All Quiet on the Western Front?
October 28th 2009
On one level it is politics as usual. What is the PM's favourite biscuit? What do the Europeans think of Tony Blair's superstar qualities? George Osborne suggesting some adjustments to Bankers' bonuses for the period he comes to power! But underneath there is a tension which only manifests itself as part of the Royal Mail dispute. What is going to happen to me, my family, my company and the country after the next General Election?
Although the usual game of politics goes on as usual, there is a period of quiet over the financial measures to be taken in 2010 and beyond. The Chancellor's budget statement will probably light the ‘touch paper' of this particular firework. The ‘economies' or ‘cuts' so far suggested by Labour and Conservative are insignificant compared with the level of debt to be dealt with at least ‘within the financial cycle'.
Third sector organizations are drafting their budgets for next year. I have always wondered at the level of diligence expected of us whilst Councils can always sell land or the civic art collection to make up for their deficits. This blog does not extend far enough for me to reflect upon the fantasy world of NHS finance. Let us just say its accuracy is in inverse proportion to the amount of money it spends on the services of the Audit Commission and ‘big five' internal auditors!
The Third Sector organisations that trade commercially have been affected by the general downturn and like every other business have had to make economies to cope with reduced demand. But organizations providing public services have probably just endured a ‘pay freeze' to cope with little or no uplift on contracts or SLAs. The talk in the corridors of power in PCTs and Local Authorities is of 15% reductions on current levels of expenditure. Even allowing for the usual exaggeration factor, there is real trouble ahead.
Governments seek others to do the ‘micro-cutting' for them. Local Authorities and PCTs will be in the front line. But they will cut first their suppliers, seeking to reduce their contracts, re-negotiate prices and squeeze as much as possible. Third Sector suppliers need to be pro-active. We need to forget about past competitiveness and think of ways to minimize the pain that awaits us. This Institute recommends Mutual Assistance Partnerships; all will be explained at a seminar in January 2010.
The Third Sector has time to plan a way forward through the next three years or so. New, cost effective ways of providing services will be welcomed by purchasers in straightened circumstances but procurement has to be imaginative, flexible and co-operative. If not community health and social services will be decimated. I leave you with a scene from the last round of brutal cuts. 1978. Salford Social Services cut its field work social workers so deeply that on some days there were only Senior Social Service officers on duty. And they had forgotten how to get up from their desks!
Brian L. Strevens - 28/10/09
We will endeavour to update this blog on a weekly basis. Contributers Brian Strevens (Director of the Institute) and Francis Davis (Director of Policy) plan to submit their blogs on alternate weeks.