The 2020 Public Services Trust Blog

In a few moments Gordon Brown will release his vision for public service reform. Billed as a radical move away from centralised provision and control towards greater localism, individuals will have the power to demand certain levels of service under new public service ‘entitlements’.

The concept of minimum standards of public services has seemed to come out of the blue. But entitlements are not a new idea. They have grown out of John Major’s Citizen’s Charter introduced in 1991 to guarantee formally the level of quality that services users could expect from public services. It was one of the first steps towards a establishing a more ‘user-centric’ system – although it left a long way to go. 42 national and over 10,000 local charters later, the Labour Government pushed on further when it took office in 1997. Yet even after a decade of targets, choice and voice, the citizen is still not truly at the heart of public services.

Many lessons can be learned from the Citizen’s Charter scheme, notably that entitlements must be clear, enforceable and realistic in their expectations of what can and can’t be provided. These points are all the more imperative in today’s economic climate. Perhaps it is due to their economic crisis firefighting by the Number 10 media team that entitlements and public service reform more generally has remained under the radar.

As such, last year’s Public Administration Select Committee (July 2008) report - ‘From Citizen’s Charter to Public Service Guarantees’ – was largely hidden. This report proposed the (re)introduction of public service guarantees and highlighted the fact that many commitments to minimum services were already in place (largely in response to a decade of Labour’ stop-down target regime). In terms of health, for example, the NHS Constitution (2008) laid down certain entitlements for patients. The Customer Service Excellence criteria, introduced without fanfare in the same year, replaced the Charter Mark of 1992. Both these initiatives sought to apply a standard which promotes excellence in public services, particularly from the perspective of service users.

That the Charter Mark and Citizen’s Charters are being replaced with variations on the same theme demonstrates the difficulty in enshrining service quality standards to meaningful effect. In particular, it begs several questions:
• To what extent will these universal minimum service level guarantees go further than targets?
• Surely their credible enforcement will require the same level of bureaucratic audit, regulation and inspection?
• To what extent will the public tolerate variation above and beyond these standards in other areas? (That is, will flexibility at a local level – expected as part of the decentralisation process – heighten the ‘postcode lottery debate’ all the more?
• How can the public be involved in the process of setting the bar for entitlements?

To get public buy-in of this long term evolving policy will require much better communication by the political class. At a time when long term cost drivers meet rising demand public service reform has rarely been more needed. But finance is scarce and the entire democratic due process is under threat. Clear and honest communication with the public is going to be just the starting point if these entitlements are going to be credible. Otherwise, they will fall into the abyss of political gimmickry and jeopardise the entire public service reform process. We can’t afford for our politicians to take that risk.

Before the flurry of commentary begins on Building Britain’s Future, I wanted to flag up a really interesting edition of File on 4 broadcast yesterday.

The programme unpicks the economics of the private finance initiative – which has been at the forefront of Labour’s public investment strategy (despite initial criticism when in opposition). Now that figures across the parties are questioning the benefits and drawbacks of the strategy, it seems a good time to re-visit the economic arguments that made it look so attractive in the first place.

So without spoiling the experience… the programme looks into why the cost of such schemes have gone up, including uncovering some surprising assumptions built into the system (optimism bias anyone?), and a comparison with the directly Government funded Glasgow Southern General hospital. It concludes with reflections on the need for greater clarity within the Government’s budgeting and accounting procedures – between which the cost of PFI financing can often be hidden from the balance sheets. Dramatic stuff, and worth a listen.

The new Speaker, John Bercow, presided over his first Prime Minister’s Questions earlier today and seemed determined to keep political mudslinging to a minimum. Bercow is attempting to restore confidence in our parliamentary democracy and remove the elements of “Punch and Judy” politics that often alienate the public from the system. Meanwhile, our economy continues to sit in the doldrums and the OECD has just declared that we are likely to experience a sharper recession than previously forecast.

Restoring public confidence in our economic, financial and political systems will be a tall order, but is the immediate challenge of our time. It is a challenge that Harvard Professor Michael Sandel has approached in the 2009 Reith Lectures.

In his series entitled ‘A New Citizenship’, Sandel argues that we need to rethink the role of markets in achieving the ‘public good’. He asks us “to think through the moral limits of markets,” and “to recognise that there are some things that money can’t buy and other things that money can buy but shouldn’t.” Sandel gives two good examples of the latter.

1. In America some schools are incentivising children to learn by paying them $2 for every book they read or $50 if they get a good score on standardised tests.
2. The Noble Prize winning economist Gary Becker has suggested that citizenship could be bought for a large fee. Becker argues that immigrants willing to pay such a cost would probably have desirable characteristics – youth, skills, ambition and diligence. They are unlikely to have to make use of welfare or unemployment benefits.

Sandel is right to question the role that markets can play in reshaping our norms and values; once we marketise citizenship – do we undermine its intrinsic value? Does paying children to learn de-value education? Does it teach them that life-long learning is valuable and worthwhile in its own right?

