UK voters are being sold a lie. There is no need to cut public services

Tax increases and cuts to our frontline public services form the electoral battlegrounds for 2015. Against the background of an ageing population, declining share of global GDP and growing appetite for public services, politicians tell us that we need to choose which of our frontline services we can afford to save.

Locally, the discourse of tax and cuts is the same. Given less funding, which should we cut: this library, or those home visits? This day-care centre, or those street repairs? We are told that our public services have a further 60% of cuts still to go, regardless of who wins the election – and we accept these hard choices as fact.

UK voters are not being told the truth. The other day I read a cases study from Holland in Reinventing Organizations that made me fall off my seat. The Buurtzorg community nursing organisation has a back office of 30 people to support 7,000 frontline nurses. It has almost no middle management – no HR, legal, estates, comms, finance, IT, procurement and so on. An audit firm reported that 40% fewer hours of care are required by the organisation’s patients, and its nurses have 60% less absenteeism and a 33% lower turnover than other nursing organisations.This organisation has been able to provide a radical increase in frontline services, of much better quality, with greater satisfaction for both patients and carers – and for much less money. No one in the UK has been able to do this.

Now for the interesting numbers. The audit firm suggests that Holland could achieve savings of €2bn each year if all of its nursing organisations achieved similar results. Grossed up for the UK, that’s almost £6bn saved, every year. Just in community nursing.

If we were to follow a similar, back-of-envelope approach across the UK’s public services, what sort of numbers could we release and redirect to the frontline? There are around 5.3 million UK public sector workers, 1.1 million of them in public administration. If we add 400,000 for the NHS, we get 1.5 million non-frontline public sector workers, at a cost of £36bn (assuming an average salary of £24,000). The Dutch model has a ratio of back office to frontline workers of 30 to 7000. If the UK could adjust its ratio accordingly, it would need fewer than 23,000 back office staff to support 5.3 million frontline workers. Reducing the number of back office staff from 1.5 million to just 23,000 would generate possible salary savings of up to £35.5bn.

There are three important caveats. First, these are back-of-envelope numbers: we don’t know what the real numbers are. But that’s not the point. My point is that the numbers are obviously very big – big enough to improve the lives of millions of people, and to merit some proper investment in crunching the real numbers.

Second, all these savings can be kept entirely within the public sector: every pound can continue to be spent on public servants. Third, such a shift would involve no mass redundancies. It would be a gradual shift, over the next 10 to 15 years, in what many staff spend their time doing – a shift from predicting, specifying, commissioning, modelling, building, measuring, planning, managing, auditing, and reporting on services (incidentally, jobs with lower job satisfaction) to serving on the frontline (involving high satisfaction), supported by a minimum, utility capability set that is consumed like power. In short, I am raising the long-term possibility of a bold reconfiguration of our public sector, away from management and back to serving the public. My speculative numbers suggest that the election choice of “more taxes or fewer services” may be a confected nonsense that masks a deep-seated political and bureaucratic reluctance to entertain a reform of our own public sector along similar lines to that achieved by Buurtzorg. The electoral truth is that the Victorian-era plumbing of our public services is irreparably broken, and that no matter how much money we pour in at the top, or how much we cut services, we won’t solve the problem. We should distrust anyone who says they can.

So why do I think this fundamental reconfiguration of our public services might be possible? Well, the sorts of emerging business models that we’re all familiar with (leaving aside the issue of whether these companies pay enough tax: remember, we’re talking about keeping the money within the public sector) such as Spotify, eBay, Airbnb, Rightmove, Uber and Amazon, all broker new, direct, relationships between people, services and things. They also improve as they go by harvesting data, to ensure they’re always giving people what they want.

All of these organisational models succeed by enabling providers of services and products to connect with consumers in a much more direct, flexible, and cost-effective way. Importantly, although clever digital technology mediates this relationship, it doesn’t need to replace it: think of sites that allow people to choose their taxi driver – or their next date – in a much less haphazard way that puts the consumer, not the provider, in control.

It is worth bearing in mind that all of these new models have been vigorously resisted by incumbent organisational structuresthat in effect extract rent from brokering this relationship. We need to think about how the politics of modernising our public services along these lines might play out. Although all savings would remain in the public sector, by radically redirecting public money away from bureaucracy to face-to-face services there will inevitably winners and losers.

Doctors, nurses, teachers, home visitors, librarians will be winners. We’re told we must learn to live with fewer of these people, but we could actually have more if we sorted out our organisational model. The other big winners are, of course, the customers: everybody who consumes public services.

Long term, the losers will be the legions of workers in hierarchical organisational structures – private or public sector – who, like the record company executives in the 1990s, play a less important part in post-bureaucratic organising.

Of course, our public services are different from the likes of Amazon or eBay. They’re often the last safety net protecting the welfare of citizens – but are also a monopoly in which those citizens lack a choice. Public organisations therefore need careful regulation to ensure public money is spent fairly and wisely – and this will require valuable non-frontline roles. Nonetheless, my point remains: if progressive taxation and cuts are unable to safeguard our current public service model, it must be time to consider some of the newer ways of organising that which we all take for granted in our daily lives.

Read more:

• From Computer Weekly: What is government as a platform and how do we achieve it?
  
• Six lessons for digital public services from across the world
• Getting government online: a new generation of digital public services – in pictures

Mark Thompson is a senior lecturer in information systems at the University of Cambridge Judge Business School. He tweets at @markthompson1

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