Towards a sustainable future in public services


What is the future of public service? How can governments fulfill their promise to deliver sustainable, quality public services to their citizens efficiently and cost-effectively?

Accenture’s “Delivering Public Service for the Future: Navigating the Shifts”, a series of global reports on the future of public service, projected the total Government spending on public services through 2025 (with the use of Oxford Economics’ modelling) in 10 countries – Australia, Brazil, Canada, France, Germany, India, Italy, Singapore, the UK and the US, with an aim to inspire Government leaders to take a fresh look at the problems they face, to present paths to progress and to show how all of the pieces should fit together.

 

Expenditure gap

Demand-driven spending estimates were compared against the current trajectory of public sector spending to identify the ‘expenditure gap’ in each country by 2025, along with its percent of GDP.

 

 

 

 

 

 

 


 

Looking at the Southeast Asian countries as well as Australia:

1) Singapore

Singapore’s cost for public services is projected to total S$72 billion, 12 percent of GDP, by 2025.  The primary driver of the projected expenditure increase is an ageing population. The population aged 65 years or older is projected to increase by almost 2.5 times (or 146 percent) from eight percent in 2010 to 17 percent of total population in 2025, representing the largest percentage increase of the 10 countries studied.

Singaporeans also have one of the highest life-expectancies in the world, ranking fourth in a study of 221 countries. Government spending on healthcare has already increased from S$2.7 billion in 2008 to S$4.1 billion in 2011. Moving forward, costs primarily associated with an ageing population are estimated to require the Singaporean Government to spend an additional S$13 billion (2.3 percent of GDP) to fund public services by 2025.

2) India

India tells a different story. The youthful demographic in India brings an expanding, university-educated, diverse talent pool to fuel competitive advantage. However, with both the population and the GDP growing rapidly, the country is seeing additional pressure on infrastructure as Government manages citizens’ needs and expectations of the delivery of public services in the future.

Costs primarily associated with increased spending on citizens for healthcare and growth of India’s ageing population are estimated to require the Indian Government – at all levels – to spend an additional Rs. 3.2 trillion to fund public services by 2025. The United Nations project a 76-percent growth in the population aged 65 or older by 2025, with 7.3 percent of the population aged 65 and over by 2025.

Another driver of India’s projected expenditure increase is wealth effects – assumptions based on historical evidence that suggests that as countries get richer, governments spend proportionally more per person on public services. The Government has said it intends to increase its spending on health to 2.5 percent from 1.4 percent of GDP over the next five years.

3) Australia

According to Ipsos MORI citizen research conducted as part of our “Delivering Public Service for the Future” initiative, 33 percent of Australian respondents said they are satisfied with the services they receive from Government, compared to a global average of 36 percent. These findings demonstrate a need to adopt a whole of Government approach that enables smart, integrated, longer-term planning and more effective delivery of a range of common business services.

Australia has a rapidly ageing population (with 17.9 percent of the population over 65 in 2025 versus 13.4 percent in 2011) which adds urgency to the need for Australia to look anew at its long-term plans for public service design and delivery, as they are driving up the cost of related public services such as, pensions, transport and aged-care facilities.

 

What’s next?

All these findings drive home the need for a “whole of Government” strategy that embraces the major structural shifts from:

  • Standardised services to personalised services – tailoring public services to the specific needs of each citizen to drive better outcomes at sustainable costs;
  • Reactive to insight driven – using information and technology to identify and solve problems;
  • Public management to public entrepreneurship – leveraging the scale and assets of Government for maximum impact in the economy; and
  • Piecemeal efficiency to whole-of-Government mission productivity – taking action across all Government agencies/ministries to eliminate duplication and rethink how public services are designed and delivered to improve efficiency.

Understanding the problem and identifying a framework of potential solutions are just the beginning of operationalising transformational change. The fundamental gaps between what governments want to achieve and what they can achieve with public service will galvanise Government leaders to decisive actions.

For a copy of the Accenture report, go to here.

– Peter Goh is the managing director, Health & Public Service, ASEAN, Accenture.

(** PHOTO CREDIT: Singapore night traffic, chikit713, stock.xchng)


 

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