The 2020 Public Services Trust Blog

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.

Whilst happily sitting in the doctor’s surgery this morning, my short wait was interrupted by a man rushing into the clinic in a state of panic – feeling a slight temperature and a sore throat he demanded to see a doctor immediately. On hearing that there were no more appointments available until the next day, he declared (in a very loud voice, not unlike someone who wasn’t struck with a lethal virus) that he had swine flu and he could be dead by tomorrow. He then followed this declaration with an impression of a pig – I kid ye not.

My utmost apologies in advance to this man if it transpires that he actually has contracted swine flu, which – ‘is all over London’ he told the whole waiting room…but I must agree with Simon Jenkins in the Guardian today, that the media hype surrounding the potential pandemic illustrates the very real effect that news editors have on the public’s perception of risk. Whilst I do not think it a conspiracy ’stoked in order to…spend’ our way out of global recession, the issue highlights the impact the media can have on our expectations of, and demand upon, public services.

This man thought himself an emergency case and the surgery could do little to refuse him. In previous blogs I have discussed people turning up to A&E; to see hospital practitioners about a small graze or slight ear-ache. As ever, I firmly support the availabilty of public services for all, free at the point of need in the case of the NHS – but essential reductions in the cost of running these services puts a even greater onus on the media to help people make informed decisions. Further to Henry Kippin’s blog (The Meaning of (post-Budget) Life, 28/04/09), hyperbole for the sake of a headline is not the way to start having a sensible debate on what can and cannot be afforded in the austere years ahead.

Happily for us, the budget has spurred the UKs opinion-formers into action over the need to think creatively about public services. On Saturday, the Guardian pointed to the lack of a guiding vision underpinning the Conservatives’ response to our fiscal crisis, arguing that

“Nobody doubts that the Conservatives have the stomach to axe services. But they are strangely silent about the principles that would guide them when deciding what to spare.”

Maybe true, but the government is hardly in a position to offer us a coherent set of principles for a post-cuts future either.

Yesterday’s FT editorial picked up on this, calling for a ‘contest of ideas’ on the future of UK public services. But it would be naive to think that our political parties will share the same stomach for this fight, particularly during an election campaign.

This reluctance is borne of a fear of being outflanked or overtaken by economic events, but is also, as the editor suggests, in part ideological. Although both Labour and the Conservatives are clear as to the need for parsimony in public spending, neither party can yet claim a united front, nor a coherent vision of the future.

Yet it is precisely this kind of joined-up approach that is required to get us through the coming era of austerity. Decisions on public spending must be underpinned by long-term thinking, grounded in a better understanding of the relationships, resources and responsibilities that will shape our society.

For either party to move forward without such a vision would be disastrous – yet to expect this all to come from within the parties themselves is unrealistic. Hopefully the 2020 Commission can do some of this groundwork for them.

The Budget has removed the last excuse for continuing with the era of mutually assured denial (MAD) between the main political parties. There can now be no denying the scale of the challenge which Britain faces. The Budget set out the top lines about the scale of borrowing and public debt levels, which by any measure are pretty frightening.

Public services will go through the toughest period of retrenchment for at least a generation. Cutting the rate of public sector spending growth to just 0.7% from 2011 will be hard enough. The IFS have since revealed that when cuts in capital spending and the costs of borrowing and increased unemployment benefit are taken into account, this becomes not just a freeze but an actual reduction in expenditure.

This much both the Opposition and the Government accept. What neither will talk about openly is what are the real choices which will have to be made about public services in the future? As Nye Bevan said, “Politics is the language of priorities”, yet with the exception of Vince Cable, who has started to talk in these terms, none of Britain’s major politicians are yet setting out their stall about what their priorities will be for public spending after the next election.

Neither the Government nor the Opposition wants to surrender any ground to the other, they are like two crabs locked in battle standing at the edge of a cliff. Yet what might seem a safety first policy is fraught with danger. The next election will not be 1979 all over again. Whichever party loses this election is not likely to gift the Government with a clear run, whilst they get on with the more important business of tearing themselves apart, as Labour did in the early 1980s. Moreover, the causes of the current crisis cannot be all pinned on the Government and its wider hinterland – the bankers not the unions are the pantomime villains this time. So the danger for the Conservatives, should they win, is that if they haven’t prepared the way for and built a constituency for radical change in public services, then as soon as they try to signal a clearer direction they could quickly find themselves on a collision course with both public service workers and the public.

What both the Government and Opposition need to do now is move beyond the safety net of efficiency reviews and rhetoric about investment and debt levels to starting to spell out what a progressive approach to public service retrenchment would look like. This will involve setting out priorities and identifying where the pain will have to be felt.

A progressive approach to this ought to combine fairness with responsibility. The priority should be on spending which achieves the objectives of reducing inequality, and promoting social cohesion, security and sustainability. This will need to be balanced with people needing to take greater individual and social responsibility both for their own behaviour and for the contribution which they make to achieving social outcomes through taxation, co-payment and their own time. There is a growing sense that the public are ready for a very different type of debate about how we can emerge from this crash with a more sustainable society. All of this suggests that the important thing is not just to signal where one off cuts can be made but what the elements of a new deal between the citizen and the state might be. This is about the role of the state of markets and of society.

In terms of new directions, by far the most interesting development in the Budget was Sir Michael Bichard’s proposals in his Chapter of the Efficiency Review on Local Incentives and Empowerment. The era of the big, central British state trying to run ever more public services from Whitehall is surely now over and Bichard’s paper starts to set out an alternative direction. This is based on pooling local public services and effectively re-creating accountable local strategic government, which can make joined up resource and spending decisions at a level where they can really understand the impact these will have on people’s lives.

12 pilots are to be established to look at how public service can be better co-ordinated and more accountably run at a local level. At the same time, the Budget itself announced Manchester and Leeds will get the go-ahead to develop themselves as City Regions, along the lines of London. The Conservatives are committed to these City Regions having directly elected Mayors, which is still the missing piece of the local accountability jog saw. Below the radar a new model for decentralised public service administration and strategic local government is starting to emerge which will be more efficient, deliver better outcomes and finally offer the basis of an answer to the English question which devolution has posed since 1997.

But this is only one element of what will need to be an entirely new public service landscape. If politicians want to rebuild trust then they should start with being honest about what the real choices are which society will have to face over the next decade.

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?