are run and services are provided, using this information to think strategically and creatively about improving policy decision-making, which will ultimately improve service delivery.”



A Treasury spokesman said: “Putting the public finances on a sustainable path is vital to securing a strong and stable economy and our record shows public services have continued to deliver improvements.

“Delivering further savings is challenging but achievable, and we are maintaining our spending commitments in this parliament so that priority services receive the funding they need.”