Shrinking budgets and growing population are 'climate change' for public finances

Will Green is news editor of Supply Management
16 December 2014

Shrinking funding and a growing, ageing population represent “climate change” for public sector finances.

James Johns, director of strategy at HP, told a conference it was not possible to “salami slice our way” out of the problem and more fundamental reform was necessary.

Speaking at the Government Procurement Summit in London, he said public sector expenditure as a percentage of GDP was down to 36 per cent.

“The proportion of public sector expenditure in terms of GDP is heading down,” he said. “This is an unsustainable position for anyone who works in the public sector. This is climate change in public finances. We can’t salami slice our way out of it.”

Johns said scarce resources, increasing demand and rising citizen expectations were the key challenges.

He told delegates that under a traditional model of service delivery, departments worked in silos, services were delivered passively and problems were fixed as they arose.

Johns said this had to change to a model of partnership between departments, challenges to passivity and acting to prevent problems before they happened.

He said technology offered solutions to these issues by cutting costs and increasing the potential for personalising services.

“Cloud computing is fundamentally about sharing computers. That can help lower costs,” he said.


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