Public service reform in an age of cuts: where next?

The Liberal Democrat MP was speaking a party conference fringe event entitled “Public service reform in an age of cuts: Where next?” and was joined on the panel by Baroness Hamwee, former chair of the London Assembly, Nick Seddon of the thinktank Reform and Roy O’Shaughnessy, Chief Executive of CDG. The event was chaired by Chief Executive of ACEVO Stephen Bubb.

Norman Lamb opened his address to the fringe by advocating “the power of employee ownership”. Mr Lamb reminded the audience that he had argued for employee ownership for Royal Mail at a previous party conference and stated that he was proud this was now government policy.

Government was faced with a choice, Mr Lamb contended, between cut backs to public spending that would cause untold damage to public services or a fresh approach of cutting costs of public service provision in a “smart and innovative” way.

Bureaucracies, Mr Lamb claimed, would often cut front-line services in order to protect themselves from cuts. The government needed to intervene to prevent this occurring, the Liberal Democrat MP argued.

Referring to ONS analysis that found public service productivity had significantly declined over the last decade, Mr Lamb said that over the same period productivity in the private and voluntary sectors had improved.

This made a powerful argument for more private and voluntary organisations to provide public services, Norman Lamb suggested.

Drawing the fringes attention to a NESTA report on cuts and innovation in public services, Mr Lamb argued that innovation had produced productivity benefits in the private sector and that subsequently greater innovation was required in the public sector.

If the same level of innovation had taken place in the public sector as in the private over the last decade, then Mr Lamb asserted, £63bn worth of productivity savings could have been made. Big monopolies undermined innovation be it in the private or public sectors, Mr Lamb stated.

Mr Lamb offered that often in times of economic turbulence new providers emerge that completely change the way things are done.

Norman Lamb stated that the government should worry about outcomes not who the provider it and said that if private or third sector organisations could better provide a service then they should be allowed to do so.

Government should not be obsessive that the same model of service provision work everywhere and it should also devolve power where possible, Mr Lamb advocated. This would allow public services to be protected, maintained and enhanced, the Liberal Democrat MP said.

Norman Lamb stated that he had organised a forum for Norfolk public service providers to meet later in the year and he hoped that this would spark innovative service provision solutions that would in turn set the example for other parts of the country. This was, Mr Lamb said, competitive localism.

Mid way through his address, Norman Lamb invited Lord Victor Adebowale, chief executive of Turning Point to speak from the floor. Lord Adebowale stated that he could not fault what Norman Lamb had stated and said that the challenge was beyond bringing together budgets.

It was obvious, Lord Adebowale argued, that third sector providers had to create efficiencies and that there had to be a power and resource shift from council bureaucracies to communities.

To this end, Lord Adebowale asserted that communities must have a right to request to provide services and councils must have a duty to provide them the opportunity.

Lord Adebowale called for public service providers to implement innovation that comes from the customer and said that no one had found a way to encourage this approach across the board for all providers.

Taking the floor again, Norman Lamb said that successful third sector service providers should be named and celebrated.

The next panellist to address the fringe was Baroness Hamwee. The Liberal Democrat peer said there was a concern that the government’s credibility with the public was at risk as public service cuts were too closely associated with the need to reform public services.

Baroness Hamwee stated that she was troubled by the fact that local public service reform and taxation were disconnected in peoples’ minds and that this was perhaps caused by the fact that a low proportion of taxes in the UK were not raised centrally.

The Liberal Democrat peer said that central government would find it hard to let go of control of public services and this manifested itself in a centrally determined standards that did not give local providers the freedom to make mistakes.

On central government set targets, Baroness Hamwee said that these led to an inward focus by service providers rather than an outer focus on customers.

A further issue Baroness Hamwee raised was the sentiment that discrepancies in service provision from locality to locality or postcode lotteries were a bad thing.

Baroness Hamwee stated that these differences in public service provision were positive and should be considered a sign of autonomy and independence.

Local services could benefit from more service providers offering secondments for their staff and this would especially benefit the civil service, Baroness Hamwee argued. The Liberal Democrat peer contended that civil servants “didn’t know what the outside world was like”.

There was a limit to what the private sector could teach us on innovation for public service delivery and Baroness Hamwee offered the example of Ryan Air’s extension of travel services.

With the dispersal of public service provision, Baroness Hamwee said this posed problems for accountability of services and scrutiny.

Finally the Liberal Democrat peer said that volunteers had to be energised to take part in third sector public service provision and that more progress had to be made to facilitate the involvement of volunteers in their 30s and 40s.

The next panellist to take the floor was Nick Seddon of Reform. Mr Seddon argued that public spending cuts should not be about “salami slicing” instead big decisions had to be made for the public sector to stop providing certain services and the government to stop funding certain services.

Transferring the ownership of public service provision would “turbo boost performance”, Mr Seddon claimed, whilst greater contestability would lead to an outsourcing boom.

This outsourcing boom would create more competition for contracts and subsequently greater innovation, Mr Seddon said.

There were too many monopolies providing services in the UK, Mr Seddon contended and that this led to a “crowding out” for potential service providers.

Joined up society not joined up government was required, Mr Seddon said and a commitment to outcomes, to customers and to citizens was required rather than to facilities.

This posed considerable challenges for the government, Mr Seddon claimed and that this could be seen in the impending stand-off between it and trade unions.

The final panellist to speak was Roy O’Shaughnessy, Chief Executive of CDG.

Mr Shaughnessy said that work programme providers needed to offer public benefit as well as meeting their contractual service obligations and any providers that did not do so could not expect to win government contracts.

Following the panellists speeches the fringe was opened to the floor. Nick Seddon in response to a question on public sector cuts and public services said that there was a degree of romanticising front-line workers and given that they often were the largest cost to a public service provider they should be considered for cuts.

Mr Seddon warned the Government that it must inform people to expect changes to their public service providers. Continued silence in this regard, Mr Seddon predicted, would lead to public outrage.