Member Article

Public Sector set for financial challenges

The Public Sector is set to face serious financial challenges over the next year, according to business advisory firm Deloitte.

In the State of the State 2012 survey, Deloitte found that £9503 is spent by the public sector per person across the North East, a rise of 8.5% since 2006. This consisted of £2155 on health per person, £1448 on education, £4418 on welfare and £1782 on other public services.

Paul Thomson public sector lead partner at Deloitte in Newcastle, said: “Our analysis looks at government data though a business lens. It is clear that, at a local level, the public sector faces some significant challenges and opportunities in the coming years.

“Maintaining the picture of public spending outlined in The State of the State will be challenging against a backdrop of changing business models, tightening budgets and a greater emphasis on local delivery of services. Finance managers in the public sector need to think about how they can adapt.

He is now recommending that the region adopts a more business-like way of thinking, using assets more efficiently, reducing fraud and improving cash management, which will help the public sector to become more efficient and effective.

Central Government also needs to look at how it can increase non-ring fenced funding to councils and see through their ambitions on local delivery of public services.

Andrew Haldenby, Director of Reform, added: “Eliminating the deficit in this Parliament is only half the battle.

“The UK needs continued austerity in the next Parliament, and very likely beyond, to get the national debt down to safe and affordable levels.

“That must mean tough decisions on health and welfare entitlements, plus a rigorous reform of the public sector workforce in order to transform its productivity.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .