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A new attitude towards transformation, and some tough decisions for the public sector

Transformation, especially around digital initiatives, will become an even more critical strategic ambition for the public sector in 2019 – one where the private sector is ideally placed to help.

We’ll also witness more public sector organisations getting into financial problems, forcing a significant rethink of the services they offer.

Pressure on finances…

Across the public sector there have been numerous stories of organisations having to dip into their financial reserves this year. We saw the consequences of repeatedly taking this approach with a number of authorities struggling to issue a balanced budget. But it goes right across all our essential public services, with the Police and Crime Commissioners reporting reduced reserves, and Academies’ finances being under increased scrutiny, to name just a few. All public services have increasing demands on essential services in common. This is sure to continue, so I suspect even more organisations will reach a tipping point next year.

…will lead to the public sector stripping back…

This financial pressure will result in public sector organisations stripping right back in terms of what their core offering is and what are the absolute essential services they need to deliver. While there may not always be the political support to vary some of those service standards, in reality they will just have to move.

It will happen in small pockets to begin with, and obviously there are some service areas that will be too high risk and sensitive from a PR perspective. It will need a major cultural change and this is going to take time but more and more public sector organisations are going to be faced with these very tough conversations next year.

…and a new relationship with the private sector…

We’ll begin to see realignment in the relationship between the public, private and voluntary sectors, and the role all those parties play in providing sustainable public services. This year has seen mixed views on the effectiveness of public sector outsourcing. There is some nervousness here, although there is still clear recognition that the expertise and innovation of the private sector is much needed. There’ll be an exercise in rebuilding trust and getting the confidence back into the relationship.

…will swap wholesale transformation for targeted initiatives.

What will help recreate that trust is a different mind-set to transformation. It’s often been referred to as the solution to the financial woes of the public sector, and it is. But in 2019 I think we’ll see a move away from wholesale transformational deals to a demand for targeted initiatives that put the skills and expertise of the private sector to best use – especially initiatives that maximise digital innovations and create a breakthrough in data sharing and intelligent analysis.

Transformation will be centred around a higher volume of specific interventions that on their own may only produce marginal gains, but collectively they have the ability to create the shift needed to ensure our public services are sustainable. 

The public sector needs to find ways to:

  • effectively manage demand for services
  • use innovation in technology to drive solutions
  • use AI in an appropriate and effective manner
  • analyse data and share intel on customers.

These are all key aspects that will make our public services far more effective than ever before. Organisations such as Capita have a significant part to play in supporting their journey by embracing innovation, investing in technology and pushing the boundaries ourselves in how we are developing and using it, so we can support our clients with these appropriate, targeted and powerful solutions.

Photo of Kate Fitzsimons

Kate Fitzsimons

Business Development Director, Capita Local Public Services

Kate has worked across the public sector for over 20 years in a variety of roles. She has been a strategic and financial advisor, led significant transformation programmes, been an executive member of a central government taskforce looking at the effectiveness of strategic partnering and been a CEO of a community interest company delivering social value through procurement. She has a deep understanding and is passionate about structuring effective arrangements across the public, private and voluntary sector to achieve public sector reform. She leads key aspects of Capita’s public sector strategy across London and how to integrate solutions to address the significant challenges being faced.

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