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Letting go: Shifting power from Whitehall to town halls

by WillTanner in Reform blog on 17 January 2012

Roundtable seminar introduced by Baroness Eaton, Former Chair, Local Government Association, on 17 January 2012. 


The Government has made devolution a key priority. The Prime Minister has pledged to end the “Whitehall knows best” attitude to public service delivery with greater plurality, decentralisation and local accountability. Yet while some of the policy milestones have been met, people are still uncertain about how to do it. So to explore the issues, Reform convened a roundtable seminar yesterday, led by Baroness Eaton, the former Chair of the Local Government Association, on the subject of “Letting go: Shifting power from Whitehall to town halls”.

At the heart of the Government’s proposals for decentralisation is the notion of delegating authority to “the lowest appropriate level”. Yet the idea that specific governmental or organisational levels are most appropriate for specific functions misses the point. The real question is the extent to which citizens, the users of public services, are engaged with service design and delivery. This does not mean citizens delivering services themselves (although it can), but does mean civil servants, local commissioners and service providers – including businesses – treating citizens as customers, and designing services with and around them.

Leading councils, such as Hampshire, are showing that it can be done. They are merging budgets and taking the decision to commission services, rather than try to deliver them too, which boosts efficiency and responsiveness. Other simple innovations, like putting complimentary services in the same buildings, have their place too. The Government’s community budgets pilots may move this agenda forward. But as one attendee commented, “the time for pilots is over”. It is time to translate all the rhetoric around shared services, personal budgets and voucher schemes into action.

Really pushing power away from Whitehall comes down to money. And with power comes responsibility, in budgets as elsewhere in life. For years central government has given local authorities money and freedom but come riding to the rescue when they fail. This has created asymmetries of power, which has ultimately left councils dependent on central government support. If localism is to work, Whitehall must trust local government, local government should be free to raise more tax revenue itself, and everyone should hold their nerve when services fail.

The £3.5 billion real terms reduction in local councils’ funding this year represents an unprecedented “burning platform” to change the way local services are delivered. This is not easy, but examples like North Dorset District Council, whose 25 per cent funding shortfall since 2006 has led to radical devolution to communities, show what can be done. In 2010 North Dorset was named as Best Community Partnership in the country.

The discussion was held under the Chatham House Rule.

Will Tanner, Researcher

Tags: Government, Will Tanner

From tight to loose

by WillTanner in Reform blog on 20 January 2012

Reform-HP roundtable seminar introduced by Sally Collier, Executive Director, Policy and Capability, Efficiency and Reform Group, 19 January 2012


Yesterday a Reform seminar debated “tight and loose” i.e. what is pretty much the Cabinet Office’s most important policy idea: that sometimes efficiency means a tight central grip while at other times it means devolving and decentralising. Speaking for Reform soon after the election, Francis Maude argued that the previous Government had achieved the opposite of what is needed:

“It seems to me that the last Government had this almost diametrically the wrong way round. They didn’t control a lot of those things which fall into my “tight” category [such as civil service headcount, ICT and procurement]. They didn’t control them well at all, and yet there were constant attempts to micro-manage delivery from the centre with a plethora of targets and public service agreements and monitoring and auditing and man marking and regulation and guidance so that everyone here at the front line, you felt that you were, instead of being accountable to the the citizenry you were there to serve, you felt actually accountable to an enormously complicated set of relationships to the centre. This is wrong and doomed to fail.”

The discussion, under the Chatham House Rule and sponsored by HP, turned on where this Government draws the line. There certainly can be benefits to tightness. Both the National Audit Office (NAO) and the Audit Commission have found evidence of the benefits of a tight central grip. This is particularly the case where government buys something simple and easily specified – such as basic commodities – and where it buys at great scale. A fierce drive on costs can also help reform and new ways of working. For example, the Government Property Unit is currently reducing the size of the Whitehall estate. This could improve the productivity of civil servants by moving them into the same buildings (and so improving communication) or encouraging them to be more mobile. In general it was felt that Whitehall had been insufficiently “corporate” in recent years, and that a bit of tightness was long overdue.

But most of the discussion set out of the dangers of tightness elsewhere in the public sector. All rigid procurement rules necessarily exclude some suppliers from competition (and often the more innovative ones). Both the NAO and the Audit Commission have shown that, in other cases, efficiency comes when a part of the public sector has the local nous, flexibility and freedom to solve a problem itself. And in general the centre of government overestimates the benefits of central intervention. For example, central targets are less effective than they seem because they are always gamed (the targets may all be hit yet standards may fall). And central government does not have the data – particularly on costs – to be sure that its intervention is worthwhile.

