Government wastes £10bn patching up public services

More than £10bn of taxpayers’ money is being wasted because the government continues to ignore emerging warning signs on key public services, allowing pressures to build—and then diverting emergency cash to the frontline when a crisis emerges.

This wasteful cycle is highlighted in new analysis from the Institute for Government and the Chartered Institute of Public Finance and Accountancy (CIPFA), published on 19 October. Worryingly, Performance Tracker, our data-driven analysis of nine public services - across health, education, law and order, neighbourhood services and immigration - finds that this emergency cash isn’t being used to solve the underlying issues in these services, but is simply keeping them going in their current state.

Prisons, for instance, are in the middle of a serious operational crisis after a failure to spot warning signs in the data when the government doubled down on cuts to the Ministry of Justice (MoJ) budget in the 2015 spending review.

Assaults on officers are up 124% on 2009 levels, and incidents of self-harm have risen 17% in the last year alone. Extra prison officers are being recruited, but that will take time. Prisoner numbers rose more than expected over the summer and there are no signs of policy changes on the horizon that would reduce the prison population.

The government has a clear imperative to act at the budget, but it has few options. It needs to continue recruiting and retaining prison officers as a matter of urgency.

The chancellor also has little room to manoeuvre on hospitals, which will continue to run deficits. Despite these overspends, accident and emergency waiting targets are still being missed, and the number of people waiting for elective surgery is the highest it has been for a decade. Demand continues to rise with emergency accident and emergency admissions up 3% in the last year, and 30% since 2009.

It may be too late to act in time for this winter, but taking steps to make good on the transformative promise of Sustainability and Transformation Plans (STPs) – supporting different local health and social care services to work together - will help to break out of the current cycle.

The government has already made cash injections in schools and adult social care- but these are little more than sticking plasters.

Schools have not faced the same degree of demand or spending pressures that we see in other services, with spending broadly keeping pace with rising pupil numbers, but in July the government still needed to find £1.3bn to soften the blow of controversial changes to the schools funding formula. This will only last for two years, and it isn’t clear what will happen when the plaster is pulled off.

Following the controversial Conservative manifesto commitments on adult social care, the promised green paper on the issue has been downgraded to a consultation, to begin at some point in the new year. It’s hard not to see this as delaying the inevitable. The government needs to start preparing the ground for future changes if it doesn’t want to refight these battles or return with more money in a few years’ time.

More information is needed in some services - either to understand long-term options, or to be clearer on the actual state of public services.

We know that police forces are under pressure from rising workload, with the volume of emergency calls having risen 11% in the last year. The demands on police are also changing, with last year’s 5.2m incidents of cybercrime - nearly equalling the total number of other crimes put together - being of specific concern. But we need more evidence about the best ways of dealing with changing crime.

As for local neighbourhood services like roads and potholes, we simply need more data. Little data on the scope and quality of these services are held at the national level, meaning Whitehall is unable to understand the performance of locally delivered services - and the ability of local government to deliver further efficiencies.

The upcoming budget will be indicative of the Chancellor’s approach to these key public services. But the crisis, cash and repeat cycle of spending decisions to date is unsustainable: change will come to these services one way or another.

Without action to change the way these services are delivered or paid for, the government must accept that it will either fail to deliver their planned spending controls, or that the public will see the quality of those services deteriorate.

Alice Lilly is a researcher at the Institute for Government and a co-author of Performance Tracker.

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