The State of the State 2014-15

Reform and Deloitte have launched The State of the State 2014-15. Now in its third year, this annual report aims to provide independent analysis of the UK public sector to help facilitate a more informed and constructive debate on the operation of the state. The publication brings together data from a range of public sources, including the government’s accounts, public spending data, the Budget, the Autumn Statement and official economic forecasts, into a single snapshot. The publication also presents insight from roundtable discussions and interviews with executives from across the public services.

The full report is available at:

Extract from Foreword by Mike Turley, Vice-Chairman, Deloitte and Andrew Haldenby, Director, Reform

This year’s State of the State finds the UK public sector approaching a historic inflection point. We are half way through a far-reaching fiscal consolidation programme that is reducing the size of the state. The public sector reform required to achieve the second half of the consolidation looks set to alter the way that many public bodies operate. And the Scottish Referendum has triggered a fundamental rethink of how power is devolved across the UK. In the next five years, the UK and its public sector will change profoundly.

The need to restore the public finances has been hard on government and the public services since 2010, requiring difficult decisions by public sector leaders and executives. But those decisions are about to get harder. Completing the deficit reduction plan will require the Government elected in May 2015 to decide where the next, deeper half of public sector cuts will fall in a 2015 Spending Round. Our research shows that the people running the UK’s public services are justly proud of how they have adjusted to budget reductions so far. It also shows they are apprehensive about the next period of change and challenge.

The public spending outlook may appear bleak and government may need to balance citizen expectation with affordability. But continued reform – based on evidence about what works and driven by effective leaders – will help maximise the public sector’s effectiveness and allow it to thrive as it continues to rise to its challenges.

At its best, the UK public sector leads the way in many areas of modernisation. HM Treasury’s financial management review is revitalising the way public money is managed, the Government Digital Service is helping forge a more citizen-centred digital experience of the state and public bodies across the UK are driving organisational change under significant austerity pressure. Governments around the world are watching ours to learn lessons.