The concern would be that the tendency of the Government (really, of any government) is to drift to the tight. Even this year we have seen the Prime Minister set a new personal rule for the numbers of visits that NHS nurses make to hospital beds per day. His justification was that the issue was so important that he had to intervene. But clearly that opens the door to much greater intervention as time goes on, and not just in healthcare. The Cabinet Office has been much more convincing on “tight” that is has on “loose”, as the difficulty in producing the Open Public Services White Paper showed. The Government, I think, has to set out more thinking on the “loose” side of the bargain if it is to hold the line.

Andrew Haldenby, Director

Tags: Andrew Haldenby, Government

What does "better" look like?

by WillTanner in Reform blog on 26 January 2012

Reform-HP roundtable seminar introduced by Rt Hon Chris Grayling MP, Minister of State for Employment, on 24 January 2012. 


Payment by results is in danger of becoming the Government’s big idea on public service reform.  It had a big place in the Open Public Services White Paper and it is being implemented in the areas of welfare to work and offender management and rehabilitation.  A working group has just been set up within government to compare experiences between departments and identify new opportunities.

This Reform seminar was the second in a series of events, sponsored by HP, to debate the latest thinking in the public service reform agenda.  The first thing to say is that it is very clear that good, innovative providers are seizing payment by results with both hands.  They like the idea that they have freedom to run their services as they wish in order to meet the target.  One attendee explained that the focus on results (in this case for rehabilitation for prisoners) had led him to create a new working relationship between police, prisons and probation which clearly promised a better service all round.

One emerging problem is that the emerging variety of payment by results programmes are starting to trip over each other.  There are already different programmes for unemployed people variously funded by national government, European funds and local government.  In the Government’s view, these schemes are separate and mutually reinforcing (in that each seeks to achieve a particular outcome that helps towards the overall objective of getting someone back to work).  In some providers’ views, the schemes overlap and result in multiple payments for doing similar things for the same people.  It is easy to imagine the complexity getting worse as new programmes come on stream for troubled families and drug rehabilitation.  The trade-off is between greater Government control of activity (and lower spending) and greater freedom for providers to decide exactly what will make the difference in a particular situation.  Some attendees suggested that the solution might be local commissioning of payment by results programmes rather than a national procurement.

A remaining question is if we are to pay for “results”, who decides what the right “result” is?  In the case of schools (say), I am very happy for schools to get paid by results, but I don’t want Michael Gove deciding for me what should be in my child’s curriculum.  This suggests that there is a natural limit to payment by results as soon as consumer choice comes into the equation, which certainly includes education and the great majority of healthcare.  Ministers cannot just rely on payment by results to reform public services; they will need to develop the other parts of the open public services agenda, specifically choice and competition in schools and the NHS, which so far has been more difficult.

Andrew Haldenby, Director

Tags: Andrew Haldenby, Government, criminal justice, welfare

New business models for public services

by WillTanner in Reform blog on 14 February 2012


Reform-HP roundtable seminar introduced by Professor Julian Le Grand, Richard Titmuss Professor of Social Policy, LSE and Chair, Government Mutuals Taskforce, on Monday 13 February. 


By Nick Seddon

The Open Public Services White Paper, published in July last year, advocated greater diversity of provision and new models for public sector value, including personal budgets, payment by results and employee and community-owned ventures. The third and final roundtable in our seminar series with HP was convened to explore “New business models for public services”. The lead speaker was Professor Julian Le Grand, Richard Titmuss Professor of Social Policy at the London School of Economics, and Chair of the Government’s Mutuals Taskforce, based at the Cabinet Office.

Julian Le Grand outlined the themes in his article for yesterday’s Guardian. Social enterprises, charities, mutuals of various kinds, private firms and professional partnerships will all have a bigger role to play in delivering social and public services, sometimes alongside, but more often instead of, old-style public monopoly providers. In particular, he said, robust incentive structures can be found in an employee-led 'mutual' spin-out from the public sector now operating in a competitive market. That said, mutuals “are not appropriate in all circumstances”, he added, just as John Lewis's boss, Charlie Mayfield, has observed that his model is “not the answer to all ills”.

The discussion that followed, which was under the Chatham House rules, was wide-ranging and valuable. The key take-aways for me were:

Firstly, we need to reform fast and at scale. The Cabinet Office is prioritising mutuals and SMEs as deliverers of public services, but we should be careful about inventing business models and believing that what is new and complex must be good. These organisations could take many years to make a significant contribution, while tried and tested “old” models maybe more successful, sooner. The Cabinet Office must also consider the merits of large public service providers, in the public, private and third sectors, who are able to make a major contribution immediately.

