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Death by a thousand cuts: How governments undermine their own productivity

A RECENT report highlights the pitfalls of across-the-board budget cut strategies many governments employ. The Centre for Policy Development report, funded by the Community & Public Sector Union/Civil Service Association of WA, uses case studies from the Western Australian and Commonwealth public services, and applies these generally to public services across the country.

The Death by a Thousand Cuts authors Kathy MacDermott and Christopher Stone concluded that long term effects of across-the-board cuts were a loss of:

  • Workforce capability;
  • Public sector productivity and innovation; and
  • Confidence in public institutions

In order to justify across-the-board cuts the paper says governments often find it convenient to require their agencies to deliver efficiencies, such as staff cuts.

Sector wide spending cuts can result in an increase in mistakes and inefficiencies. Centrelink and Medicare are two Commonwealth Government agencies that have experienced severe cuts across-the-board. In both cases the agencies have seen an increase in the number of mistakes in the face of increasing staff workloads. All in all this has led to a decrease in service quality and outputs.

Using examples from the Western Australian public service, broad cuts have meant difficulties such as: retaining knowledge; skills shortages; replacing the ageing workforce; keeping up with technological changes; and delivering regional services.

In terms of retaining staff the UK Recruitment and Retention report, which this study refers to, named six major factors why an employee would leave the public service:

  • The sense of being overwhelmed by bureaucracy, paperwork and targets;
  •  Insufficient resources, leading to unmanageable workloads;
  • A lack of autonomy;
  • Feeling undervalued by Government, managers and the public;
  • Pay that is not ‘felt fair’; and
  • A change agenda that feels imposed and irrelevant.

All of these factors are likely when a government is making across-the-board cuts.

Although it might not be surprising, Death by a Thousand Cuts states there are limits to doing more with less, with cuts are likely to reduce innovation, efficiency and productivity.

When it comes to productivity, often governments rely on good will of public servants to want to do a good job, despite huge obstacles such as reduced resources and increased workload.

A whole-of-sector approach to budget cuts can also lead to a loss of confidence in public institutions.

Because across-the-board cuts means limited revenue is spread thinly across programs, this means services are underfunded and underachieving. As well as impacting on employee engagement, it also means that the public are likely to be less happy with the services. This lack of satisfaction can be linked to a reduction in public trust in government institutions.

The report makes a number of recommendations, including:

  • Achieving genuine efficiency through alternative means such as audits run separately to the budget process and stakeholder input from employees and unions.
  • Targeting factors detrimental to employee engagement and ultimately productivity. These include bullying and harassment; lack of opportunities to use abilities; stress and pressure; low belief in the organisations; low trust and confidence in senior managers; and lack of a clear vision from senior management.
  • Addressing problems to improve recruitment and retention. This could include making the public sector more attractive for potential employees through improving its image and targeting factors that make people want to leave, such as unmanageable workloads, feeling undervalued and insufficient resources.

 

Read the full report here.

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