Friday, 15 July 2011

A First Reaction To Open Public Services

So, the white paper about the new era for public service delivery has finally been published. It slipped out in a week when other news dominated the agenda. Public service reform doesn't match the implosion of the News of the World in terms of headline grabbing, and while the News of the World implications may yet be far-reaching, arguably the white paper could be even more so. So when it comes to public service reform was this a good week to bury bad news, or just the opposite?
It's about reform, apparently.

First off - will this usher in the prospect of a customer-driven approach, as discussed in last week's blog? Well, from what can be divined from the white paper itself I'd say it's a cautious yes. Starting with the foreword Messrs Cameron and Clegg exhort:

"So reform of public services is a key progressive cause. The better our public services, the more we are helping those most in need. That is why those who resist reform, put the producer interest before the citizens’ needs, and object to publishing information about how services perform are conspiring to keep our society less free, less fair and less united."

Not much room for doubt there that citizen interests are ranked above those of the producer-led bureaucrats and professionals. But is the paper as assertive about citizen power trumping political power too? About letting localism develop in ways that may be uncomfortable for our local, or national holders of political power? Well, my read of the text says, probably not - at least not
yet. But this white paper is now at the consultation phase and maybe this will change as policy ideas turn into practical implementation.

Importantly, in this brave new consumer-led future, who is the preferred supplier of public services? Is all of this as the TUC claims, a charter for the break-up and privatisation of services, or should we accept the claims of the document authors who say that, "...we do not have an ideological presumption that only one sector should run services: high-quality services can be provided by the public sector, the voluntary and community sector, or the private sector." I'll leave it for you to decide what you believe.

Running a Housing Association, I never feel I know for sure which of these sectors - public, voluntary or private - I am actually in. What I do know is that any surpluses we make must be re-invested in more services and that the value of all the assets we hold is "locked" legally into our organisation, or one with similar aims and controls. And that's what worries me about pure private sector activity in public services. The private sector already provides many such services, and in some cases makes and distributes a handsome profit from that work. Further opening up of public services without a cap on the maximum level of profit that can be made and distributed from that activity seems to invite cherry-picking at best, and poor quality service delivery at worse.

As an example from another sector, take the drop in West Coast Main Line's on-board train service as Virgin's contract comes up for renewal and they try and squeeze every last drop of profit from it, in case they don't win the next franchise. An equivalent situation in housing would be difficult to imagine, and that's why a cap on profits seems to be such an obvious step to protect tenants. Logically, with that profit cap, must come an asset lock, so that not just the revenue from the assets, but the value of the underlying asset itself, is preserved for public - and not private - benefit.

Plenty of private sector organisations I know would readily accept this as a good deal. It's certainly what our response to this consultation will be arguing. What do you think?

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