Blog by Bridget Taylor , Director of Strategy and Engagement, BT Local and Devolved Government
As the seasons change and autumn approaches, most councils begin the annual round of budget setting where options for reducing services are weighed against each other and officers and members have to grapple with achieving what is often the least worst outcome. Having been part of that annual process for many years and knowing the size of the reductions that will be required again this year, I am struck by the different approach that is taken to managing costs in the private sector and how this creates a real tension in operating partnerships.
The key differentiator is the amount of time spent managing costs. For the private sector this is critical to driving profit and shareholder value so there is a relentless focus on looking at this and targeting managers to make the money work for the business without compromising customer satisfaction. For the public sector the focus is much more on setting a budget to deliver a level of service that is not always specified and reviewing spend against that aiming not to go over budget. When you apply these different approaches to partnership arrangements, it can create dissonance between the partners as the consequences of each system play out.
We rightly spend a lot of time focusing on contractual and performance indicators when forming private/public partnerships. I wonder if a little more time spent on understanding and learning from our respective approaches to managing finance might build better outcomes for the taxpayer and shareholder.