Reforming our public services

As the post-Budget dividing lines become ever clearer, there seems to be a gradual re-emergence of i

The Chancellor's recent Budget appears to have spurred the commentariat into life, prompting several editorials playing on the emergence of real dividing lines between Labour and the Conservatives, and a potential rebirth of ideological politics.

Such a debate should be welcomed, but we must guard against it simply being a debate over who can make the biggest efficiency savings, or who would trim the most from departmental balance sheets. What we need is not a quick fix for the fiscal crisis, but rather a longer-term approach, underpinned by a coherent vision of a new public services settlement.

Our starting point should be to move away from the idea that reductions in spending must inevitably reduce the level of support the state provides its citizens. This depends on where and how cuts are made, and extent to which new types of resources can be mobilised. Squeezing budgets can create momentum for change; and momentum for change can create space for creativity and innovation.

Reformers are well versed in the idea that private and third sector involvement can radicalise public service delivery, and we should be open to more creativity in this area. At the same time though, we should recognise that, given the right incentives, the public sector can also demonstrate innovation and value.

A new report from the think tank Compass offers an intriguing case study here, based on the experience of Newcastle Council’s ICT department over the last nine years. 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 the council’s ICT infrastructure.

The example suggests that public sector professionals can be drivers for change, not only barriers to it. And there is evidence in other areas that this can be the case. For example, the formation of the Central Surrey Health Partnership – a nurse-led social enterprise - has allowed nurses to escape frustrations over bureaucracy and restrictive working practices, and apply their passion and commitment on their own terms.

A public sector presence within a mixed market – such as Remploy within the Flexible New Deal – can also be of long-term benefit. Just as private sector dynamism can revitalise a providers market, so public sector experience of service delivery can help raise the quality bar.

Across all of these examples, incentives are key. For the private sector, profit margins will always provide underlying motivation. But for public sector providers, aligning incentives has been more problematic. The fiscal crisis must inevitably challenge this, sharpening incentives for public sector innovation.

So where does this leave us?

Firstly, we need to recognise that a long-term approach to public service reform should welcome innovation and creativity wherever it comes from – what is important is the services, not necessarily which sector delivers them. Secondly, we should recognise that choice and competition are not exclusive to (nor do they inevitably require) private sector solutions. If our starting point is to provide a better service at better value, we should be open to whatever solutions are optimal – private, third sector, or public. Thirdly, we should prioritise and strengthen structures of local accountability. This can drive effective reform, and better represent the needs, values and capabilities of service users.

Our parlous financial state provides ample catalyst for public service reform. But let us plan this in a far-sighted, joined-up way – with our telescope pointed at the medium term, not just the next parliament. Rahm Emanuel’s now oft-used quote on the folly of wasting "a good crisis" is truly appropriate to these times. If we take a scalpel to our services without a coherent vision of the future, then we risk not only wasting an opportunity, but short-changing ourselves in the future. Now is the time for the public sector to demonstrate its capacity to help shape the debate.

Dr Henry Kippin is Commission Manager to the Commission on 2020 Public Services at the RSA