Public Sector Future

The think tank Reform recently published a report on the future of the public sector workforce which, amongst other things, discusses how many jobs are destined to become automated and undertaken by robots. The report was covered in this Independent article.

I will not pretend to have read the whole report, but seeing as in essence it discusses privatisation at some length, I'm surprised that the probation omnishambles doesn't seem to get a mention, beyond this:-

Despite GDS working to disseminate agile thinking (through the Government Service Design Manual, for example), there is some way to go to fully permeate public services. Again, leaders have not set the right framework. In 2013, for example, then Secretary of State for Justice, Chris Grayling, claimed that government may be justified in bypassing information collection when making policy when he argued: “The last Government were obsessed with pilots. Sometimes those in government just have to believe in something and do it”. Furthermore, the NAO has identified that past attempts to install agile working have been hampered by staff looking for sign-off from senior members of the team – a strong cultural barrier to change. 

Work in progress. Towards a leaner, smarter public-sector workforce.

Executive summary 

The public-sector workforce is central to the successful and efficient delivery of public services. Accounting for more than half of day-to-day public expenditure it is essential that its size, structure and skills are continually evaluated, and updated to deliver public services that meet the changing needs and expectations of users. Although the workforce’s size has changed over the last half a century and more, it has not always been organised around the needs of users. Designing a workforce capable of meeting people’s needs and expectations today and in the coming decades should be a key aim of government. 

Today’s public-sector workforce 

The size of the public-sector workforce has oscillated considerably during the last six decades. It stood at 5.3 million in mid-2016, and has been falling since 2009, when it stood at 6.4 million. The latest figure is 20 per cent lower than its 1979 peak. 

Today’s workforce is the product of a series of decisions in the post-war period. Since 1960, the size of the workforce has fluctuated with the economy and with the prevailing ideas of the time. Keynesian demand management saw an expansion in the 1960s and 1970s. New Public Management, including the introduction of quasi-markets, led to a sustained fall in the 1980s and 1990s. Numbers recovered under the “Third Way” of the Blair Government, only to fall again after the 2008 financial crisis and the Coalition Government’s aim to reduce public expenditure. 

Internationally, the UK public sector directly employs a greater proportion of workers than the OECD average, according to the latest figures (2013). New Zealand, a country which outsources a comparable amount of services to third-party providers, employs 62 per cent fewer workers as a proportion of its total workforce. 

The UK public-sector workforce also differs from the private sector. On latest figures (2014), public-sector workers are on average older than those in the private sector; more qualified; more likely to be female; more likely to have longer tenures; and less likely to be well motivated. 

The value-for-money equation 

Current pressures mean the public-sector workforce must undergo radical change to deliver better value for money. 

Tight public spending means that public-sector productivity must break from its 20-year trend of near-zero growth. At the same time, the demands on public services are changing rapidly. An ageing population, with increased prevalence of chronic conditions, requires a new way of delivering health and social care. In January 2017, experimental statistics showed that there were 5.2 million examples of fraud and computer misuse offences in the year ending September 2016, almost as many as the 6.2 million traditional crimes. 

Citizens want much better digital access to public services. Around a third of people say that they would prefer to book GP appointments online but fewer than 10 per cent have done so. Three-quarters of people have said that they want digital communication with the police, but only half that number have said it is currently possible. New subscription services, delivered by private-sector providers, provide immediate access to GPs via video consultations to 350,000 people in the UK.

Barriers to achieving value for money 

The policy challenge is to remove the barriers that prevent public-sector workforces changing in the interests of citizens and their own staff. 

Public-sector leaders do not have freedom to reshape their workforces. For the police, the ban on compulsory redundancies for officers meant that recent job reductions fell too heavily on police staff, leaving officers in roles that staff should fill. 

Some public-sector workforces are bottom-heavy. In primary care, there are 10 receptionists for every 14 clinicians, and almost one per GP. In secondary care, 18 per cent of employees fill administrative roles. Thirty-seven per cent of civil servants fill defined administrative roles. 

Many follow an old-fashioned management model involving multiple layers of hierarchy. Interviewees for this paper spoke of a “frozen middle”, that is managers in middle layers who are unwilling to execute ideas without guidance from above. All Whitehall departments have more than the eight levels of employee grades, seen as the maximum for well-functioning public-sector organisations. 

The National Audit Office and Parliamentary Select Committees have consistently highlighted skills deficits in technology, commercial skills and leadership in recent years. Soft skills, such as innovation and motivation, are equally important. Poor motivation reduces productivity and may be a cause of absenteeism. In 2014, the average publicsector worker took 8.1 days of sick leave, compared to 5.1 days in the private sector. 

Tomorrow’s public-sector workforce 

Structure 

In the future, a less hierarchical model, which exploits advances in technology, will help managers develop a leaner and better performing workforce. 

Some public services are already delivering this vision. HM Revenue and Customs (HMRC) has reduced its numbers of administrative staff from 96,000 to 60,000 over the last decade through expanding online services and providing better real-time information. It aims to reduce 11,000 more, as it aims to become “diamondshaped”. Reductions of jobs must be done strategically, however, as a better way of working, rather than salami slicing roles to make savings. 

