What is the role for publicly funded services in our society?
Open public services - a real debate is needed
We all know it: our public services aren't just creaking under the strain of short-term budget cuts; they're just not going to survive effectively through the increasingly complex demographic pressures of the coming decades.
What to do?
In the past few years we've seen a number of excellent government sponsored national reports (Marmot, Bradley et al) that call for (in the words of Baroness Corston's report on vulnerable women in the criminal justice system) 'the need for a radically different, visibly-led, strategic, proportionate, holistic, women-centre, integrated approach'.
But did anyone listen? And are any of our systems able to make the change? Is it - as I suspect - a case of 'back to the drawing board'? Do we need a whole new framework to address our societal needs, and if so, what should NCVO and the wider voluntary sector be doing and saying to make that change happen?
Below, we've asked a range of very different organisations to share their thoughts. I hope this gets you thinking.
Please leave comments, or contact me directly. We want a debate. We're adding further comments. Or submit one yourself.
Read the commentators so far:
- Andy Gibson, Sociability
- Professor Su Maddock, Manchester Business School
- Ben Lucas, RSA
- Jay Kennedy, Directory of Social Change
- Mike Kelly, Head of CSR, KPMG Europe
- Ian Mulheirn, Social Market Foundation
- Sian Lockwood, Community Catalysts
Or return to our news page featuring the Open Public Services White Paper and its consultation.
The Digital Garden: how the voluntary sector should seize social media
Andy Gibson, Sociability
'The key question for the voluntary sector is now, what happens if we apply the broadcasting models of social media to social issues, social justice, social impact, and social change? What if we were to reshape public services this way, and campaigning, and philanthropy? What effect will these new models have on our local communities, voluntary groups and civic institutions? And what does it even mean to be a ‘social’ organisation these days?'
Read the full article by Andy (208KB).
Rising above the BS rhetoric, we need a public governance framework that supports a better living for all, no matter where they live.
Su Maddock, Manchester Business School
The Coalition government eulogises about social enterprise but ignores the realities of what is needed to support more egalitarian practices.
Social ventures are not floating islands that can survive without connection and support. Yet in this period of intended reform, even policy advisors admit that they lack any strategy for truly enabling transition to meet ambitions. We see that there is scant regard for the need for new capabilities and platforms for innovation and connection. And in reality, the machinery of government remains poor at connecting to the third sector whether branded under the name of the Big Society of not. The Big Society cannot work so long that these structural inadequacies remain. Policy will not become practice.
How can this support happen?
Social enterprise may be a better way of delivering such support. Many local authorities already think so and have moved from being the provider of services to a refocus on their leadership role. They are attempting to create new eco-systems to support local recovery through the building resilient relationships: between communities and services between public commissioners and local services.
However, social enterprises able to achieve these functions do not simply magically appear. They grow when people have the energy, commitment and time to develop them. Leadership, capacity and capabilities are important – no essential ¬- yet seem to have slipped from the Big Society conversation.
Social entrepreneurs broadly welcome the Big Society opportunity to find a niche in developing new services – but they are also affected by the fact that it was the local authorities and RDA who previously had funds and capacity to support them with initial investment and connect them to each other and the responsibilities of public commissioners. At the local level those agencies brokering connections are either closing or much reduced in size and capacity. At a recent event in Manchester social enterprise such as Fab Lab (offering free technological support to new businesses) say that they need investment in platforms for connectivity. Yet, the very agencies providing these are closing. Manchester Knowledge Capital closed on the 31st March; Local Government Yorkshire and Humber has been dramatically downsized.
Problems on high; problems on the ground
As with any government the Coalition government is divided over what is the priority: rationalising for efficiencies or supporting localism. There is also the lack of sense in government that they know the answers in terms of how to support innovation such as personalisation and who should deliver it. There is process of centralising ‘localism’ happening: the DWP have decided on large companies such as SERCO as main supplies for their Work Programme, whilst local consortia such as GMCVO of the Commission for the Economy in Manchester were not even told of the contracts. Preferred suppliers tend to have good access to politicians or be in London – hardly a levelling of local equalities. All this ultimately means that the government has a narrative for the Big Society in local communities but in reality is supporting large companies with no local connection or accountabilities, smaller, locally connected enterprises.
