Interserve Press Office | Aug 08, 2013
YouGov research, commissioned by Interserve, highlights the impact of austerity on frontline services in health and local government. 42% of health and local government organisations surveyed expect to make budget cuts of 11% or more by 2016 and 58% believe outsourcing will be important to maintaining services in this challenging economic climate.
Today Interserve, the international support services and construction group, has published a report that examines the outlook of public services provided by local government and the health sector. Click here to download the full report.
The research polled 384 senior decision makers for public services revealing that many are experiencing, or expect, reductions in both available funding and the quality and range of frontline services.
Significantly, 42% of health and local government organisations anticipate funding cuts of 11% or more by 2016. Of those expecting budgetary cuts (74%), 38% expect them to lead to the outright removal of certain frontline services. Furthermore, specifically in health, 34% believe they will not have achieved their budgetary targets by 2016.
In the same vein, 27% of all those polled in health and local government expect headcount reductions of greater than 11% by 2016 and 65% anticipate a fall in available funding for training and skills development. 51% believe that spending on environmental and sustainability initiatives will fall, with the trend being even more noticeable in local authority respondents, of whom 63% think a reduction is inevitable.
Many respondents (34%) note that a strategy for dealing with budget cuts is yet to be developed; however, 58% believe that outsourcing to the private sector will be at least slightly important in meeting budgets and maintaining service levels.
Whilst recognition of the importance of the private sector is fairly high, a number of public sector decision makers note there are significant barriers to outsourcing, with a lack of trust (31%) and political concerns (38%) listed as some of the main obstacles.
Adrian Ringrose, Chief Executive of Interserve commented: "The report highlights not only the fiscal constraints health and local government services find themselves operating under but also with growing demand for services – the need to do more for less. Budget cuts, which in previous years have focused on back office services, are now anticipated to affect more and more frontline services, and that affect will be noticeable.
"In the face of budgetary constraints, we believe there are alternatives to cutting services, and outsourcing can help. The industry needs to continue to work together with public and third sector organisations to redesign service delivery so that it meets the needs of the community. Through intelligent design, we believe it will be possible to maintain and improve critical frontline services.
"Outsourcing can benefit communities through business investing in skills development and sustainability initiatives that the public sector is currently unable to fund. For instance, through the inclusion of apprenticeships and local supply chain targets in government contracts, public services can have a wider positive social impact. This is something we feel strongly about and are actively engaged in at Interserve."
Results by sector
- Local authorities, on average, have achieved a 10% improvement in efficiencies in their property and facilities portfolio since 2010. They anticipate making 17% savings by 2016 and 22% by 2020
- Respondents anticipate making budget cuts of up to 13% right across their council by 2016, and 34% feel they would be unable to meet these targets in their entirety
- Many local authorities expect to see a significant reduction in services with adult social care and recreational and cultural facilities, such as galleries, parks and playgrounds, among those commonly mentioned as most likely to be cut. Finally, respondents within local authorities expected, on average, a reduction in headcount of 8%
- 90% of respondents believe that working and sharing services with other local authorities was likely to bring benefits
- The top 5 barriers to outsourcing are local political concerns (44%), commissioning and / or contract management capability (34%), lack of trust (31%), lack of capacity (24%), and financial limitations (17%)
- Of those aware that the Social Value Act impacts their organisation (56%), 23% think it will safeguard social requirements, 17% it will make the commissioning process more complex, 9% it will provide clear and much needed guidance, whilst 5% believe it will put up procurement costs.
- Despite ring-fencing, those polled under the survey report they expect a 2.5% decline in overall budgets by 2016, although a quarter (24%) of respondents report an expected increase
- In response to lower budgets, 48% of those respondents facing cuts say they are still developing a strategy to deal with these reductions
- 76% of healthcare respondents facing cuts believe changes in funding will have a negative impact on the delivery of services, citing the increasing complexity of funding structures and overall budgetary reductions as the principle drivers behind this. Acute care was mentioned by many of the respondents as the area they expected to suffer most from reduced budgets. Community care and mental health services were also believed to face reductions in the availability and quality of delivery
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YouGov interviewed 384 senior managers across four separate groups, between May 29th and June 17th 2013. The number of interviews completed with each group were as follows:
- Local councils: 126
- Health: 122
- Universities: 85
- Housing associations: 51
Interviews were completed online and anonymously, using YouGov's secure survey system. The sample included:
- Chairmen/Deputy, Chief Exec/Deputy, or Chancellor/Vice: 55
- Other Board members: 72
- Heads of department/other senior managers: 255
Interserve's vision is to redefine the future for people and places. It is one of the world's foremost support services and construction companies, operating in the public and private sectors in the UK and internationally, offering advice, design, construction, equipment, facilities management and front-line services. Interserve is based in the UK and is listed in the FTSE 250 index. The Group employs some 50,000 people worldwide and in 2012 generated gross revenue of £2.3 billion.
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