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.
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.”