Presentation on theme: "IMPROVING PRODUCTIVITY IN SCOTLANDS PUBLIC SECTOR JO ARMSTRONG Scottish Policy Innovation Forum February 29 th 2008."— Presentation transcript:
IMPROVING PRODUCTIVITY IN SCOTLANDS PUBLIC SECTOR JO ARMSTRONG Scottish Policy Innovation Forum February 29 th 2008
Presentation outline Ø Why competition / contestibility Ø Scottish Water Ø Lessons to apply to 3 chosen sectors –Social housing –Care services –Waste management
Why competition Ø Competition delivers effective allocation of scarce resources Ø 2007 Budget settlement very tight SG spending rising at 1.5% pa in real compared to >5% pa historically Some facing a real terms cut & feels like a cut for many more?
Why competition Ø 2007 Budget settlement very tight Ø Demand for services keeps growing COMPETITION = PRIVATISATION
Scottish Water experience Ø Monopoly provider established in 2002 Ø Economic Regulator sets price caps within which Scottish Water must operate Ø Delivered: –40% reduction in operating costs –undertook record investment AND –increased output and quality
Actual Vs Target operating costs (£m, prices) Source: WICS
Lessons for wider application Ø Clear Objectives Ø Effective competition and regulation Ø Effective benchmarking Ø Incentives drive performance
Conclusions Ø Efficiencies no longer nice to have Ø Competition & contestibility offer routes to greater VFM (economic regulation 2 nd best option) Ø Scotland fears competition – how do we reduce the fear?
/ Improving Productivity in Scotland's Public Services [Data-light version out soon!]