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Public service reform: Outcome scenarios

Source: Public Sector Executive Sept/Oct 2012

Chris Painter, Emeritus Professor of Public Policy and Management at Birmingham City University, uses alternative scenarios to game longer-term impacts of Coalition government reforms and to develop a richer analysis than the orthodoxies that tend to take hold in official circles.

Much metaphorical ink has been spilt – not least by this author – in analysing the Coalition’s public service reforms, notably those for education, health, policing and welfare-to-work. But are these reforms likely to end in smiles or tears? This article examines six future scenarios and their ramifications.

Open public services scenario (OPS)

This scenario takes its cue from the Coalition’s white paper of the same name published in July 2011. The intention is to open public services to ‘qualified’ providers from the public, private, and voluntary, community and social enterprise sectors, who will be licensed or registered by regulators as appropriate and rewarded wherever feasible on the basis of ‘payment by results’. Barriers to open commissioning are to be reduced in the interests of a level playing field and to create more accessible public service markets, providing opportunities for all types of provider, including mutually owned spin-outs formed by public sector employees taking control of their own services.

The desired objective, as the white paper puts it, is therefore to: ‘switch the default from one where the state provides the service itself to one where the state commissions the service from a range of…providers’. An associated challenge is ensuring continuity of service – especially for the most vulnerable users – in the event of organisational failure, putting interventionist strategies in place accordingly.

This approach will usher in a new era of increased productivity, resourcefulness and innovation in the way public services are delivered, from which we will all benefit both individually and collectively. The value of such an outcome in an era where public finances are heavily constrained hardly needs emphasising.

Implementation deficit scenario (ID)

A pre-requisite for realising those benefits, of course, is more intelligent commissioning of services by central and local government, as well as by new clinical commissioning groups in the health service when shortly they take effect. That will depend partly on professional development and training programmes for those commissioners. The first scenario, indeed, requires capacity-building on a number of fronts. There are also issues surrounding the transparency of the contracting process.

Yet, we are hearing echoes of Tony Blair’s ‘scars on my back’ syndrome, the phrase that encapsulated his frustration that more progress in improving public services was not being made early on in his premiership. Former members of David Cameron’s inner circle have already voiced concerns about the sluggish pace of reforms, with a now familiar refrain about rearguard actions from professional bodies and deficiencies in the civil service machine.

In reality, such frustrations have more to do with over-simplistic conceptions of policy implementation. Rather than mechanistic pulling of levers, reforms are contested, negotiated and mediated by those implementing them. The Coalition created a rod for its own back through lack of prioritisation, simultaneously taking on a number of special interests. This was combined with heroic assumptions, as in reform of police governance and likely turnout for the election of police and crime commissioners in November 2012, which if low will have a direct bearing on the success and legitimacy of this new office in replacing local police authorities.

There is also a paradox in the Coalition focusing so much energy on structural re-organisation that it is in danger of missing opportunities for meaningful substantive reforms. This is no more evident than in the case of health and social services. Finding a workable and funded solution to the growing crisis in adult social care has been marked by erratic decision making. Necessary reconfiguration of specialist hospital services to put them on a more sustainable basis remains elusive. Just as pressing is the need for greater integration of these services so that more care can be delivered in the community rather than in hospitals. At best, we have seen only piecemeal moves in these directions. In fact, many of the current Government’s structural reforms are likely to impede the achievement of more costeffective service provision.

Corporatisation scenario (C)

The open public services agenda risks mutating into unadulterated corporatisation, as they are progressively contracted to large (frequently multinational) outsourcing and private security companies, with other potential providers marginalised. The prime contractors selected by the Department for Work and Pensions to find employment for the long-term jobless as part of the work programme proved instructive in this respect. Discontent by voluntary and charitable bodies has, if anything, subsequently increased, sensing that they were used as ‘bidcandy’.

