The State of the State 2016-17

Brexit and the business of government

This year’s State of the State finds the UK Government moving from an era of challenge around one objective – eliminating the budget deficit – into an era of multiple and complex challenges. The next five years will see additional demands on the public sector as it manages the UK’s departure from the EU, continues to drive major reforms and maintains business as usual.


The State of the State report provides a unique, independent analysis of the UK public sector through a business lens. Produced in collaboration with think tank, Reform, the insight is informed by interviews with public sector leaders, citizen research and an in-depth analysis of government data.

For a discussion on the report findings and the Autumn Statement register for our webinars.

The citizen and the state survey

A survey of 1,000 people found seven key findings including:

  • 41% of citizens expect public services to worsen because of Brexit
  • Public support for taxes to fund public spending is on the rise, for the first time since the 1990’s
  • 57% feel that the NHS is the top priority, compared with Brexit at 33% 
  • A digital divide exists amongst citizens by age and social class.
The citizen and the state survey

In the words of public sector leaders

Public sector leaders say:

  • Brexit will impact on funding, the workforce, priorities and local economies 
  • Digital transformation is struggling to meet the ambition
  • Collaboration and workforce flexibility are key characteristics of the future public sector
  • Leadership will be challenged to become more effective, high profile, diverse and continually renewed.
In the words of public sector leaders

Government through business lenses

Government is not a business. But applying ‘business lenses’ to the public sector can allow for distinctive perspectives and fresh thinking.

The productivity lens: Ten elements of public sector productivity are exposed to Brexit including public spending levels, Whitehall’s capacity and capability, workforce arrangements and research funding in higher education

The talent lens: automation is set to save the government £17bn by 2030 and will drive the use of data to support decision makers

The balance sheet lens: The UK Government’s latest balance sheet shows £1.46 trillion of assets and liabilities of £3.56 trillion. The state’s net liability rose by £263 billion to reach £2.1 trillion at last count for the 2014-15 financial year.

Government through business lenses

The state of the public finances

Four questions arise from Brexit as the Government considers its fiscal options:

  1. Will the mandate or the objective change? 
  2. Will infrastructure spending replace austerity as the dominant fiscal theme? 
  3. Will Brexit compromise or support public sector transformation? 
  4. Will the Government continue to run a deficit and increase its debt?
The state of the public finances

Government in numbers

  • 5.3 million – people employed by the UK public sector
  • 73 – UK members of the European Parliament
  • 17.4 million – the number of people who voted to leave the EU
  • 716 billion – Government income in 2016-17
  • 722 billion – Government spend in 2016-17
Government in numbers

Governments of the UK

Observations on devolved administrations include:

  • Northern Ireland is on a promising path but is uniquely exposed to Brexit and leaders will need to be fully engaged in Brexit negotiations as they unfold
  • The EU referendum has marked a second inflection point in Scotland’s relationship with the UK. Scottish government policy continues to diverge from the rest of the UK in its approach to public spending and public sector reform
  • The central questions for the Welsh government in Brexit negotiations are whether trade deals will support Welsh export industries and whether the UK government will replace EU funding streams.
Devolved governments of the UK

Register for our webinars

03 November at 13:00 to 14:00
The State of the State 2016-17 – Brexit and the business of government
A panel will discuss the key findings from the report. Includes a Q&A session.
Listen to the session 

24 November at 13:00 to 14:00
Assessing the Autumn Statement
A panel will discuss the outcome of the Autumn Statement. Includes a Q&A session.
Listen to the session

2016 SlideShare report

Previous reports

State of the State 2015 - Recalibrating government

State of the State 2014 - Driving public services forward

State of the State 2013 - In search of affordable government

Did you find this useful?