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The 2020 Public Services Trust Blog

Thursday, November 11, 2010

Longer term perspective

By Charlotte Alldritt

It’s been a busy week in UK politics: Prime Minister David Cameron defended top-up fees to the tune of 50,000 students rioting in central London; Secretary of State for Work and Pensions Ian Duncan Smith revealed new sanctions for claimants of unemployment benefit and, ahead of the G20 meeting in South Korea, Bank of England governor Mervyn King warned of the threat to our economy if chronic global imbalances persist.  Amidst all of this, the 2020 PST and RSA brought together scores of public, private and voluntary sector leaders at our Public Services Summit on Tuesday.

Sir Andrew Foster, Chair of the 2020 Commission, highlighted the timeliness of our focus: at this time of fiscal austerity, threats to our public services from cuts are at the top of the political agenda.  The ‘phoney war’ on budgets is set to launch a real offensive.  More than this (and despite genuine efforts from frontline professionals, managers and politicians) the ‘long tails’ of underperformance have left us falling short of what we want, expect and need from our public services.  Public services need to be redesigned so that they are fit for lives we lead and the society we want to create in the 21st Century.

In his keynote speech to the 2020PST/RSA Summit, Rt Hon Francis Maude MP set out the Government’s three-pronged approach to transforming public service delivery:

  1. Channel shift – moving more public services online (e.g. building on the success of the online DVLA vehicle tax renewal, initially to transactional services such as Student Loans and some welfare benefits);
  2. Mutuals – enabling service professionals and users to take a real stake in their public service organisations, unlocking the energy and innovation of ‘entrepreneurial frontline’ staff (e.g. Central Surrey Health); and,
  3. Payment by results – paying providers (of any and every type) for the outcomes they achieve, not pre-funding them so they have limited incentives to aspire to more efficient and effective social outcomes (e.g. Single Work Programme and rehabilitation of offenders).

The 2020 Public Services Trust has examined each of these throughout the course of our research programme.  Our Final Report, ‘From social security to social productivity’ calls for implementation of all three in some form.

But as always, the questions on my mind come back to accountability.  Francis Maude referred to the other big announcement of this busy political week – that of our ‘revolution’ in transparency and the relationship between citizen and the state.  But here the overwhelming consensus at the Summit, in Westminster, and beyond (for the need for change) starts to break down.  Lord Andrew Adonis said that recent announcements did not represent a redrawing of the lines between citizen and the state; “For as long as the State pays for services, Government will be held to account.  If the Government doesn’t set indicators/targets, the media will.”  Matthew Taylor quoted some of the more obscure passages from one of the departmental business plans (published on Monday), designed to enable citizens to monitor and scrutinise Government more closely.

Number 10’s Transparency website is a welcomed start to what will be one of the most interesting and important questions for our democratic society: how do we – the public – engage with our Government and public services?  It is a question that speaks to the availability of quality data; the provision and interpretation of information; mechanisms for citizen/user feedback and redress; public trust in politicians, and, the legitimacy and efficacy of our political system.   These challenges of governance and society have been with us since time immemorial; as was the aim of 2020 PST and our Commission, they give a single busy week a longer term perspective.

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Wednesday, April 28, 2010

The disconnect between voters and politicians on public services…

By Ben Lucas

Today we are releasing headline findings from detailed focus group research which we commissioned Ipsos-MORI to carry out into attitudes to public service reform.  These are based on 13 discussion groups with a range of ethnicities and socio economic groups weighted towards regular service users in 5 English Towns and Cities: Ashford, Kent; Stockport; Oxford; Birmingham; and London.  The full report will be published in early May.

Public service reform is the flip side of the deficit and rising demand pressures.  On all these issues there is a reality gap, which politicians of all parties haven’t dared to address.  Those hoping that the election campaign would close this gap by introducing specific and realistic plans for cutting the deficit and for paying for and running public services have so far been disappointed.  So it’s unsurprising that our research reveals widespread scepticism about generalised and vague ideas for public service reform.

This matters because future demand pressures, particularly associated with the costs of an ageing society, could add 6% to the proportion of GDP which would have to be spent on public services and that’s before taking into account the £40bn black hole in public finances which will have to be filled over the next 4 years.  Public services will have to change in response to these pressures.  But politicians have denied the public the debate they deserve on this.

Because of the banking collapse and the expenses scandal, voters and politicians are caught in a cycle of fear and loathing.  But it needn’t be this way. It’s not that voters won’t support reform. Rather, reform requires clear leadership which engages the public in a proper discussion about the pros and cons of change.  Our research suggests the route it could take.  It explores the types of ideas which are most likely to be attractive and the conditions that the public want to see satisified. 

For changes to be popular with voters they need the following attributes:

  • Security and fairness – the main finding from our research is how deeply attached voters are to the values of security and fairness which they see as underpinning public services.  Politicians would undermine these at their peril. Any reform to public services will have to maintain their essential characteristics – providing a safety net and support, with processes and outcomes which are seen to be fair.
  • Local control – people are receptive to changes which would increase local control over public services.  This links with voters’ desire to be able to see and experience first hand changes in services so that they can properly evaluate these. The ideas discussed here here included:  greater local control over spending, neighbourhood budgets, local public service co-ops, and more local elected accountability.  However, voters want the reassurance of knowing that there are limits to localism, within a national framework of standards so that, as we have seen in Doncaster, central government can step in if necessary to protect citizen’s national rights.
  • Citizen control and voice – Individual budgets are a popular idea, especially where they give individuals more control over the money which is spent on them, eg for caring or for children with special education needs.  But there are fairness concerns, with people worrying that the confident middle classes might benefit, while those from lower social economic groups or marginalised groups might struggle to make this work for them
  • Citizen advisers to help navigate through the system – Another idea which was very warmly received was citizen advisers to help people get the best out of public services and to overcome the fairness problems which people worried about with choice and individual budgets.  Sometimes also called choice advisers, these advisers would be a single point within the system where citizens could get they help they need to get the best out of public services.  Advice would range from service rights to which citizens are entitled through to how to make the most effective choices with individual budgets.

