Publication Digital Education and skills Health and Care Justice Machinery of government Social security 20 October, 2015

State of the State 2015-16

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Welcome to The State of the State 2015-16. Now in its fourth year, Deloitte LLP and Reform have once again collaborated to analyse material from a wide range of public sources, including the government’s accounts, public spending data, departmental reports and official economic figures. We augment that data with insight from roundtable discussions and interviews with leaders from across the public services to produce a report that is grounded in the realities of our public finances and constructive in its thinking.

Ahead of the 2015 UK general election, debates raged over how many billions of pounds each political party was willing to commit to spending on public services. Yet virtually no discussion took place over how effectively that money was going to be managed and spent. By publishing The State of the State, we hope to put the spotlight on those issues.

This year’s report finds the UK in the middle of a decade-long recalibration as the public sector aligns to a lower level of public spending. The fiscal consolidation programme that began in the wake of the 2008 global financial crisis is half-way through, and by 2020 its completion could see the UK’s spending on public services at its lowest level for 50 years.

For many public bodies across the UK, the first half of this decade was dominated by cost reduction in the face of austerity. This report suggests that the next half of the decade could be more challenging than the last. Spending reductions will continue. But the UK’s best civil servants, politicians and local public sector leaders are seizing the opportunity to shape a fitter and more focused state.

Amid this challenging recalibration, a sector that is built around the citizen, makes the most of its talent, takes the fullest advantage of technology, engages partners to best effect and maximises its value for the taxpayer is worth pursuing.

Andrew Haldenby, Director, Reform Mike Turley, UK and Global Public Sector Leader, Deloitte LLP