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01.04.12

Public service reform – Coalition 2 years on

Source: Public Sector Executive Mar/Apr 12

The Coalition’s reforms present a chequered picture two years into its term of office. Coherence is not always apparent, but where patterns can be discerned there are justifiable grounds for concern about the direction of travel says Chris Painter, Emeritus Professor of Public Policy and Management at Birmingham City University.

To mark the second anniversary of the formation of the Conservative-Liberal Democrat Coalition Government, this article highlights – somewhat arbitrarily – fifteen facets of its public service reform programme, grouped under four broad categories.

The critical tone is partly in empathy with dedicated public servants up and down the land, whose accumulated wisdom and ‘distributed knowledge’ too often seems to count for little or nothing with public policy-makers pursuing their own agendas; this notwithstanding legislative ‘pauses’ and endless consultation exercises.

Reform and implementation

1. Public service reform is more problematic than imagined. It was a lesson learnt the hard way by Tony Blair whilst in office. Yet this reality contrasts with the gungho metaphors initially deployed by the Coalition, with their intention to ‘hit the ground running’. A greater air of caution already pervaded by the time the Open Public Services white paper was belatedly published in July 2011, acknowledging the need to prioritise and pace reforms to take account of change delivery capacity. Most observers have been surprised by the momentum behind the Education Secretary’s inducements for schools to convert to academy status. By contrast, more than 18 months after reform plans were first divulged in July 2010, the Health & Social Care Bill remained the subject of legislative wrangling. The Prime Minister – let alone the Health Secretary – struggled to move the focus of debate on from policy formulation to policy implementation!

2. It follows that there is often a poor correspondence between political rhetoric and reality on the ground, the ‘transformational’ hype a poor guide to changing practice. A classic example is the ‘joining-up’ of health and social care. Back in 2005 I was writing about a ‘gathering trend’ to cross boundaries between local health and social care services, with innovative attempts to promote partnership working. Yet here we are in 2012 with critics claiming that the Health and Social Care Bill, now receiving royal assent, missed an opportunity to prioritise the very same agenda! The jury is still out on whether budgetary retrenchment of the magnitude planned for the rest of this Parliament – re-affirmed in the March budget – will make a quantum difference to the pace of public service change, or whether instead those fiscal plans will themselves run into implementation difficulties as their cumulative impact mounts. Leading economic and financial think-tanks, including the Institute for Fiscal Studies, have continued to draw attention to the daunting scale of the Coalition’s austerity programme.

3. This underlines again how counterproductive ‘top-down’ reforms can be. Interestingly, it is redolent of the debate raging early in my academic career about the respective merits of rationalcomprehensive and (de)incremental adaptation models of decision making. The grand designs of the former can turn out to be risky leaps into the dark, whereas incremental changes can be recalibrated in the light of on-going feedback. Moreover, the transitional disruption caused by organisational upheaval is welldocumented, including by international agencies such as the OECD. In the case of health reform, which the UK has a peculiar propensity towards, it has been estimated that each re-organisation costs two years of improvements in quality!

4. So, we continue to see constant resort to structural tinkering. Accepting that institutional arrangements do matter is one thing; making a fetish of the above is quite another. One of the serial culprits at present is Theresa May at the Home Office. US-style police and crime commissioners, replacing existing appointed local police authorities, are to be elected in November. A National Crime Agency will supersede the Serious and Organised Crime Agency set up under legislation enacted as recently as 2005. The UK Border Force is now also to be split from the Border Agency itself!

Fragmentation and public accountability

5. Yet, we have the paradox of centrallydriven reform leading to ‘microtisation’ of public services, typified by fragmentation of education provision through the creation of ‘free’ schools and multiplication of school academies. The latest health reforms will accelerate this process in that service area, with concern continuing to be expressed about their potentially destabilising consequences for local health economies. This looser public service architecture increases risk of systemic failure. An imbalance between primary and secondary school places is one such crisis that is looming.

6. Dis-aggregation of service delivery is further fuelled by the growth of commissioning at the heart of the Coalition’s public service reform programme. This now extends well beyond the traditional domain of defence procurement to significantly impact upon welfare-to-work, health and penal policy – prospectively joined by policing – with outsourcing progressively spreading its scope beyond traditional support tasks to also embrace sensitive frontline services. It brings in its wake private shareholding companies highly dependent on public service contracts to sustain their turnover and provide a viable growth strategy for their businesses. Moreover, in the health sector there is concern that the commissioning process itself may not necessarily remain a ‘public’ function.

