Monday 22 November 2010

Efficiency savings explained

I’ve noted previously that the phrase ‘efficiency savings’ is generally a euphemism for budget cuts.  The two are not at all the same thing.  An efficiency saving is doing the same thing with less resource; providing a lesser service may well generate a saving, but it has little to do with efficiency.
The difference is often not recognised, but it was made crystal-clear last week by one of the UK’s biggest outsourcing companies.  Capita have been busily re-assuring their shareholders and investors that government pressure on them to reduce costs won’t affect profits at all; they’ll simply provide a reduced service.
It highlights the different priorities depending on viewpoint - protecting services versus protecting profits.  But it’s also an honest and straightforward appraisal of what will actually happen.  In practice, exactly the same thing will be happening with services provided ‘in-house’, but I doubt we’ll see the process described so clearly.  It’s a pity, because an honest assessment of what budget cuts actually mean would enable a more enlightened discussion about whether they’re acceptable or not.

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