This is not to say that a new landscape is not needed it is – but the level of public sector cuts in the sector and other public services is removing the very connections in localities that were supporting these. The emergence of more in innovative forms will not appear quickly enough if government does not start to reverse its ‘Slash’, burn and ‘Creator of chaos’ decisions. This is an old innovation narrative– a radical change in personal practice is required in the public services and there are many struggling to achieve this through intensive, emphatic support – the question is what business model will justify investment and how we develop the staff capacities to collaborate and start to learn to co-produce.
This government wants more community and locally based services but is denying its own role in creating the conditions that could support a new landscape for the public sector. At present, the cynical assume this is a plan rather than naivety- either way there is a capacity gap which will be filled by large companies with hardly any local connection. These large companies do have the finance and capacity to run providers bodies that can take the Work Programme to scale and organise GP consortia.
A journey started by a social movement towards egalitarian and fairer practice at the local and regional level is being hijacked by government and commercial companies. We need much more political leadership within the Big Society process, seeking a governance framework that protects both the space to innovation and public values, and oversees the emergence of new frameworks that make this possible. This is being discussed but rarely gets an airing - we need a narrative that stimulates those in the third sector.
Blog http://sumaddock.wordpress.com
@sumaddock Senior Fellow Manchester Business School, Institute for Innovation Research
Visiting Professor UWE
What do we want and need from public services?
Ben Lucas, Director, RSA
The great danger for our public services is that confronted with hard times, we will think only of the short term. Yet short-term fixes are the last thing we need right now. Just think, for example, of the waste of effort and money embodied by the successive training schemes launched in the 1980s to deal with youth unemployment, when what was needed was a long term plan for vocational education and apprenticeships.
Three forces are driving the need for long-term change in our public services. New demand pressures, rising citizen expectations and the fiscal deficit. Yes, £81bn of cuts is pretty brutal and will have some very bad consequences. But, in the long term, how we respond to the challenge and opportunity of an ageing society will be even more significant. On current assumptions this will add a further 6% to the proportion of gdp spent on public services by 2030. And then there is the growing cost of coping with chronic illnesses, and of meeting our climate change obligations. Not to mention the challenge of globalisation both in terms of where economic growth will come from and how to cope with greater population diversity.
Our public services are still largely based on the Beveridge framework, but we no longer live in a mass production society. We work in smaller businesses and organisations, we lead more diverse lives, and we have very different life expectations. We experience personalised, digitalised services in many aspects of our lives and the autonomy and control that goes with this. At the same time a significant minority in our society has been excluded from the benefits of economic growth, for them inequality has become more entrenched and universalism has failed to deliver better opportunities or life chances.
Faced with these long term changes, now should be a time for serious reflection about what public services are for and how they should be organised. The 2020 Public Services Commission, which I helped to run, argued for a new public services settlement - based on the principle of social citizenship and rooted in resilience, responsibility and reciprocity. Public services shouldn’t just be about providing us with greater security, they should strengthen the bonds of cohesion which link society together, enabling citizens to exercise more control over their lives and equipping them with the capabilities to lead the lives they choose.
Public services should promote social productivity, by mobilising citizen, community and state resource to achieve social value. We will only rise to the big challenges we face in the future if we can untap all the resources at society’s disposal, which includes, skills, time, empathy, and trust, as well as money, professionalism and regulation. But this is a long term process of change. Services can and should be run in different ways and mutuals and social enterprises have an important role to play in developing social institutions that strengthen social capital and provide the basis for economic renewal.
However, the underlying purpose must be to achieve social value, not just to run things differently. Take libraries. It’s clear that spending cuts will lead to the closure of many local libraries. But the defence of these services often rests on wishful thinking. In truth, they are often not the community assets, homework clubs and service information points, which their defenders would like to believe. So the challenge is not just to protect them but to transform them into being the sort of social institutions which could help generate social value. That may require both community ownership and a new purpose.
