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The 2020 Public Services Trust Blog

Friday, November 27, 2009

Virgin dreams

By Henneke Sharif

A very interesting presentation yesterday by Virgin Atlantic’s Head of Design Joe Ferry, at a group hosted by the Design Council with, I think, some interesting lessons for public service reform about the power of experiences.
Virgin doesn’t compete on price or size – it can’t, so instead it competes on dreams and aspirations. Joe called it design, but, in reality, dreams and aspirations seemed to be what it boiled down to. From the design of the revolutionary flat bed to the fit out of the first class lounges the driving brief was about making a place and service that people wanted to be part of. They call it creating a future memory which Joe described as creating something new that people already know they want to buy into because it strikes chords – it’s the way they want to live. In Virgin’s case this future memory was encapsulated in the phrase ‘an air of natural glamour’. It’s not as fluffy as it sounds – they had to work with their engineering, commercial and financial wings (pardon the pun) to envisage and build new cabin layouts and seats with incredible space restrictions and the most stringent safety regulations, and build the right service. And they had to get the Board to buy in to a multi-million pound project in a downturn, in the year of 9/11, SARS, and the financial bubble imploding. But the Board also saw the importance of what people’s experiences are, how they feel, what they wish to be.
Feelings, aspirations, dreams, a sense of belonging. These are not words that public service reform is happy engaging with, much easier to shuffle rulers and sweat the, very important, technical stuff. But for users, public services are as much about our experience of them as they are about managing resources effectively. I think we need to address both if we’re really going to make a difference.

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Posted by Henneke Sharif at 3:00 pm
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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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Wednesday, May 6, 2009

Perspectives on the Future?

By Henry Kippin

This week I was handed a photocopy of a new book chapter by Simon Griffiths from the Social Market Foundation – who has written on public service reform, and co-authored a few interesting SMF papers (on assertive citizens, for example). The chapter is part of a speculative study of Cameron’s Conservatives, with his contribution focusing on public services.

In true academic style, the article was written and researched well before publication, and therefore without the full horror of the budget in full view. But as a guide to some of the potential key strands of Tory policy (greater choice and competition, personalisation, localisation and greater institutional autonomy etc), it’s a useful piece.

The conclusion reflects on the lack of a guiding narrative for the party’s approach to public services – but also recognises that previous ‘isms’ only became clear after three or four years of a new government. One would have thought that whatever ‘ism’ Cameron had planned is being hastily reworked in the light of the fiscal crisis.

***

On another note – a new report was recently published by JRF (authored by Peter Kenway), exploring the idea of raising jobseekers allowance. There are, of course, arguments for and against – some of which I go over in a forthcoming SMF publication on Anglo-Flexicurity.

The JRF piece is a good introduction to the debate. For example:

“to conclude that JSA is low does not mean that it automatically should be higher. It is perfectly possible to agree that it is low and believe that it should be low. To argue for higher JSA, therefore, a value judgement is needed. The argument for higher JSA must rest on the belief that a civilised society should have a ’safety net’ to provide financial support that allows everyone to live at a minimum standard of living.”

A recommended read.

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Thursday, April 30, 2009

The Language of Reform?

By Henry Kippin

There’s a short piece in the online New Yorker at the moment – based on a conversation between US economists Robert Solow and Joseph Stiglitz. Faced with an American public petrified by the word ‘nationalisation’, they debated at a recent event some more acceptable alternatives to describe Omaba’s bank bailouts.

‘Pre-Privatisation’ – pretty straightforward, if a bit disingenuous. Implies a rapid return to a pre-crisis mode of operation.

Financial Reorganisation – not really sure what this means. Sounds like something the IMF would have ’suggested’ during the 1980s.

Conservatorship – now I’m definitely lost.

These examples might be tongue-in-cheek, but the idea that we should be softening the blow of the financial crisis with linguistic dexterity is pretty serious.

Part of the problem with the global financial system was its complexity – with impenetrable language providing a real barrier to popular understanding of the system. So if we didn’t really understand what was going on before the crash, we should certainly be pressing for clarity afterwards.

Maybe there are lessons here for public service reform in the UK. We are all now aware of the financial mess we are in. And most of us accept that public service spending as we know it will soon be a thing of the past. So do we call this adjustment? Retrenchment? Creative re-structuring? Does it matter?

I think it does. If our parties are honest about the choices they are facing (and their reasons for choosing them), they might expect a degree of understanding from the electorate. We may not be happy about the behaviour that got us here, but we should at least use the crisis as a means to demand more honesty and clarity from our politicians. And the best word I can think up for that is accountability.

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Posted by Henry Kippin at 8:34 pm
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Tuesday, April 21, 2009

Public Service Reform – Geordie Style

By Henry Kippin

Ive just read an intriguing new book from Compass that arrived in our office last week – called Public Service Reform…but not as we know it! (not my exclamation mark…). The publication is a timely reminder of the public sector’s capacity to drive internal reform and cost savings – based on a case study of Newcastle Council’s ICT infrastructure over the last nine years. Apologies for the long blog, but I’m a Geordie…

The study shows how, under the pressure of open competition, council employees recognised existing problems, reorganised and successfully prepared their own bid for maintaining and developing Newcastle’s ICT infrastructure.

According to author Hillary Wainwright, their success shows the folly of assuming that ‘in-house services could never be transformed to match the savings offered by the private sector’. To the contrary, she argues that ‘contrary to New Labour’s criticism of and lack of confidence in local government – public sector managers and staff can drive and lead change, generating innovative ideas and successfully implementing them’.

This is no doubt an argument worth listening to – especially at a time when government must open their ears to all possible strategies for squeezing better value from public spending. And the approach taken by the author: personal portraits, lyrical style – makes it an easy read.

A few positive elements I took away:

1. The case study shows that truly engaging public sector workers in the processes of reform that impact upon them can be productive. Public sector professionals are frequently cast as part of the problem – but they can also facilitate and be part of effective solutions.

2. Choice and competition are not exclusive to (nor do they inevitably require) private sector solutions. If our starting points are providing a better service for citizens and the delivery of ‘best value’, we should be open to whatever solutions are optimal – private or public.

3. Strengthening local accountability is a key driver of effective reform. A recent discussion between Phil Collins and John Cruddas debates this.

4. In a broad sense – a well-managed public sector player in the market can push up quality, through raising the bar for private participants. This can facilitate a well-functioning market; and also exposes public sector providers to valuable information on the wants and needs of service users.

However,

5. The role of agency is key. The bid was pushed along by a strong union (UNISON) presence with a reform-minded leadership, in tandem with engaged and articulate management at the Newcastle Civic Centre. Where this is lacking, the experience will be harder to replicate.

6. The bid emerged from a vigorous anti-privatisation campaign, as well industrial action by IT staff. This provided a strong sense of motivation and – crucially – mobilisation. The question is – would such mobilisation be evident without such a political drive?

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