How to reform public services?

If you're looking for a little light reading, you might try this collection of essays by a group of Conservatives calling themselves Bright Blue.  All political parties have such groups, who want to demonstrate how progressive / radical they are.  This one interests us chiefly because one of the contributors is Jonty Olliff-Cooper, of A4e.  Scroll to page 47 (unless, of course, you want to read the rest as well).  It's entitled "Better, cheaper, more human - building progressive Conservative public services".  Jonty is obviously very proud of it.  To be sure, there's a disclaimer at the end of the article that it's his personal opinion and not necessarily that of his employers; but there's a great deal in it which chimes very well with ideas which A4e has been pushing since long before JOC joined them.

JOC and I start from fundamentally different positions, both philosophically and practically, on public services, privatisation and outsourcing.  I believe in a mixed economy.  There is a place for the private sector.  Conservatives believe in the free market unconfined, in the profit motif as the best incentive to doing anything.  Yet at the outset of the article JOC says: "As progressive conservatives, we should reject the orthodoxy that the private sector is the only route to growth. It is not. A flourishing economy requires quality public services too, to educate its workforce, get people back to high-quality work, keep its population healthy, reskill workers in declining industries, and attack the social evils of crime, disillusionment and addiction, which drive up taxes."  It sounds hopeful.  Public services are necessary.  But: "across the political spectrum, the expert consensus is that many public services intervene too late, are too bureaucratic and expensive, and do not give people what they really need or want."  This is an assertion without evidence, but it's preparing the ground for something which is introduced later in the piece.  Services, he believes, should be delivered on a "right to try" basis, ending the monopoly of the public sector; a position where "government stops trying to do everything itself, and instead pays whoever is best able to meet its objectives."  He continues to write in defence of the public sector.  It's not its fault if it doesn't work properly.  Where is this going, one wonders.

This country has a great deal of experience now with outsourcing.  We know exactly what can go wrong.  But this experience is never reflected in the visions of the ideologues.  As JOC developes his argument, and talks about "where we are going wrong" he neglects entirely the reality of years of private sector involvement in the delivery of public services.  "Current provision fails because it finds it hard to see the whole person," he says.  What follows is very much A4e's long-held belief in a sort of wrap-around contract which tackles all the perceived needs of the people whose behaviour government wants to change.  Mental health, addiction, offending, unemployment, debt - all should be addressed by an integrated approach rather than piecemeal with separate contracts.  While his analysis sounds perfectly reasonable, the implications are not.

He gives three options.  The first is to "Stop specifying the process; start specifying the end point."  This boils down to something like the Work Programme; a clear definition of an outcome and payment only on results achieved.  Well, that's working well, isn't it?  The WP was never solely PBR because it cost too much to deliver the service (I use the word loosely) before any outcomes could be achieved.  The new outsourcing of the Probation Service is to be on PBR but, we gather, in a modified fashion.  This option also leads to the "We don't care what you do as long as you get results" approach, which leaves the hapless client with no rights.

Second, JOC wants to "Slash commissioning bureacracy".  This is where the thesis unravels.  He wants a "let a thousand flowers bloom" approach, permitting anyone who thinks they can deliver a service to try to do so, a licence system, paying by results.  This would not exclude the public sector, he insists, which could compete if it wanted to.

In both the NHS and education we are seeing private and public sectors "competing" but the end result is not in doubt.  There was a move recently by Monitor, the body charged with overseeing the changes in the NHS, to recommend that private companies should not be charged corporate taxes because the public sector did not pay them.  This seems to have been quashed for the moment, but will certainly continue to be an issue.  In education, the public sector, i.e. local councils, are increasingly being left with no role except to pick up the pieces.  They cannot compete, and nor should they.

The fact is that, especially in the sort of services JOC envisages, the public sector cannot compete with private companies.  Who would be doing the commissioning?  A council cannot put a service out to tender and then bid for it itself.  Is it, then, supposed to watch a private company set up a rival service and pay them for outcomes?  That might be attractive to a big private business, but a council is answerable to its residents, not to shareholders, and would not be able to maintain a department which had a diminishing role; nor could it run a department at a loss, as businesses are willing to do.  There are instances of local councils bidding for contracts from government.  This works only as long as the contract is profitable.  In the current climate (or in any climate, come to that) no council or other public body would be in a position to lay out money on a gamble that it could make a PBR contract pay.

Experience also tells us that the flourishing start-ups JOC foresees would soon disappear.  We have three or four huge outsourcing companies in this country, and if the government wants to spread the net wider it has to look abroad.  Small enterprises rapidly get swallowed up or driven out by the big players, who are prepared to work at a loss if it secures them long-term business.  JOC's vision is a fantasy.

His third point returns to the delights of PBR.  "The deeper the need, the deeper the help", he heads it, and could add "the bigger the payment".  He rejects the idea that this is "naked Tory privatisation" (although nothing he has said convinces me otherwise).  He describes "a person down on their luck", with multiple problems, all of which could have a price to the organisation which could address them; "an organisation that would provide a single source of advice and support, and help you with all your issues, an organisation which understood you, your family, and the place where you grew up; one that would stand by you for the long term; treat you like a human, not a number; and back you to build a different future for yourself."  I don't think he means to be patronising.

As a vision of public service reform, this is deeply flawed.  It professes to admire the public sector whilst putting forward plans which would wipe it out.