It’s wrong to see all this as a binary choice between between state and civil society. Both need to work with each other. There are areas of the country where building social capacity will require more not less public spending. Tackling inequality will also require targeted and effective investment. And local government has an important role to co-ordinate and integrate services, in order to focus more effectively on local social priorities.
Open public services: what might it mean for you?
Jay Kennedy, Head of Policy at Directory of Social Change
[This is a piece first published on the DSC website.]
Tendering for work is going to get massively more complicated
The hassle of managing that Local Authority grant is going to seem like nirvana compared to trying to subcontract with any number of private companies, large national charities, and public sector spin-offs which will be in the running to pull down the big government contracts. Companies may come to you if you’ve got good brand presence, marketing, and a ‘niche service’ that they need, but more likely they won’t and you’ll have to seek them out and ‘pitch’ them a good deal. They’re not going to bother publishing their subcontracts on some kind of accessible interactive website. Nor are they likely to be terribly interested in things like you ‘recovering your full costs’ or why you care about helping people more than making money.
Get ready for the data blizzard
The current Government has an almost religious belief in the power of open and transparent data to drive everything from efficiency to quality to accountability. In principle it sounds good but there are two main problems – first, few ordinary citizens want to spend their free time trawling through indecipherable spreadsheets, and second, there is little understanding from politicians about the practical difficulties and costs of producing rigorous data in consistent and meaningful ways. Current disclosure of local authority spending data has so far produced little useable information, but expect more of it anyway – not just from public bodies but as a requirement imposed on you as part of delivering the service.
Then get ready to feed that data back to the machine in astonishing new ways
Current monitoring and reporting overload will move to a new level for the 21st century. Key Performance Indicators (KPIs) and mere targets are old money – the new monitoring bureaucracy will be about gathering and reporting user satisfaction data, demonstrating ‘evidence of impact’ using a plethora of complicated (and probably expensive) methodologies, and proving accountability from multiple angles – in ways dreamed up by people who are fervent believers in the ‘transformative’ power of whizz-bang new technology. Think service users giving you a star rating with a mobile phone app. Never mind if they don’t own one or can’t use one.
Start thinking about how to market your services to clients
The personalisation agenda has the potential to revolutionise how many services are delivered, and will be a major element of future reform. It all sounds great in theory, because it puts the client/service user in charge, but there are obvious practical challenges. Charities will need to adjust from being paid to provide a service, to competing to attract the money given to individuals by the state to purchase services. This involves a very different organisational outlook and potentially even management and staffing changes. Do you need a fundraiser or a marketing manager? Of course there are also loads of other questions about clients knowing how to make informed choices about the best service, or any service for that matter…
The old shibboleth that the sector is ‘under-capitalised’ will start to mean something
Payment by results contracts, where you are paid fully or in part depending on the results achieved (which depend of course on how they are measured) are likely to be applied across public service provision wherever possible. This philosophy will start to trickle down locally too, without local commissioners necessarily understanding what it’s all about or why it’s necessary. Look out for any terms and conditions in contracts which involve payment by results and give them a rigorous risk and cost analysis before you sign anything.
The big deal with payment by results is that you need to be in a position to risk capital and assets (whether your reserves, or some kind of ‘social finance’) just to get in the game. If you aren’t, you will be excluded from the market (or find yourself in a sub-contracting relationship, or maybe forced into a consortium). When policy wonks and politicians say ‘the sector needs to be more entrepreneurial’, this is part of what that means for real. By definition entrepreneurship means risk taking – with payment by results this could mean risking not just a project or a budget but the entire organisation.
There will be more confusion about accountability – be clear about your role in the chain
Think about this: private sector ‘prime’ contractors are already subcontracting departments of local authorities under the Work Programme. Who on earth is in charge when the local democratic body is working for a private company? Who does the service user complain to? How do they get redress? What’s the local councillor’s role? Who takes the blame when things go wrong? Who is willing and able to pay for the best lawyers to decipher the contractual small print? Think carefully about your position in the supply chain and be extra clear with clients about what you can provide, what you are able to determine and influence, and what you can’t.
