Introduction

Resource Optimisation enables public sector managers to identify opportunities for rationalisation and redeployment of resources (people, funding and assets) to meet strategic priorities whilst delivering cashable savings by reducing effort on lower priority activities. Savings can be identified quickly and easily, but importantly the full impact of making cuts can be immediately assessed and communicated.

The UK is in the worst financial crisis in living memory. Public sector budget cuts have been targeted by all political parties. But public demand for services will not reduce, creating ever greater pressure to deliver more with less. Ministers will demand leaner, cheaper but still viable organisations. This will require a new way of managing resources with agile and rapid responses. Successful managers will be able to demonstrate understanding, ability and accountability for optimising their resources.

The Prime Minister's intent is to avoid "indiscriminate cuts" and protect "frontline services", but the Chancellor has confirmed he has no means of making sophisticated cuts. The "salami slicing" of previous eras will not be tolerated by a better informed general public that expects frontline services to be protected at the expense of, what they perceive to be, bureaucratic back offices and policy staff.

Resource Optimisation (RO) is an innovative new approach, founded on leading edge, best practice developed with a number of high profile departments and agencies, that enables public sector managers to remain ahead of the curve and react in a rapid and structured manner to these pressures for change.

The benefits are compelling

The most recent pilot in LB Enfield has produced amazing potential for savings from examination of 120 policy and performance staff costing circa £5m :

  • Smart Working opportunities for 43% of the staff, representing a potential saving of £200,000 on estate costs
  • Identification of 11 FTEs effort on tasks that could be stopped with little or no adverse impact, amounting to £500,000
  • Identification of 46 FTEs of work that could be completed using 80% of the current effort without incurring any risks to outcomes or outputs — a potential saving of £400,000
These potential savings were identified by managers and staff themselves, with Basis support after the work area had been subject to a Lean review.
For more information please read the case study here.

Other Public sector organisations that have applied RO have achieved:

  • 80 FTE savings on a total headcount of 1,700;
  • £13m savings on a total budget of £148m (circa 9%);
  • 7% productivity gains in a highly pressurised and overloaded working environment.

The business case is clear

  • The new government will consider curtailing major programmes of investment e.g. Trident, Crossrail, NPFiT, etc. but this will avoid costs rather than deliver cashable savings;
  • but the bigger prize for Ministers will be reduction in the public sector pay bill of £165billion. 10% of which over a full 5 year term equates to Trident, Crossrail and NPFiT costs combined;
  • a single year's saving of 10% would have paid for the 2012 Olympics with cash to spare;
  • every 1000 FTEs public servant costs circa £30 million on the annual pay bill;
  • a modest 5% productivity gain is worth at least £1.5 million per 1000 people, every year.

These headline catching figures still have to be delivered through rational and objective methods.

Resource Optimisation is a proven methodology that equips public sector managers with the ability to respond positively to the inevitable funding challenges in future years.