The public services of the future will be shaped by the UK Government’s decision to devolve powers to a more local level across England while simultaneously cutting local authority budgets. This presents an enormous opportunity for the public sector, but will also compel it to re-imagine how services are delivered, and to seek new partners to help it realise its chosen objectives.

So far, eight areas – Greater Manchester, Sheffield, the North East, Tees Valley, Liverpool, West Midlands, Cornwall, and West Yorkshire – have agreed their ‘devolution deals’ with Government. This offers these local authorities a chance to tailor service provision to specific local circumstances, delivering greater cost-effectiveness alongside better outcomes for local people.

Simultaneously however, local authorities are being forced to deal with significant budget reductions. According to the Local Government Association, councils have seen a 40% real terms decrease in their core grant since 2010, and the Government has announced that this grant will be phased out entirely by 2020. The 2015 Spending Review saw a commitment from Government to allow local authorities to retain all business rates revenue by the end of the Parliament, but councils continue to face long-term funding questions.

This not only threatens councils’ capacity to provide services today, but will also hinder their response to emerging challenges such as the aging population which will increase demands on services in the future. This context has two important consequences.

Firstly, a smarter approach to local public spending is required. Artificial barriers between ‘departmental’ concerns must be broken down in order to focus on the public service user as a whole individual. Research by Locality has found that 1 in 3 people feel public services are not meeting all of their and their families’ needs. Dealing with people’s needs holistically is a key part of remedying this, but can also reduce future service demands and so help local authorities to adapt to budget reductions.

Secondly, the public sector must make use of all resources available locally, including those it does not directly control or manage. If devolution is the opportunity, the current decentralisation settlement risks restricting this opening only to the local state. Enthusiasm and local knowledge is not monopolised by the state at the local level: community groups, the third sector, and the private sector should all be considered potentially valuable partners to public service providers in meeting the overarching objective of doing more for less.

Ultimately, it is the outcomes, rather than the means, of public service delivery which are of importance, and greater flexibility and creativity in the means of delivery will allow greater success in achieving desired outcomes. Below are two examples of what this might look like in practice.

First, local government should draw up cohesive, locally-administered strategies to address local problems. For example, it should provide integrated service ‘hubs’ and draw on its non-public sector contacts in service areas like public health, support for jobseekers, and citizen advice on debt and money management, in order to form a single place-based public wellbeing strategy which can reduce demand for ‘traditional’ health and care services.

Such a strategy would aim to improve individuals’ all-around welfare, rather than addressing fundamentally interlinked issues like employment and mental health separately. It would also crucially acknowledge the contribution that businesses and community groups can make in the work to achieve positive outcomes for public service users.

Secondly, we must significantly improve the use of the Social Value Act of 2012. This Act, requires public service commissioners to consider the potential for their decisions to secure additional social, economic or environmental benefits for the local community. As such, it can ensure longer-term thinking about the purpose of public services, and how to extract maximum place-wide benefit from their delivery.

The Act moreover offers a clear opportunity to broaden the perspectives involved in public service delivery by bringing in local social enterprises and voluntary organisations. Lord Young’s review, published in February 2015, found that where its provisions had been used, the Act had produced cost savings through innovative service delivery, as well as better service responsiveness to local needs and desires.

Faced with both a major prospective transfer of responsibility and the need to achieve significant cost savings, it is difficult to predict what the population’s experience of public sector services will be like in five years’ time. Yet if we view this volatile context as an opportunity to change how we conceive of and deliver those services, we can not only guarantee their provision against a challenging future environment, but also improve the outcomes people see today.

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of The Economist Intelligence Unit Limited (EIU) or any other member of The Economist Group. The Economist Group (including the EIU) cannot accept any responsibility or liability for reliance by any person on this article or any of the information, opinions or conclusions set out in the article.