Look out for public sector transparency standards and procedures applying to you
It’s quite possible that in the near future things like Freedom of Information (FOI) regulations will start applying to any organisation delivering a public service – including charities and social enterprises. This could be a problem for charitable suppliers in so far as they may not be able to bear the costs of meeting FOI requests, so consider it when assessing the viability of any contract. Also commercial confidentiality may come into play – and this is likely to be a big battleground for private sector suppliers in particular, who will surely object. Will transparency be applied fairly and consistently?
What do you think? Are we on target or way off the mark? Too pessimistic? Too optimistic? Send us your comments and feedback to feedback@dsc.org.uk.
What should the role be for publically funded services?
Mike Kelly, Head of Corporate Social Responsibility at KPMG Europe
Just about everyone agrees that the state must take responsibility for providing (or at least ensuring the provision) of certain services – defence, law and order, primary and secondary education. However, there is no consensus about the precise boundary between state and private responsibility. The recent protests against the rise in university tuition fees and the closure of local libraries clearly show that we have entered a period of disagreement and discord that is likely to last for at least as long as it takes to eliminate the structural deficit in the UK public finances.
Any discussion about the role of public services has to take account of the cost of providing those services and our ability to fund them from taxation and other sources. The starting point has to be the size of the deficit. In 2010, the UK had the third highest ratio of borrowing to national income of any high income country. Post recession, public expenditure has risen to nearly 50% of GDP, while receipts from taxation and other sources are less than 40%. Put another way, in round terms we have to borrow one pound for every four pounds we spend on public services. Accumulated historical debt is not the issue – the problem we need to tackle is the gap that has opened up between income and expenditure and that is causing the national debt to grow rapidly, month after month and year after year.
One option would be to increase taxes to make up the shortfall, giving us the freedom to debate the role of public services within a generous overall funding settlement. While that may be possible in theory, in practice it is a luxury we do not have. None of the main political parties advocates a massive increase in taxation. It appears to be generally agreed that tax cannot be pushed significantly higher without damaging the competitiveness of the UK economy and/or fatally damaging the prospects of any party that champions such an increase.
So the exam question has to be rephrased as follows: ‘What should be the role for public services within a constrained spending total of not much more than 40% of national income?’
In principle it should be possible to improve efficiency and productivity within the public sector to a point where most of the front-line services currently funded by the state can be provided within the resources we have available. However, that will require a transformational change that will inevitably take time and considerable political and managerial will to implement. And if we succeed in rising to that important challenge, the current pattern of provision will still have to change. We cannot modernise and improve our public services if we can never close a hospital, a school or a library, or reduce the scope of the services provided in one location in order to create a centre of excellence in another.
The cuts have scarcely begun to bite, and yet we already have plenty of evidence that once a service is publicly funded, the beneficiaries of that service – the providers as well as the recipients – will fight tooth and nail to protect it. Perhaps the lesson is that we first need to get comfortable with the overall level of public services we can afford before we can hope to reach consensus about the specific services that are provided within that funding envelope and the balance between public, private and voluntary provision.
The ground war of practical policy
Ian Mulheirn, Director, Social Market Foundation.
Last week saw the launch of the long-awaited white paper on public service reform. As a vision of how to achieve better public services at lower cost there was much to like. But while the Government’s wonkish principles are the right strategy for reform, the air war is being undermined by disorganised retreat in the ground war of practical policy.
Open Public Services talked a lot about the virtues of choice. And that’s right. Aside from the empowerment that comes with the right to choose, by allowing individuals to take more control over the public resources that are expended on their behalf, it is possible to reward and propagate good practice and cut out poor services. Evidence suggests it is the poor, not the sharp-elbowed middle classes, who can be best served by this agenda.
