Government Cuts: Lessons from the NHS

On Sunday morning, I woke up to hear the news that Government Departments are being asked to draw up savings plans that equate to 25% or 40% of their budget.  This news left me with a foreboding feeling.

I think this is because I’ve been there.  Whilst the majority believe that the NHS has had a decade of plenty, some Trusts have been through some tough financial times.  A number of years ago, when I returned from one of my maternity leaves, I found myself as a Director of HR in a Trust with significant financial issues.   (The reason for the financial mess we found ourselves in has been documented in a public inquiry and isn’t the subject of this blog.)

Achieving a 25% cut in budget, let alone a 40% cut is going to be difficult.  If I had to live through it all again, then this is what I would be saying:

1) As a starter for 10, work out what is core business and what isn’t.   If it it isn’t core business, stop doing it – unless it generates income.

2) Once you have defined your core business, face the fact that this level of cuts isn’t about trimming around the edges.  This is about service redesign.

3) To achieve substantial savings you will need to be creative and innovate in your approach to service design.  Consider the impossible, because that might just be the option that you eventually decided to take.

4) Be brave.  You will need to take a number of calculated risks if you’re going to be successful in achieving your savings.

5) Don’t drag out the planning stage. Staff will want to know as soon as possible whether they are in or out.  They may not like the truth about their future employment, but they would rather know than being left in “limbo”, waiting to hear.

6)  Think through the implications of any “quick (savings) wins”  before you implement them.  For example, don’t stop the usage of all temporary staff (bank / agency).  Downstream, you’ll end up having to back-track on such decisions and this will undermine your credibility as a manager.

7) Whatever you do, you are not going to be popular.  Accept this and work hard at your communications strategy to compensate for this.

8 ) Stay (legally) safe: Don’t cut corners when it comes to your employment contracts.  In an era where you’re trying to save money, the last thing you need is to have to face a number of ETs – which will cost the organisation time and money.

I decided to stay with my Trust when we were in Turnaround, but a lot of my colleagues jumped ship early on.  I felt that I would benefit from the experience,  but it left me jaded and I lost the passion for my job which gets me out of bed every morning.  For those managers in government faced with this current challenge:  I wish them luck.