Retirement Blog

Finance Blogs » Retirement Blog » Make the government smarter

Make the government smarter

By Jennie L. Phipps ·
Monday, October 29, 2012
Posted: 4 pm ET

As baby boomers age, demand for public services will increase. By 2025 -- 13 years from now when many of us will be living in retirement on fixed incomes -- consultancy Accenture estimates that government at all levels -- from municipalities on up -- will have to spend an additional $940 billion annually to pay for the services that an aging population will require.

This increase is coming at a time when governments are responding to the demand to control taxes by cutting back on personnel. In my neck of the woods that has already meant shortened hours, longer waits, fewer services and a general grumpiness among our public servants. Apparently I'm not the only one who has experienced this. Accenture surveyed people ages 50 to 64 and found that about 70 percent said they were dissatisfied with government services, with only 27 percent saying that they believed that government is capable of delivering services that meet their needs and expectations.

If you plan to rely soon on Social Security and Medicare, this is a significant retirement planning dilemma. Fortunately, Accenture has an easy fix. It calculates that if the level of public sector productivity rose just 1 percent, the entire problem -- about $1 trillion cumulative -- would go away.

I mentioned this to the guy behind the counter at the post office this morning, and he told me that I didn't know what I was talking about. That he was already being asked to do twice as much as he used to do, and how much could one body actually accomplish?

Using technology and the increased efficiency that it brings, public employees will be able to accomplish a lot more than they do now, says Brian Moran, global director for Accenture's Delivering Public Service for the Future program. "Shift the management model to reward productivity," says Moran. "Integrate good technology and self service into the process."

Moran doesn't see this as revolutionary. He says it simply requires bringing how the public sector operates more in line with what is already happening in the private sector. "It is only 1 percent. It is just getting on track a little bit," he says, "but it offers tremendous financial potential."

Bankrate wants to hear from you and encourages comments. We ask that you stay on topic, respect other people's opinions, and avoid profanity, offensive statements, and illegal content. Please keep in mind that we reserve the right to (but are not obligated to) edit or delete your comments. Please avoid posting private or confidential information, and also keep in mind that anything you post may be disclosed, published, transmitted or reused.

By submitting a post, you agree to be bound by Bankrate's terms of use. Please refer to Bankrate's privacy policy for more information regarding Bankrate's privacy practices.
October 31, 2012 at 1:46 pm

Ray & Mike-the few bad apples that take advantage of the "pension spiking" make the rest of the average public sector employees look bad. Retirement is a three rung stool: SS, savings, & 401K, 457, 403B, or pension plans. If you do it right and plan, you will make it. The lavishness you talk about is really small compared to the whole public sector workforce!!!!

October 30, 2012 at 5:42 pm

There is such a profound misperception about public service and public employees. Easy to use them as scapegoats. But, if you've worked in the private sector then tried government, you're likely to find as much, or often more, dedication and commitment in the public sector. I've worked both for Federal and State governments, as well as in private industry, and if I ever open my own business there are a number of fed and state workers I would try to hire. Here are the real problems with the public sector: 1. Congress and State legislatures pass many poorly conceived and designed laws that force government agencies to administer and oversee unwieldy and unworkable programs; if you want a great example, check with the Federal Highway Administration and the Highway Beautification Act (billboard control law). Much inefficiency and waste because it is an unmanageable program, a program designed to fail. 2. Whenever a group of politicians want to make political hay, it's always "Let's cut government waste!" So, we'll restrict their access to resources, cut staff, and we'll charge them to "do more with less!" The DMWL philosophy is also built to fail--you can only do so much with what you have. The bottom line is--if you are really serious about making the public sector more efficient, here are some ways to do it: First, screen every piece of legislation for efficiency of management; if a program cannot be efficiently managed, change it or eliminate it. Next, require every manager and supervisor to certified to manage through a mandatory training and continuing education program. More often than not, managers are selected not on demonstrated managerial skills, but simply via seniority or other factors. And, finally, let's show some respect for the folks in all levels of government service who put their heart, their soul, their knowledge, skills and abilities into serving others!

October 30, 2012 at 5:15 pm

Heidi, to use the scare tactics you mention to justify continual increases in federal and municipal budgets is absurd and, to my mind, completely invalidates every other argument you make.

I'd like to challenge you to look at the official budget of your local municipality. Go through it line by line and come back here to post your proof that there is no possible way to cut 1% of its budget.

I've done this, several times. Most municipalities could cut 20% or MORE and not effect a single change in public-perceived services. There is a LOT of fat to cut and to deny this is astonishingly uneducated and uninformed.