Public services threatened by low tax revenues

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
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

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