Secondly, should any areas of public service delivery be off-limits? There was a debate about the politics, but in principle the answer to this is “no “. One line of thinking was that we should go back to the idea behind Compulsory Competitive Tendering – and extend this to all areas of public service delivery to force even the most recalcitrant of local authorities and primary care trusts to put services out to bidders who can offer best value – the highest quality services at the best price.

Thirdly, to encourage diversity and flexibility we need to keep lowering the barriers to entry. Some of these we have known about for years, like the portability of pensions, access to capital, and so on. The skills and capabilities of the supply side (the new providers) are not always up to scratch; the skills and capabilities of the demand side (procurers or commissioners) also need to improve. The language of “rights” contained in various Government White Papers – such as the “right to challenge” – is insufficient if these rights are not backed up with real force. They do not have legal power. It is a minefield for new providers, so there is a long way to go to create a level playing field.

Finally, we need high quality information about the performance of the new open system – so that we can demonstrate outcomes and value for money, and move away from stale ideological arguments. The Open Data agenda of the Cabinet Office has given particular energy to the notion that what matters is not processes or organisational models but outcomes for citizens and users. 

Tags: Nick Seddon, Government

Reforming government: Global perspectives

by WillTanner in Reform blog on 26 April 2012

Reform roundtable seminar introduced by Alastair Levy, senior expert in government reform at McKinsey & Company, on Monday 23 April 2012. 


By Nick Seddon

Developed countries around the world have reached a day of fiscal reckoning, as a number of authors put it in Reform’s recent anthology, The next ten years. If one sentiment unified that collection it is that radical change is needed in the economy, government, public services, health, welfare and pensions, and the role of the individual. It’s either that or terminal decline. “Unless policy is re-focused on improving economic efficiency for the economy as a whole, and within the public sector,” wrote Rupert Darwall, “the big question facing Britain is whether Britain is going to have one lost decade or two.” In order to gain political support for tightening budgets, the Government must demonstrate success in improving the performance of public services – i.e. show it can do better with less.

Yet the Government is struggling to make real progress. Yesterday Reform held a roundtable lunch seminar with Alastair Levy, senior expert in government reform at McKinsey & Company, on the subject of “Reforming government: global perspectives”. Alastair has advised governments in over 30 countries on their reform programmes and published a number of articles, including Better for less: Improving public sector performance on a tight budget. Top politicians and civil servants, leading business people, and press, discussed lessons Britain can learn from its international counterparts on reforming government and implementing a coherent programme of change.

The event was held under the Chatham House rule. Alastair outlined some of the ways in which government leaders around the world have navigated the complexities of achieving far-reaching reform - and the need for multiple approaches to change to be deployed in parallel to make this happen. The ensuing discussion was held under the Chatham House rule.

Two broad themes emerged. One was broad agreement with and analysis of Alastair’s points, leading to concerns about how the UK stacks up in practice. Some argued that the Government consistently underestimates how hard reform is. Another concern was with the failure to formulate and stick to a clear and firm strategy, with an associated failure to prioritise (“pick your fights”), and to manage and be open and honest about the trade-offs and tensions (such as between local and national power and responsibility). While the data and transparency agenda was welcomed, some worried about accountable for delivery. Communications have confused people about whether saying something is the same as doing it.

The other broad theme was around Civil Service reform. The need for a stronger centre of government (the “tight” of “tight and loose”) is paramount in a time of radical reform. Ministers can only govern through the Civil Service and will do so better if the culture of the Civil Service is supportive of the reform effort. Ministers need to be clear about what the Civil Service is being asked to do so that it can be equipped and managed according to clear aims and objectives. Getting more for less – departments capable of leading major change while also being changed and reduced in size – requires a high-performance workforce with strengthened skills and capabilities. Reform has argued for years – and some around the table took this line – that the structure of the Civil Service needs to change so that civil servants are personally accountable for performance.

To finish on the structural point, this is Tony Blair writing in A Journey:

“I have described a journey. At first we govern with a clear radical instinct but without the knowledge and experience of where that instinct should take us in specific policy terms. In particular, we think it plausible to separate structures from standards, i.e. we believe that you can keep the given parameters of the existing public service system but still make fundamental change to the outcomes the system produces. In time, we realise this is wrong; unless you change structures, you can’t raise standards more than incrementally.”

Tags: Nick Seddon, Government

Managing change in the public sector

by WillTanner in Reform blog on 06 December 2012

 Reform roundtable seminar on "Managing change in the public sector", with Stephen Kelly, Chief Operating Officer for Government, on Tuesday 27th November.

Tags: Andrew Haldenby, Government