Embracing complexity, moving beyond planning within year, within organisations to seizing opportunities to benefit place

Timed to coincide with the launch of the IMPOWER Complex Transformation Academy, I joined a Public Finance round table event which discussed the nature of complexity in organisational transformation and detailed the challenges and opportunities involved.

Public service leaders have no option but to embrace complexity if we are to deliver successful change. And daunting as this sounds we all left the room with a sense of optimism that complex transformation can be delivered and indeed it must be if we are to create an affordable and sustainable future where better outcomes can cost less.

Across all public services the key financial challenge is that costs are rising faster than incomes. Most organisations budgets and spending are rising but are not increasing quickly enough to fund their price, volume and demographic pressures.

Generating additional income, from taxes or charges or economic growth has a part to play, but the key to creating sustainable and affordable public services is in reducing the need and demand for them, especially for those in most need of support and care, in adults and children’s services.

The policy, reform and funding landscape (including medium term financial settlements and local government re-organisation) alongside the potential for technological advancement are catalysts that can create opportunities to make transformational change happen.

However, these can be crowded out by the need to make short term savings to meet immediate cost pressures and deliver balanced budgets.

Improving outcomes (better health and wellbeing, improved economic prosperity and safer and stronger communities) require effective partnership working across public services who are also facing demand and cost pressures.

Key ingredients to enable better outcomes that cost less include the ambition to focus on outcomes, not just on budgets, and taking a longer-term view to understanding the causes of demand and drivers of cost and focusing on reducing the volume, type and nature of demand.

A focus on investment in early help and prevention and in building capability and capacity to design, lead and manage complex change programmes is also critical.

Despite the intuitive case that investment in prevention is a good thing, the reality is that such investment and the double running costs often required alongside preventive spend are often a lower priority than the need to fund immediate pressures and therefore seem unaffordable.

In addition, the fruits of one organisation’s investment falls in someone else’s garden. For example, public health and social care investment can prevent entry and enables exit from expensive NHS hospital care.

In such cases local partners should think “cross-organisation, cross years” rather than “in organisation, in year” about their service plans and spending.

Technology is a real opportunity to use the resources released from the time-saving productivity and efficiency improvements from implementing the rapidly expanding use of Artificial Intelligence and Data Analytics (e.g. Co-pilot and Magic Notes).

These significant time savings should be re-directed and re-invested in enabling staff to have better conversations with citizens, focused on early help and prevention (of future demand) and not to be used to generate headcount reductions to make savings to balance the books!

This may be a challenge for some local politicians and CEOs, but CFOs (s.151s) can show strategic financial leadership here with a focus on longer term cost avoidance over short term savings.

Local Government Reorganisation creates a real opportunity to think differently about the ways in which local authorities fulfil their roles. If all we do is create new Unitary Authorities that look and feel like larger districts and smaller counties then we will have missed a real opportunity to transform.

Finally, culture has a significant impact on power and influence over public service provision. Multiple cultures exist (personal, professional and organisational) that can sometimes mean that our overarching public service ethos and public purpose become secondary to organisational demands and pressures.

We should think more about the people and places that we serve and less about the organisations to which we belong.

Andrew Burns

Independent Associate, IMPOWER.