But choice is a mirage unless policymakers deal with the supply side of the equation. We cannot have better and cheaper public services, nor can we have citizen choice, unless there is flexibility by which new providers can enter and failing ones leave the market, freeing up precious resources. Yet policy on the ground is failing to live up to the rhetoric. Three recent examples demonstrate worrying trends. F
irst, there’s the Napoleonic health reforms. Unfortunately, the cacophony of opposition to the proposed reforms risks undermining the best parts of the Government’s plans: those that foster choice and competition. Last week it emerged that hospital failure procedures – previously planned to be a rigorous and speedy commercial-style regime – are to be relaxed at a cost of £500m per year, protecting poor performers at the expense of patients, and restricting choice.
Second, the reforms to Higher Education have caused the Government a lot of pain without delivering the full benefits of a market. While the Government has given universities freedom to charge much higher fees, quotas on student numbers heavily curtail the freedom for students to decide where to go. The dead hand of the quota, even under BIS’s proposed reforms to make it more flexible, will prevent the HE ‘market’ from delivering for students.
A third example is Michael Gove’s Free School insurgency. The Government’s unwillingness to take on opposition to the involvement of private capital means that the scale of the reforms looks set to be limited. It is impossible, in the current fiscal climate – or indeed the post-2015 fiscal climate if the OBR’s fiscal sustainability report is considered – to imagine that school capacity will be sufficient to allow choice to operate without private finance.
On each front the pro-market agenda is being thwarted. It’s not an argument for unfettered free markets to recognise that liberalising the demand side without similar reforms to the supply side will result in few, if any, of the benefits that choice and competition can deliver.
Despite the welcome sentiments of the Open Public Services White Paper, it’s easy for the strategy to get derailed by tactical or political necessity. That’s what we’re now seeing happen. The Government needs to get a grip on these reversals if its reform programme is to be as effective as hoped. If it doesn’t, it won’t be just the reform programme that’s in full retreat, but the deficit strategy too.
[This article first appeared in the July 2011 Social Market Foundation newsletter.]
View from a community entrepreneur
Sian Lockwood, Community Catalysts
The role of public services is already changing. In the past the public sector had a central role in determining local priorities, deciding how public money is spent, assessing need and commissioning individual services. But recent policies introduced by consecutive governments are ‘personalising’ the control of financial decisions in public services (direct payments and personal budgets). Building on that the current Coalition is further reducing the role of the state and giving power to local people, not just to define the priorities for spending in their community but also to design and deliver the solutions.
We at Community Catalysts work across the UK to help local people develop sustainable entrepreneurial solutions for other local people who need some support to live their lives as full members of their community. These solutions are comparatively low cost, highly personalised and designed with the person buying the service. They are important not just in giving people choice of imaginative, good quality, local services but also in helping them make their money go much further. They are a source of local jobs and volunteering opportunities and provide a route into employment for people. They are an example of a way of working that can provide ‘more for less’ – a sought- after approach in these financial straitened times!
In our experience local communities contain fantastic amounts of creativity and skill and with help can create and deliver great local services which are more personalised and better value than the services delivered by the public sector. The government recognises this and is strongly encouraging the public sector to move away from the role of service deliverer, forcing the public sector to relinquish some of its traditional roles.
As this public sector power is lost important new roles are opening up for other sectors including our own.
The future role of the public sector
Communities need the public sector to provide the enabling environment and infrastructure which will allow local people to define local priorities and develop and deliver local solutions. Communities need help from government and local authorities to clear away barriers to enterprise and provide practical support to help local people turn ideas into legal and sustainable enterprise.
Though the public sector retains its duty of care, we know that traditional approaches to safeguarding, risk and quality assurance can strangle enterprise and prevent people living the lives they want to live. Some local authorities are beginning to see that their duty of care can best be fulfilled by helping providers to demonstrate their safety and quality and providing clear information so that people who need support – whether self funders or publically funded – are able, with help if necessary, to make good judgments and choices and make the best possible use of their money. That new approach to safeguarding involves letting go of direct control and there is inevitable concern about blame if ‘something goes wrong’. Blame is not just apportioned by government but by the public and the media and there will need to be intelligent public debate in order to ensure that these new roles for public services are understood and supported. Otherwise the creativity and self determination of communities and of people who need support will be blocked – and we literally can’t afford that to happen.