7. Contrary to David Cameron’s ‘big society’ – a theme which still struggles to gain policy traction – charitable bodies, mutual organisations and social enterprises still play relatively minor roles in the ‘commissioning state’. Dashed expectations regarding contracts for delivery of the Work Programme speak volumes. We are certainly not seeing anything comparable to the status previously acquired by housing associations. Not-for-profit organisations, they have become a leading force in the social housing market.

8. Despite the Coalition’s commitment to increased transparency, fragmented service provision undermines robust accountability for the use of public money – something that one might expect to be paramount at a time of financial austerity – especially where non-state organisations are concerned. There are cases, indeed, of not only value for money but also basic probity becoming an issue, including short-term financial re-engineering detrimental to the services in question, or even of financial sharp practice. Residential social care and welfare-to-work have both exemplified these dangers since the Coalition came to office.

Targets and outcomes

9. Coalition ministers were keen to proclaim the arrival of a ‘post-target culture’ so as to be clearly differentiated from New Labour. Persuade schools threatened with ‘special measures’ that this is the reality! Targets for performance in public examinations have become even more demanding. Likewise health service clinicians! Another key operational performance target has been imposed, that prescribing the maximum threshold for the proportion of patients whose treatment can be delayed by 18 weeks or more without repercussions. When it comes to targets, practice has therefore deviated from intention.

10. As with targets, payment-by-results (PBR) – the ‘big idea’ of the Coalition for augmenting the productivity of public services – is susceptible to manipulative gaming. One perverse example has been the precedence given to treatment of patients still the right side of the target period over those waiting longer, thereby flattering hospital trusts’ performance profiles! Likewise, performance in contracts based on the PBR principle might not quite be all it appears. Moreover, if the going proves tougher than expected, large private contractors have sufficient leverage to re-negotiate the terms.

11. The evidence-base for Coalition reforms is often more tenuous than ministers would have us believe. Instead, policy change is influenced by ideological predilection, anecdote, or practice transferred from very different national and socio-cultural contexts. There is a tendency to extrapolate too much from individual examples of excellence and hence for generalising from the particular. Thus, the data relating to improvements brought about by school academies when compared with other state schools is currently at best ambiguous and inconclusive.

Markets and the public domain

12. The Coalition is also struggling to realise ambitions to establish thriving public service markets, due to internal political tensions, pressure from countervailing interests and public opposition (evident from support for e-petitions). Hence confusion surrounding the health reorganisation following its stuttering journey to the statute book, surely one of the most extraordinary legislative episodes of recent times, depicted as a ‘dog’s breakfast’ because of the many unresolved tensions. Other market reforms have been bedevilled by naivety, as with the higher average for university tuition fees than envisaged when the trebling of the maximum charge was first unveiled, drawing ministers ever more deeply into micro-management of student numbers.

13. The above is compounded by a familiar pursuit of contradictory administrative principles, not least competition versus co-ordination. As highlighted earlier, this dilemma presents itself par excellence in health and social services, especially where the elderly are concerned, given the obvious benefits to be derived (financially and otherwise) from more seamless provision.

14. In any case, the efficacy of public service markets is not something that can be taken as read. It depends on the characteristics of the market in question, the competitive architecture and regulatory framework. We have, after all, seen many recent examples of dysfunctional markets! One crucial consideration is whether sufficient account is taken of public/social and not just financial returns. This takes us straight back to the issue of what kind of outcomes add real value, as opposed to the kind of political window-dressing denoted for example by merely reducing the number of people qualifying for welfare benefits. It remains to be seen whether the early intervention schemes being conceived for troubled families will confound such scepticism.

15. Finally – and most fundamentally – many of these developments are likely to further erode the public domain: the space that reflects those considerations which collectively – as opposed to individually – serve our interests as a society. The most chilling aspect of the August 2011 civil disturbances was not so much how they exposed the ‘thin blue line’, as what they brutally demonstrated about the fragility of the ‘social glue’ that binds us all together.

Tell us what you think – have your say below, or email us directly at opinion@publicsectorexecutive.com

(Image: Crown Copyright / The Prime Minister's Office)

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