If the current economic crisis marks “the end to market triumphalism” as Sandel maintains what does this mean for how public services are conceived and delivered (particularly in light of the UK political and fiscal crisis)? Should the state intervene if and only if the market fails (as neo-liberals suggest)? What are the appropriate structures of accountability? What are the responsibilities of citizens? What other potential sources of welfare are available to us? Finally, how (if at all) can these questions be answered within a coherent, new social settlement?

Sandel begs that politicians be brave and that they engage the public in a genuine discourse about the moral limits of markets. Once something politicians shied away from for fear of offending swing voters, such a discussion is crucial in mapping a route towards radical reform of public services within an ailing economic and political context. Sandel should be pleased to see that conversation is starting to happen.

The final lecture in this year’s series is on Tuesday 30th June, 9pm on Radio 4.

Today’s Wall Street Journal carries an opinion piece by Robert Reich on the progress (or otherwise) of Obama’s health care reform plan through Congress.   Ive been meaning to write about this for a while, and this mornings article prompted me into action…. 

Obama is effectively trying to re-model a system by inserting a public player into an already (mis)functioning market.  The problem is essentially two-pronged: first, lots of Americans (Reuters estimates 47 million) do not have access to health insurance; and second, the cost of the existing private insurance system is both expensive and variable.  A lengthy article in the New Yorker recently set out the issues at stake here. 

So Obama’s intention is to establish a public insurance plan.  This would compete with private providers, providing a new cost and quality bar for private competitors.  The American public would theoretically then be able to purchase their medical insurance from a truly competitive (and thus better value-for-money) marketplace. 

This sounds like a good plan.  As Reich suggests, it is driven by tinkering with the incentives that underpin the private insurance market.  Currently, these are quite self-serving, resulting in a steady increase in costs for the consumer.  Reich contests that “those opposed to public opinion should ask how private plans can ever compete (with the public option).  The answer is they can and they should.  It’s the only way we have a prayer of taming health-care costs.” 

There are other benefits to establishing a public player within a mixed market like this (as I argued in a New Statesman piece a couple of months back).  As well as potentially reducing entry costs to health insurance, access to the information that a public provider will generate can help re-configure a market around new measures of quality and outcomes. 

The obvious question hanging over all of this is cost.  How will a public plan be paid for?  And where will the burden fall in terms of potential tax rises?

According to Reich, “no one wants to raise taxes or even be accused of thinking about the subject. But honest politicians have to admit that universal health care will require additional revenues. The likeliest sources are limits on certain tax deductions and a cap on tax-free employer-provided health care.”  So for the plan to be realized, the Obama administration will have to annoy the pharmaceutical giants, US employers and the middle classes.  Good luck. 

Whilst we observe this debate from afar, we should recognize that this is a living, breathing example of the ‘hard choices’ spoken about so often – by politicians, and by thinktanks like ourselves.  We should all watch with interest, and hope that a progressive approach in this case can set the benchmark for creative reform in other areas. 

Sarah Tusa writes in the Times today on the thorny problem of Trident – which crosses our path frequently as an example of a ‘quick-win’ initiative for those looking to cut the fat from public spending. David Davis wrote about this in the FT in April, following a pre-Budget publication from think tank Reform. He argued that

“There is no firmer advocate of nuclear deterrence than me, but even I have some difficulty seeing the justification for a wholesale upgrade of Trident. Our system was designed to maintain retaliatory capacity after a full-scale Soviet nuclear onslaught. Now our likeliest nuclear adversary will be a much smaller, less-sophisticated state. Should not the costs reflect that?”

Maybe so, writes the defence consultant, but there are serious trade-offs to think through in scrapping the proposed Trident upgrade, as today’s article makes clear. First is the question of how much such a move would actually save, and how this compares to other large-scale (and seemingly more worthy) initiatives:

“Estimates of £30 billion and over … combine the capital cost…with the annual operating costs for a 25-30 year life… On the same basis, a comparable civil project, the 953-bed Norfolk & Norwich University Hospital will cost not £229 million, as announced in 1998…but £16 billion, including PFI charges, staff and equipment. Any debate should at least be on an apples-to-apples basis.”

The second trade-off is about global status. Tusa’s argument is that failing to replace Trident would relegate the UK to the status of a “second-rank” European country, raising the spectre of losing its seat on the UNSC. On top of this, jobs are at stake – “at least 15,000…could depend on the Trident replacement.”

Whatever the politics of the piece (and I am certainly not convinced by some of it), we should welcome a more sophisticated debate about the choices that face the next Government. There will always be difficult trade-offs to negotiate, and it is bordering on the disingenuous to suggest that ‘quick wins’ are possible even for controversial initiatives such as Trident or ID cards. As the author warns, “there are no easy cuts left in defence”. But wherever the axe falls across Government spending, none of it will be easy.