The State of the State 2014-15
Driving Public Services Forward
Our report, The State of the State 2014-15 – Government’s Inflection Point, published in association with Reform, finds the UK government moving towards a historical point. We believe, in the next five years, the UK's governance and our experiences of the public sector will change beyond recognition.
Small state. Big impact
The UK is half-way through a radical fiscal consolidation which is reducing the size of the state. Its impact on public services will be profound. With the toughest decisions yet to come, governments globally are watching as our public sector – a world leader in reform – seeks a new model for the modern world.
This year's report, the third in our State of the State series, finds:
- Deficit reduction is on track
- The UK public sector is recognised globally for its efforts to make the modern state more affordable
- The state needs to help the public sector deliver more with less
- Government needs to return public sector net debt to pre-crisis levels
- 80 per cent of the coalition’s deficit reduction plan involves public spending cuts – it’s broadly on track, but the 2015 spending round will be hard to deliver and will have profound implications for many public bodies
- Senior executives in local public services are proud of their record in managing the cuts so far - however, many are worried about organisational and service failure in the future
We prepared our State of the State 2014-15 report in conjunction with our study into local public services entitled Determined, realistic and focused.
Key challenges facing government
The government faces four major challenges:
- Recast the UK’s governance in the wake of the Scottish referendum
- Finish fiscal consolidation and support public services through profound budget reductions
- Drive continued economic growth
- Bolster national security
Where the government should focus
To complete its deficit reduction plan successfully, we believe the government must focus on three strategic areas:
- Debt reduction – assessing policy decisions for their impact on debt and liabilities
- Productivity - supporting the public sector in making productivity gains
- Talent - reductions in public sector staff make it more important than ever to have the right people with the right skills in the right jobs
The State of the State in numbers
Our report revealed some eye-watering numbers, such as:
- £1.6 billion - the value to the public purse for every one per cent of public sector staff time saved through a productivity measure
- £1 billion – what the UK currently spends on debt interest per week – more than it spends on education
- £1.63 trillion - the state’s net liability at last count (2012-13) – an increase of £283 billion year on year and the biggest rise since the start of public sector-wide accounts in 2009-10.
- 2044 - the year the UK’s spending on servicing debt will overtake spending on public services if it doesn’t eliminate the deficit.