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Ebony Hughes

Reflecting on Public Finance Live 20: building confidence to deliver ‘good’ savings

This week, CIPFA brought together the movers and shakers from public sector finance to discuss and share insight around this year’s theme, COVID-19: Road to Recovery. While we missed seeing familiar faces and catching up over lunch, we were still very pleased to be able to host a workshop titled Better outcomes cost less – delivering ‘good savings’ in complex systems. It all felt rather different speaking to our webcams rather than to a room, but we were delighted with the level of attendance, engagement and debate. Our session described how good savings are now more essential than ever, but even harder to achieve given the scale of financial distress.

We also shared impact of our work in Oxfordshire, Bristol and Ealing, and highlighted our Valuing Care programme as one example of an innovative approach that delivers better outcomes for children and families and reduces costs.

We conducted polls with participants during our workshop. A strong theme that emerged was confidence – the role it plays in successful transformation, and how to create it. One of the questions we asked attendees was about the proportion of savings they were confident about delivering in FY21/22. Rather inevitably, given all that has happened during 2020, only 10% responded with 75-100%.

Not all savings made across public services are ‘good’ savings. We consider ‘bad’ savings to be those that release cash in the short-term, but have a longer-term negative impact on outcomes, in turn impacting future cost and demand. For example, making a cut to an effective preventative service leads to a budget reduction but ultimately leads to demand in social care or housing, which sees cost rising longer-term – a false economy.

So what drives organisations to make ‘bad’ savings instead of ‘good’? Often, organisations make ‘bad’ savings as the cash can simply be taken out of the budget, so there is confidence it will be delivered. Given the scale of the financial gap and the level of confidence in delivery shown in our poll, it is unsurprising that such approaches are taken.

Arguably ‘good’ savings would prevail if there was greater confidence that they would be delivered. How can you create that confidence?

  1. Show that the opportunity is real. There is a need to provide evidence that demand can truly be reduced and which pot the money will come out of.
  2. Invest time and use insight to achieve buy-in from those who lead the delivery. If they themselves don’t believe in it, why would others? With shared ambition comes the confidence to act.
  3. Ensure the required tools and approaches are in place. To be confident in the delivery of savings, frontline staff must be supported and have the necessary tools and approaches to enable them to work differently.
  4. Recognise that sustainable change does not happen overnight, track impact. Regular communication about timescales and impact reinforces confidence, and provides the intelligence needed to act confidently when we need to adjust the approach.
  5. Test and refine your approaches. Too often we go from a paper-based plan to big delivery. It is much easier to deliver savings after having trialled and developed an idea. These initial results will naturally build confidence.

Building confidence is incremental, intensive and requires working within complexity. Delivering good savings is far from easy, but will ultimate create a much more productive and resilient organisation – one that is able to deliver better outcomes that cost less.

If you would like to find out more about how our approach enables you to differentiate between ‘good’ and ‘bad’ savings, watch the video of our workshop at Public Finance Live when it is made available, or get in touch.

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