By following this approach, Whitehall, the NHS and police can reduce headcount significantly. According to often-cited analysis by Oxford academics Frey and Osborne, many routine administrative roles have a 96 per cent chance of being automated by current technology. Applying their calculations to current public-sector numbers suggests that over the next 10 to 15 years, central government departments could further reduce headcount by 131,962, saving £2.6 billion from the 2016-17 wage bill. In the NHS, Osborne and Frey’s most conservative estimate reveals that 91,208 of 112,726 administrator roles (outside of primary care) could be automated, reducing the wage bill by approximately £1.7 billion. In primary care, a pioneering GP provider interviewed for this paper has a clinician-to-receptionist ratio of 5:1, suggesting a potential reduction of 24,000 roles across the NHS from the 2015 total. In total this would result in 248,860 administrative roles being replaced by technology. 

For many other roles, new technology will increase productivity. McKinsey estimates that 30 per cent of nurses’ activities could be automated, and a similar proportion for doctors in some specialities, enabling those skilled practitioners to focus on their non-automatable skills.

Some technology will improve public-service delivery. Various companies aim to develop artificial intelligence that can diagnose conditions more accurately than humans. The UK should evaluate drones and facial-recognition technology as alternatives to current policing practice, while recognising concerns about the holding of people’s images. 

Even the most complex roles stand to be automated. Twenty per cent of public-sector workers hold strategic, “cognitive” roles. They will use data analytics to identify patterns – improving decision making and allocating workers most efficiently. The NHS, for example, can focus on the highest-risk patients, reducing unnecessary hospital admissions. UK police and other emergency services are already using data to predict areas of greatest risk from burglary and fire. 

Whitehall should move from hierarchy to “self-management”, with teams organising themselves around tasks that need to be done. The Government Digital Service (GDS) has done this to great effect, such as when a 16-person team designed GOV.UK in 12 weeks. Other departments and arm’s-lengths bodies – from the Crown Commercial Service to the National Crime Agency – could follow. 

Skills and motivation 

The public sector should ensure that it populates roles with the skills necessary to exploit technology and fill long-standing gaps in commerce and procurement. Just as importantly, public services should seek to develop non-traditional skill sets such as creativity, learning from errors and self-improvement. 

This requires strong leaders, some drawn from the private sector, to change organisational culture. Shared kitchens and feedback boards, for example, enable the spontaneous interactions that will support a new culture of public-service innovation. 

The new public-sector culture must also see mistakes as an opportunity for feedback and improvement. Leaders, including politicians, are wrong to “bury” critical reports where that criticism is a valuable insight into public service operation. The NHS is the best current example of this kind of reform. Made independent from NHS England, the Healthcare Safety Investigation Branch should allow clinicians to report mistakes without fear of censure. A greater use of randomised-control trials through public services will provide much-needed evidence to improve decision-making. 

Leaders need the flexibility to change organisations, including the ability to motivate individual workers in ways appropriate to them – whether “intrinsic”, for example driven by personal satisfaction in the task, or “extrinsic”, driven by external rewards such as remuneration and reputation. The target regimes that still operate in public services, notably the NHS, undermine both leaders and the motivation of front-line staff. 

Performance management can be improved through a focus on immediate feedback rather than cumbersome annual appraisals. The NHS e-portfolio, an online appraisal system for junior doctors and nurses, allows employees to request real-time feedback. A system that allows managers maximum discretion in tailoring this feedback could be a model for other services to follow. 

Recruitment 

Securing the right people to deliver these services will be essential. The public sector should be an attractive employer to people of all ages. Some will be attracted by the chance to improve people’s lives through their work. Others will want to develop their skills working on the complex problems that public services must solve. 

Leaders will also need flexibility over remuneration to build successful workforces. HMRC and the Ministry of Defence have both created new “government companies” which have some freedoms from public sector pay limits. Academies and foundation trusts have theoretical freedoms to vary pay, although these are rarely used in practice. True flexibility will come when public-sector organisations can manage their pay within a given envelope.

Recent efforts to improve recruitment have focused on high-cost approaches such as attracting high-achievers (such as Teach First) or turning public services into graduateonly professions (such as nursing). It is likely that a greater use of apprenticeships could provide a more skilled and diverse public-sector workforce, and reduce levels of overqualification, at better value for money. The public sector only employs 1.7 per cent of its workforce as apprentices, compared to 2.3 per cent in the private sector. The creation of the public-sector apprenticeship target means local authorities could have to offer six times more apprenticeships than they currently do. Done right, this represents an opportunity to improve their skills base.

Flexible and temporary employment have been growing for decades, but the emergence of the ‘gig’ economy, with workers supporting themselves through a variety of flexible jobs acquired on online platforms, has gained traction (and controversy) recently. ‘Contingent labour’ platforms – trialled in social care – may suit hospitals and schools as an alternative to traditional agency models. It may also suit organisations who face seasonal peaks of demand, such as the need for HMRC to recruit additional capacity at the end of a tax year. 18F, the American version of GDS, has recruited coders for specific tasks by allowing them to bid for work at lower prices, in a reverse auction. Using such platforms in the public sector would show its commitment to delivering working practices fit for the twenty-first century. 

Recommendations 

1 Automate administrative roles where appropriate, including in the Civil Service to make Whitehall “diamond-shaped”. Employ technology to improve the efficiency and quality of front-line and strategic roles. 

2 Disrupt hierarchies through fewer management layers and self-management models. 

3 Cultivate a learning environment by empowering leaders to learn from mistakes, rather than attribute blame. Public services should make better use of randomised-control trials and agile working patterns. 

4 Empower leaders to motivate employees as they see fit, unencumbered by rigid pay and performance management structures and role definitions. 

5 Introduce new recruitment patterns, including targeting non-traditional entry routes, such as apprenticeships and digital contingent-labour platforms, to attract a wider skill base.