The problem with public service "choice"

Choice without the capability to exercise drives a pernicious wedge between some users and others.

"Brick by brick, edifice by edifice, we are slowly dismantling the big-state" says Prime Minister David Cameron. In its place will be, if not the much-maligned "big society", then, well what exactly? If Tony Blair’s mantra going into the 1997 General Election was "education, education, education," Cameron’s fixation can be summed up as  "choice, choice, choice."

In criticising Cameron’s choice of strategy to raise standards in schools, hospitals and other public services, I don’t intend to defend the status quo. Of course there’s significant room for improvement, there always is. Nor do I seek to deny that in some cases non-state providers may be able to augment state provision where the latter is clearly failing. But in striving to raise standards we must ask whether the reforms being brought in are the right reforms, whether they’re likely to deliver said higher standards, and if so for whom.

In launching the next phase of the government’s Open Public Services programme, the PM asserts that in giving service users a choice between providers will give them control over how they experience the service and give the providers competitive pressure to up their game. The trouble is, this assertion is just that; there is very little evidence that choice and competition in themselves lead to higher standards in public services, and what little evidence that exists is of remarkably poor quality.

For every unpublished, non-peer-reviewed study that claims to show how choice and competition raise standards, you can find many rebuttals that expose methodological and empirical flaws. Take the now infamous studies claiming that competition for elective surgery (indexed not by a measure of choice itself but by geographic density of hospitals, a poor proxy at best) improves outcomes in mortality from heart attacks (through an unspecified mechanism); the papers show weak statistical correlations at best, not a causal relationship, and yet they’re unquestioningly cited as evidence that “hospitals in more competitive areas perform better on quality and efficiency than those in less competitive ones.”

The standard practice for resolving such a lack of clarity as to whether X (in this case the existence of patient choice in where they’re treated) causes Y (higher standards of care) would be to conduct a trial: give some patients choice, measure (and this is crucial) whether they actually exercise said choice, and see whether their medical outcomes are better than a group of patients from whom choice is withheld. I’m not the first to call for well-controlled trials of social policy (doctor and health writer Ben Goldacre is amongst those who have), but in the absence of reliable evidence to date, surely there ought to be trials to show just how effective choice can be in driving up standards?

Cameron makes more than an empirical error in promoting choice, however; his “instinctive belief” (sic) that consumers – or citizens as we used to be called – exercising choice in an open market will drive up performance and productivity results from a confused view of what constitutes a public service in the first place. The confusion is laid bare in Benedict Brogan’s defence of the Tory perspective on public service reform; Brogan reveals more than he perhaps intended when he says that under the proposed system of choice in services, the consumer "will be given the same kind of protections in his dealings with the public sector that he enjoys when he buys a television set or books a holiday."

With great power comes great responsibility, Peter Parker was told; well, under the Open Public Services regime, with Great Choice comes Great Voice – the corollary to choice of provider is voice to complain, transparency of data and help in finding out how to raise your voice, so to speak. All good things in themselves and fine if you’re buying a TV or booking a holiday, a robust complaints procedure might make TV makers or airlines up their game – but outcomes from public services are often only apparent several years down the line (think schools and healthcare for chronic conditions), at which point it’s too late for a complaint to the market regulator to make a difference. If the government is indeed to become more a commissioner in a market than a provider, as is Cameron’s intention, then if voice alone is the consumer’s redress then we must accept a widening in outcomes for those able to exercise both choice and voice, and those who are less capable.

And that’s the key. It’s a crass philosophical mistake to conflate public services – that deliver public good by pooling peoples’ risk, purchasing power and the benefits they get in ways that enrich society as a whole – with transactional goods that we consume largely for our own individual benefit. Cameron remains convinced that choice is the way to promote better services – but choice without the capability to exercise it is just a pernicious wedge driven between those comfortable enough to travel large distances and research their options and those who need good public services local to them. Choice, choice, choice says the PM – excellence, equity, evidence, say I.

Prateek Buch is head of policy and research for the Social Liberal Forum

David Cameron launches The Big Society Capital fund at The London Stock Exchange on April 4, 2012. Photograph: Getty Images.

Prateek Buch is director of the Social Liberal Forum and serves on the Liberal Democrat Federal Policy Committee.

Photo: Getty
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Scotland's vast deficit remains an obstacle to independence

Though the country's financial position has improved, independence would still risk severe austerity. 

For the SNP, the annual Scottish public spending figures bring good and bad news. The good news, such as it is, is that Scotland's deficit fell by £1.3bn in 2016/17. The bad news is that it remains £13.3bn or 8.3 per cent of GDP – three times the UK figure of 2.4 per cent (£46.2bn) and vastly higher than the white paper's worst case scenario of £5.5bn. 

These figures, it's important to note, include Scotland's geographic share of North Sea oil and gas revenue. The "oil bonus" that the SNP once boasted of has withered since the collapse in commodity prices. Though revenue rose from £56m the previous year to £208m, this remains a fraction of the £8bn recorded in 2011/12. Total public sector revenue was £312 per person below the UK average, while expenditure was £1,437 higher. Though the SNP is playing down the figures as "a snapshot", the white paper unambiguously stated: "GERS [Government Expenditure and Revenue Scotland] is the authoritative publication on Scotland’s public finances". 

As before, Nicola Sturgeon has warned of the threat posed by Brexit to the Scottish economy. But the country's black hole means the risks of independence remain immense. As a new state, Scotland would be forced to pay a premium on its debt, resulting in an even greater fiscal gap. Were it to use the pound without permission, with no independent central bank and no lender of last resort, borrowing costs would rise still further. To offset a Greek-style crisis, Scotland would be forced to impose dramatic austerity. 

Sturgeon is undoubtedly right to warn of the risks of Brexit (particularly of the "hard" variety). But for a large number of Scots, this is merely cause to avoid the added turmoil of independence. Though eventual EU membership would benefit Scotland, its UK trade is worth four times as much as that with Europe. 

Of course, for a true nationalist, economics is irrelevant. Independence is a good in itself and sovereignty always trumps prosperity (a point on which Scottish nationalists align with English Brexiteers). But if Scotland is to ever depart the UK, the SNP will need to win over pragmatists, too. In that quest, Scotland's deficit remains a vast obstacle. 

George Eaton is political editor of the New Statesman.