chapter five: Fundamentals of reform - efficiency and productivity
44. Improving efficiency and productivity across the public services will continue to be a major element of our reform agenda. We will reduce the burdens on the public services and give greater freedoms where services are managed well - and we will expect those services to deliver substantial efficiency gains.
Efficient Government
45. Across the public sector, we are fully committed to our programme of Efficient Government. We aim to deliver £1.5 billion of annually-recurring efficiency savings by 2007/08 4 and have already identified projects which will deliver £1.27 billion of that. But Efficient Government was always about much more than our initial targets. We said in the Efficient Government plan that -
"we will have succeeded when efficiency is fully part of a culture of continuous service improvement - everywhere in the Scottish public sector".
46. That change is happening -
- We are working with CoSLA and the Local Government Improvement Service to deliver new arrangements, which will form a part of councils' normal business planning processes, which will allow more accurate annual reporting of local government efficiency gains;
- The recent review of procurement led by John McClelland set the framework for the public sector to realise the substantial efficiency gains to be made from smarter, more joined up procurement, supported by the eProcurement Scotland system; 6
- Our strategy for shared support services across the whole Scottish public sector was published for consultation earlier this year. 5
It looks at the whole range of approaches - including national and regional service hubs, sharing within sectors and, where appropriate, outsourcing to private sector suppliers.
Efficiency gains - achievements
There are a number of significant initiatives underway across the NHS in Scotland aiming to release £523 million worth of efficiency savings by 2007/08, released for reinvestment in the ever-increasing demands that are being placed on the delivery of high quality public health services.
Concerted effort has been made to build upon the collaborative procurement arrangements that were previously in place, with the establishment of the NHS National Procurement Organisation. In one year cash savings of £33 million have been realised through these revised procurement arrangements.
In the Primary Care setting, pharmacy advisors throughout NHS bodies continue to ensure that the right medicines reach the right patients at the most cost-effective prices. Consequently the first year's efficiency target of £5 million has been exceeded.
And through a series of pilot projects led by the Centre for Change and Innovation, by refining GP and outpatient booking systems and by redesigning the delivery of certain outpatient specialties, we are ensuring that more patients are being seen sooner, and at a time and in a setting which is more convenient to them.
Efficiency gains - achievements (continued)
One year on, our reform of the High Court is delivering tangible benefits. Evidence in the case is made available much earlier by the Crown to the defence. New preliminary hearings mean that cases only go to trial when they are ready, and the evidence of more witnesses can be agreed - so they do not have to appear in person. More people who intend to plead guilty do so before the case comes to trial. And almost all trials go ahead when planned, in contrast to the previous pattern of frequent adjournments.
As a result - almost 70% fewer witnesses have been asked to apear in the High Court. When they do have to attend, their experience is less frustrating because the trial is much more likely to go ahead on time. Greater efficiency, but also a better public service to key stakeholders on whose participation the justice system depends.
47. We know, though, that there is more we can do across public services to strengthen management and accounting systems so that we have a clearer picture of the unit costs of services provided and how these costs benchmark against other providers and against alternative approaches, leading to more informed decisions and better value for money.
Efficient Arm's Length Bodies
48. We review the role and performance of NDPBs and agencies on a five-yearly cycle. The application of Best Value to NDPBs on a continual assessment basis will complement these periodic reviews of performance - external scrutiny of an organisation's own arrangements will come from Audit Scotland.
49. We are determined to ensure that opportunities for efficiencies are taken up by all public bodies. All Ministers will be reviewing their areas of responsibility to ensure that the groups of bodies in each portfolio, or across portfolios, have fully embraced the efficiency agenda and that services are best configured to ensure the delivery of the desired outcomes for citizens.
Simplifying planning, funding and reporting
50. The investment in public services since devolution has led to a wealth of new initiatives - but this has brought with it an increase in the bureaucracy of planning, performance reporting, and funding. We need to ensure that checking does not become an obstacle to doing. That means the Executive has to be more proportionate in its monitoring, and to be prepared to place responsibilities for functions in the right place and resist attempts to duplicate that function within another service provider.
51. In the short term, each portfolio in the Executive is committed to a measurable reduction in the burdens of planning and performance reporting by 2007. We will also undertake a review of all minor levels of local government funding streams, as they often demand disproportionate amounts of officer time to manage. We will also consider how to further reduce monitoring requirements to incentivise demonstrable high performance.
52. In the longer term, we want to move to a radically streamlined approach. This could be based on identified outcomes in key priority areas. This would mean that the 60 or so plans which councils currently have to produce could be cut to around 5 or 6, combined with a dramatic simplification in performance reporting, and rationalisation of funding streams.
53. We will also consider how far reductions in monitoring requirements could be linked to and could incentivise demonstrable high performance.
54. Alongside this, we intend to look for ways to improve the distribution methodology used to calculate local government funding and work with stakeholders to produce an improved Local Government Performance Management Framework, including consideration of the current Statutory Performance Indicators ( SPIs).
Scrutiny
55. A robust scrutiny regime is vital - to protect the public, and to provide reassurance that services are performing well. We therefore intend to conduct a fundamental review of the arrangements for inspection, regulation and audit, of the public sector - including procedures for formal external investigation of complaints.
56. The review will be headed up by Professor Lorne Crerar (currently chair of the Standards Commision). It will set out principles to guide scrutiny and will then go on to consider the implications of those principles of effective scrutiny for the current institutional arrangements, and report to Ministers in 12 months. Although independent, the review will be informed by the development of the wider public service reform agenda over that period.
57. Alongside the review, we will work with scrutiny bodies through a reconvened Joint Scrutiny Forum to develop and apply best practice.
58. We intend that the review should lead to more flexible, proportionate and risk based scrutiny but, more fundamentally, it should ensure that scrutiny is not a burden on organisations, but an engine that drives performance improvement and service transformation.
Discussion points:
- What more can we do to drive up efficiency and productivity in public services?
- How best can we move to radically streamline funding, planning and performance reporting?