TPP analyses Pre-Budget
Report – Implications for Public Services
We thought you would be interested in a quick ‘heads up’ on the implications for
public services contracts and partnerships of yesterday’s Pre-Budget Report.
Light on detail
Alistair Darling’s pre-budget report was dominated by 2 themes – the recession,
with its impact on the economy, tax receipts and public borrowing and of course,
the forthcoming General Election. Public sector borrowing is forecast to
reach £178bn
though some commentators predict a figure closer to £200bn. Financial markets (and
voters) will be looking for evidence of a clearer plan to bring this under control
to avoid interest rate rises and currency fluctuations.
Tax receipts have declined by 13% in this fiscal year – mainly from corporation tax. The Government therefore needs to make savings of around £5bn in public spending
in 2010-11, and to raise taxes. In 2011-12, there will be further tax rises of around
£7.5bn and further cuts of around £5bn.
Key points
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Overall departmental spending in 2010-11 will be maintained as planned to help support
the economy through recovery. But, spending growth will reduce sharply from 2011-12
onwards. |
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1% cap on public sector pay settlements in 2011 -12 and 2012-13, delivering £3.4
billion of savings a year from 2012-13 onwards. Reforms to public sector pensions
to save £1 billion a year from 2012-13 onwards. |
Health
In 2011-12 and 2012-13, 95 per cent NHS front line spending rises in line
with inflation, but value for money savings of around 310 billion per year will
be delivered by 2012-13 through the Public Value Programme, Operational Efficiency
Programme and other value for money initiatives, by:
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improving how the NHS buys services for patients and adjusting the price it pays |
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delivering more efficient, integrated and people-centred community and mental health
services, and transforming the delivery of care to those with long-term conditions;
and driving down back office and procurement costs. |
Education
Over £800 million of efficiency savings to be achieved in front-line areas
by 2012-13, including from increased collaborative procurement of goods and services
and rationalising back-office costs. No specific mention of the BSF programme.
Local
Government
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The Government will bring forward more detailed proposals in the
New Year that deliver
a “fair, fiscally sustainable” social care system that addresses both rising expectations
and the changing demographics of the UK population in the coming decades. |
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local authorities to be allowed to make more use of their trading powers to create
further commercial opportunities; new guidance on effective use of joint ventures
by local authorities and their partners by February 2010; and considering single-area
based capital pots with recommendations by Budget 2010. |
Infrastructure Spending
Government
will focus capital spending in the next Spending Review in the areas where it generates
high economic returns. A new body Infrastructure UK will: develop a strategy for
the UK’s infrastructure over the next 5 to 50 years, to be published at Budget 2010;
work closely with infrastructure developers and funders to make recommendations
at Budget 2010 to stimulate increased private sector investment in infrastructure,
focusing on unlocking new sources of private capital and developing new funding
models, building on the success of PFI/PPP.
Making government
smarter
£12 billion a year of savings from “smarter government” and £11 billion a year of
these savings will be delivered by 2012-13. £8 billion of the £11 billion to be
delivered by 2012-13 are savings identified through the Operational Efficiency Programme
(OEP), through improving back-office functions, IT, collaborative procurement and
savings on property running costs.
£550 million savings to come from local government,
including more efficient waste collection and disposal, reducing the burdens of
inspection, and measures to reduce duplication and inefficiency between different tiers of local government.
Asset Portfolio: £16 billion to be delivered from
asset and property sales by 2013-14.
Now is the time to look at new delivery models
In the light of the current fiscal restraints and
continuing search for efficiency savings, there has never been a better time to
explore new delivery models for public services. TPP Law has wide-ranging expertise
in successful outsourcing of services, joint venture models, shared services partnerships,
arms’ length trading vehicles and social enterprises in education, health, social
care, leisure and support services. If you would like to discuss the options do
get in touch:
mark@tpplaw.co.uk
020 7620 0888 or 0161 480 1616.
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For More Information Contact:
Mark Johnson
TPP Law Limited
53 Great Suffolk Street
London SE1 ODB
t 020 7620 0888
f 020 7620 0778
e info@tpplaw.co.uk
Email: Mark
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