Coalition reforms provide many opportunities for further corporate involvement. Health and community services are being opened to competition from ‘any qualified provider’. Many clinical commissioning groups are likely to become dependent on private health companies to discharge their responsibilities. The more autonomous institutions resulting from deconstruction of the school education service through academy and free school programmes will be tempted to turn to commercial education companies for managerial assistance. Entry of private institutions into the higher education market is being encouraged. Police management is under pressure to outsource functions to reduce costs, with probation services also coming into this frame, private security companies having already established a strong presence in the penal system.

Particularly alarming in this context are examples of private contractors exploiting unemployed people participating in work experience schemes; insufficient capacity to deliver on contracts; delay and disruption attributable to unreliable supply of vital support services; failure to meet legal requirements; and dubious financial engineering, or even ‘systematic fraud’.

The Care Quality Commission also recently found that independent providers of residential care for those with learning disabilities are less standard compliant than those run by the state (though low-price contracts provide a partial explanation).

As Michael Sandel, Harvard professor, argues in his book on What Money Can’t Buy, encroaching market values are reducing social relationships to calculative transactions. This applies even more if there is no obligation to take into account wider social (or public) value when awarding public service contracts, as opposed to a requirement only to consider it as in recent private members’ legislation. And perversely competitive public examination boards are being blamed in government circles for undermining (not raising) educational standards.

Rejoining-up scenario (RU)

In response to the earlier impact of competitive tendering and proliferation of special-purpose appointed agencies, ‘joined-up government’ became one of New Labour’s defining mantras. A future government will face similar challenges. One casualty of the Coalition Government’s policing reforms may well be local community safety partnerships between local authorities and police forces, established by the 1998 Crime and Disorder Act and instrumental in promoting holistic approaches to crime prevention.

Ostensibly about streamlining the NHS bureaucracy, the 2012 Health and Social Care Act will, in fact, add to organisational complexity, with system management consequently becoming more problematic. There is increasing recognition, too, in a fragmenting market of autonomous academy and free schools, of the need for an intermediate tier below Whitehall to bring a semblance of coherence and apply local knowledge, whether it be reinvented local education authorities or local educational administrators in some shape or form. Regional outposts of Ofsted hardly seem an adequate response to the developing administrative vacuum at this level.

Elbowing out scenario (EO)

Enthusiastically embracing extension of individual choice, the Coalition set in motion a formal consultation on whether this should become a statutory right. In the 6th edition of Public Sector Management Norman Flynn questions the value of a right to choose per se, as did I in this magazine back in July/August 2011. The theory of public service choice often diverges from the practice. Outcomes in such markets are not immune to disposable income; hence premium property prices in the vicinity of good state schools. The increase in the ceiling on hospital trusts’ earnings from private patients will provide a more direct route to such advantage.

Choice is open to manipulation in other ways, with the most informed more likely to capitalise on increasing availability of comparative performance data, and the socially wellconnected able to elbow their way to the front of the queue by mobilising networks of influence should all else fail. Such social gamesmanship is detrimental to another principle enshrined in the July 2011 white paper, that of fair access. It can only ultimately be counteracted by creating ‘redundant’ capacity at a time when resources to invest in public infrastructure are even scarcer – though this does ironically appear to be a (random) consequence of the education secretary’s free school policy!

Residualisation scenario (R)

In this final scenario, the cumulative effect of the planned resource squeeze, including stricter eligibility criteria for the welfare budget, will take its toll on the scope and quality of public services and on income maintenance programmes. The likelihood of this outcome will be further increased if reforms identified in the ID scenario are not addressed. Any benefit from measures taken by the Coalition to ease social mobility, such as the pupil premium for disadvantaged children, could thereby be more than cancelled out, leaving a residual safety-net for those who cannot make their own social protection arrangements. Social inclusiveness and cohesion will be an inevitable casualty. This assumes, of course, that the cuts themselves are sustainable. The cost to the Coalition’s political capital is already high with the austerity strategy only at an early stage.

Stakes involved

The stakes magnify as we descend through the above scenarios. In ID it is yet more dashed expectations; in C a marketised society; in RU impeding strategic decision-making capability; in EO less equitable access to public services; and in R a polarised and fractured nation. There is consequently much riding on the optimism infusing the OPS scenario!

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