How much are we really spending?

September 23, 2010 at 11:10 am Leave a comment

by Claire McEneaney

The biggest issue that our coalition government is grappling with is, of course, cuts in public services. We all know that cuts have to come and that, inevitably, there will be some sacrifices in what we are able to do. But what no-one is sure of is where these cuts will ultimately fall and what effect they will have on our day-to-day lives.

An obvious approach is to look at where existing public spending really works the hardest i.e. where does it really deliver great outcomes? But does anyone really have an accurate idea of where this occurs? Do we really know how much we’re spending and on what? What other resources (both money and people) could we drawn upon or reconfigure to deliver more for less?

As part of the Innovation Unit’s work on Radical Efficiency, we’re working with six localities at looking at how they can transform their early years provision. We want to enable them to redesign what they offer to improve outcomes and lower costs. The Radical Efficiency model shows that really understanding your available resources can lead you to radical different solutions. Therefore, we asked our six sites to conduct resource audits in their localities – gaining access to new data and building a new understanding about how much is being spent, on what, and what impact it has. It allowed sites to have conversations about where money is effective and where it isn’t. It also allowed them to see where opportunities exist – both for collaboration and joint working, but also for decommissiong where there is duplication.

The first thing we learnt is that doing a resource audit is really hard. People can be reluctant to share information about their budgets, particular in an atmosphere where everyone is worried about redundancies and cuts. Also, some information is just really hard to get hold of – rather worryingly, there were many instances where people had no idea how much they were spending, simply because they had never looked at it as a lump sum.

But we also learnt that when a resource audit is done well, it is an incredibly powerful tool. Our star resource audit was done in Knowsley, where Jo & Angela (our project leads) worked relentlessly to gather as much information as they could. You can see the fruits of their labour in the picture below – astonishing.

The resource audit shows spend from conception to 16 along the timeline. The top section illustrates universal services, the bottom targeted services. The different colours relate to whether the service is education, health, family support etc

Participants in the workshop were instantly able to see patterns of spending. Targeted services are, by their very nature, more costly than universal services. There is a lot of money being spent on health services during the early years, but education spending only really kicks in from age 5. There were some surprising figures in the data – the high cost of social services and the low cost of community policing. It also instantly highlighted some opportunities; at present every child born is registered at the registrars office but it was thought that this service could be easily carried out in the local children’s centre, which would be easier for parents, and would also mean that the children’s centre instantly established a relationship with that family and that child. This could provide the foundations for a great start in life, cutting out many costs later in life (such as youth justice).

It was really remarkable to see how people in the room responded to the information. There was universal agreement that they had previously had absolutely no idea how much money existed in the system. They also agreed that there was tremendous scope to make that money work much harder, and that by reorganising services they could deliver much improved outcomes for the families with young children that lived in their locality. It’s a remarkable tool and one that we are really excited about using again. But it also illustrates the need to cut and decommission intelligently, rather than the traditional ‘slash and burn’ or ‘salami-slicing’ approaches. Only by being smart about how we use our resources can we hope to deliver excellent services that provide great outcomes.

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Entry filed under: Education & Children's Services, Government Departments, Innovation Policy, Local Authorities, Local Innovation, Public Services, Radical Efficiency, Research, Social Innnovation.

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