High priority thinking?

In recent years, “doing more with less” has been the catch cry in a public sector tasked with managing within fixed financial baselines. The mantra has done its dash. Many agencies have achieved most of what they can through efficiency savings and further gains through cost cutting will be at the margins. The time has come for a more difficult conversation – doing the same with less and, perhaps, stopping doing some things altogether.

Yes, we know it’s easy to say, but hard to do. Agencies find it very difficult to stop doing things. It can be perceived as an admission of failure, and may reduce the scale or scope of management responsibilities leading to negative impacts on career progression. And it may require redundancies which are difficult to manage, create a range of risks and are unpleasant. It’s also politically difficult, especially in an election year.

So it is not surprising that many parts of the public sector appear to have a “cost plus” mentality. Nevertheless, the fact is that, while there are other options to reduce costs, the most effective way to achieve lasting savings is to prioritise services, and make decisions on doing more of some things and less of others. We need to be having more conversations about reducing low priority/less effective activities to fund high priority / really effective priorities.

Over the past few years a range of methodologies have been developed to help guide decisions in the public sector: BPS (Better Public Service) result areas; 4YPs (Four Year Plans); LTIPs (Long Term Investment Plans); BBCs (Better Business Cases); and others. These are all great steps, but they tend to focus on new investment and don’t help us with decisions about existing expenditure. To make decisions on reducing or stopping activities or services we need to assess the relative value of existing activities and services. But how do we do this?

Most agencies have developed prioritisation matrices to guide internal capital decisions and these are sometimes used to guide operating decisions. They include factors such as policy changes, legislative compliance, health & safety and supporting critical business systems. They may also include links to supporting agency strategies. But they don’t help us assess relative value. We need to develop guidance in this area. This could be developed by looking at:

• Empirical research. There are pockets of valuable research occurring in education, welfare and other areas which could provide models for the rest of the public sector.
• Links to agencies’ goals. This was previously called “intervention logic”, but seems to have fallen out of favour in recent years. Consideration should be given to re-energising intervention logic.
• Existing prioritisation matrices. The best of existing capital investment matrices could be cherry-picked.
• Precedents. Examples of what has been achieved in other agencies, countries or jurisdictions.

But it will need more than good analytics; leadership and determination to implement changes and see these through will be just as important.

We think this is an area where there are huge opportunities to improve performance. Time would be well spent developing a framework to guide decisions on the resourcing of existing activities and services. It’s quite a challenge. Then again, worthwhile things are never quick or easy, are they?