Public services threatened by low tax revenues

Deliotte has issued a report warning the economic downturn could have a 'significant' effect on the quality of public services as tax revenues decline while demand for social care and housing increases because of rising unemployment.

In Turning the Tide the firm said Whitehall departments and local authorities
will come under intense pressure to cut costs, but urged managers to regard
the pressure as an incentive to make previously unachievable reforms
such as sharing back-office functions with other public
bodies, clamping down on sickness absences and selling assets.

Mike Turley, head of Deloitte’s public sector practice, said: 'To date, analysis has focused on economic indicators such as consumer spending, the property market and UK businesses, but the impact on the finances, operations and policymaking of public sector organisations may be equally significant. This is important because the health of public finances and the ability of government to deliver services are highly relevant to the public interest and the economy.'

Among many recommendations the report suggest the public sector should exploit its position of 'customer of least risk,' using its strong credit rating to obtain 'better value for money' and to negotiate cheaper contracts.

See the report and its recommendations here.