For voters to be persuaded to back change the following approaches need to be taken:

  • Keep it practical and specific – Voters might initially be attracted to big ideas but they soon start to question their practicality.  What they are interested in is not so much vague principles but more practical, concrete examples of how change might work.  They want to see the evidence of how a particular idea has worked and what the pros and cons have been. 
  • Gradual, small scale and incremental – People want change which is organic, which goes with the grain and grows out of existing structures rather than root and branch change. That means identifying the changes which are already working and looking at what can be learnt from these.  And it means building from the bottom up with small scale changes which can be spread rather than grandiose new initiatives.
  • Start with newer, non-core services – People are more likely to support new ways of doing things for either new services or what they see as, non-core services.   So mutuals, volunteering and co-payment will work best if they start with services such as parks and leisure services.  Whilst the focus groups did not explore how public services might respond to some of the new behavioural challenges such as carbon reduction, and obesity, it would be reasonable to conclude that these may also be areas which are ripe for more innovation.

The public’s strong dislike of user charging is striking.  It appears that they see it through the same lens as tax rises and cuts; their question is ‘Why should we have to suffer any of this pain, when it was the bankers and politicians which created the problem?’

Interestingly, the idea of social insurance and partnership funding between the individual and the state for services such as long term care has very little resonance. When pushed participants saw some positives and were also interested in suggesting other elements which could be taken into account, such as social credits which reflected non-financial contribution. But what this shows is that the need to fund some long term challenges in new ways is not yet on the radar for most people – indicating yet again how politicians have failed to engage the public in a debate about the future of public services.

For the 2020 Public Services Commission, the significance of these findings lies in what they show about the need to develop concrete examples of change, to build on where successful innovation is already taking place and the need to have a model of transformation which is based on consent.  These findings will feed into the next stage of our work in which we will be moving from the general to the particular, by seeing how the principles we set out in our interim report could be applied to welfare reform, education, health and public safety.

You can read a summary of the findings here

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Friday, November 13, 2009

Our mutual friend – the public sector

By Ben Lucas

It is good that public service mutuals appear to be back on the agenda. The idea was championed by Alan Milburn, the New Economics Foundation and others, several years ago. Beyond the establishment of Foundation Trusts, which are not employee mutuals, it didn’t gain sufficient traction at the time. It has to be said that this was, at least in part, because Gordon Brown appeared to be opposed to the idea. So if he has changed his position then this is to be welcomed. From progressive conservatives to
the heart of the Government, it seems that mutuals could be the new big idea (see Philip Blond “The ownership state”, http://www.nesta.org.uk/the-ownership-state/Tessa Jowell and Liam Byrne in the Guardian 12.11.09).

There are several factors driving the renewed interest in public service mutuals. The dire financial climate means there is a premium on new ways of spurring innovation and cutting costs. It is recognised across the spectrum that the state needs to change – monolithic, nationalised, mass produced public services are outdated. This in turn will require greater pluralism in service delivery and significant decentralisation. And then there is the need to establish a better relationship with public service staff. One of the great paradoxes of the New Labour era is that despite the biggest increase in spending on public services in decades, public service professionals have all too often felt alienated and disgruntled.

As Professor Gerry Stoker has argued in a paper called “The Micro-Foundations of Public Policy” much of this can be explained by the fact that successive governments have sought to manage public service professionals through the principal agent paradigm, which is at the heart of New Public Management theory. This replaced the older idea that public service workers and professionals were motivated by professional ethics or public service ethos, with the public choice assumption that staff were rational economic agents who would respond to incentives and targets. However, as Stoker argues, this does not take into account the breakthroughs in understanding how the brain works which have been made in the field of neuroscience and applied in behavioural economics. We do not act as rational economic man, but instead are bounded by how our brain computes information, so the principal agent model has hugely overestimated the ability of individuals to rationally respond to incentives and targets. Professor Stein Ringen in his pamphlet “The Economic Consequences of Mr Brown” goes further and argues that New Labour has not achieved the social outcomes it desired because it failed to mobilise citizens and public service workers to achieve social change and instead was seduced by the illusion of central power.

A new relationship with public service professionals should be based on a much better insight into what motivates them. This will be a mixture of being in greater control of the work they do and feeling valued and rewarded for the good outcomes that they help achieve. Since so much to do with the quality of public service outcomes is also about the relationship between professionals and the public, then professionals have got to believe in and feel motivated by what they are doing, otherwise the services themselves will suffer. At a time when there will be big funding pressures, getting staff to feel ownership of the challenge to get more for less will be critical.

All of this helps make the case for looking at models in which public service staff can be owners of the service they provide. Mutuals were in at the beginning of the development of public services, so it is fitting that at this time of great challenge they should once again be at the centre of thinking. They could be a way of protecting public service jobs, a 2010 version of the 1970s worker co-ops.

But there are some significant questions which will still need to be addressed. What stake will local communities have in them? How can we ensure that they don’t become another version of producer capture? What business model would they be based on and how would they be funded, especially if they need access to capital? Could they take on significant risk? How would they be affected by EU public procurement rules, would they have to bid for public service commissions, what would happen if they failed to win bids?

None of these are reasons not to support the idea, but they are issues which will need to be addressed if public service mutuals are not to join the long list of latest big ideas which fail to take off.

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