By Daniel Hunter

Improving productivity and redesigning public services will be key to sustainable public finances according to a report — The State of the State 2014 - published by Deloitte, the business advisory firm, and Reform, the think tank.

Deloitte and Reform argue that an incoming government in 2015 will have six months to set out a Spending Review that addresses how the next stage of cuts will be implemented to meet the deficit reduction plan.

Mike Turley, head of public sector at Deloitte, said: “We are just halfway through the deficit reduction plan, and the next half will be the more difficult part. The next Spending Review will be the defining moment for the UK’s public services. Key to making the remaining savings is thinking again about how our public services are designed and delivered.”

Deloitte and Reform call on a future government to focus on improving public sector productivity and make better use of technology, demand management and reformed working practices to find savings.

Deloitte calculates that saving one percent of public sector workforce time through productivity measures could create annual savings of £1.64 billion.*

Mike Turley added: “Productivity is a challenge for the whole economy, but in the public sector we’ve only ever got more from public services by spending more. Meeting the challenges of the future, increased demand — particularly in areas such as health — with less money, requires new ways of working.

“Those running our public services need to think about how, where and when public servants work to ensure time and resources are allocated as efficiently as possible. This means looking at how to make better use of technology, looking at how to manage the level of demand on services and introducing new working practices, including flexible working and reshaping the property footprint of our public services.”

Andrew Haldenby, Director of Reform, added: “Politicians are not yet giving public service leaders the total, unequivocal support for change that they want to hear.”

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