UK Autumn Statement: Public service spending protected, but demand pressures & economic challenges loom large

Public service spending has largely been protected in the UK Government’s Autumn Statement, but continuing demand pressures and difficult economic circumstances will continue to create a complex context for frontline services, the Serco Institute has said.

Spending on the NHS, Education and Defence has all been maintained or bolstered in the Autumn Statement and a number of initiatives announced to encourage efficiency and reform across public services. However, the Office for Budget Responsibility (OBR) indicated that NHS waiting lists remained at record highs with 7.1 million waiting for elective surgery.

The Chancellor outlined measures to encourage greater efficiency in public services. He also separately outlined how competition can help drive innovation in the economy. Serco Institute research has shown that through creating more competition in the procurement of public services, 5-15% savings could be made.

The research also shows that public services procured in a more competitive environment perform as well, if not better than those simply delivered in-house.

Commenting Ben O’Keeffe, Deputy Director of the Serco Institute said:

“Fears of deep cuts to public services spending have not been realised, with budgets protected or increased in some cases. But as the Chancellor acknowledged, this doesn’t mean that critical services are out of the woods. Pressures on demand, partly a hangover from the pandemic, and difficult economic circumstances mean day-in, day-out frontline services will face huge challenges in the coming months.

“Greater efficiency will be needed if frontline services are going to cope with these pressures. Furthermore, competition was acknowledged in the Statement as a driver of innovation. Independent research has shown that extending this principle of increased competition to procurement of government services can deliver innovation and in-turn better value for taxpayers.

“For example, research by Capital Economics has shown that £29-86 billion of the £300 billion government spend on goods and services could be saved through innovation driven by greater competition.

“Competition drives innovation, innovation drives efficiency and quality. The Government should look to leverage this fact when it comes to public services, particularly in the difficult economic circumstances we find ourselves in.”

The independent research report Delivering Better Services for the Public from which the above statistics are taken is available here

 

 

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