I’ve recently returned from doing a presentation for the Housing Action Charity (HACT). The presentation was ostensibly about social return on investment and it made me laugh because the invitation said, “I don’t know what you know about social return on investment, but I’m sure you’ll have something interesting to say!” I’m flattered by the assumption that I am the go-to person for filling a gap in the schedule!
As it happens I didn’t know masses about the topic but it’s amazing what you can learn quite quickly! Taking social return on investment as the central theme I started looking at what mattered when making investment choices around public services and came up with a view that different things mattered depending on which model of public services was dominant at the time.
In essence there are three models for the delivery of public services.
1) Professionals know best
2) Politicians know best
3) Customers know best
I reflected on the span of my working life and tried to see when these different models had been apparent through my career. The first conclusion was that during the 1980s and pre-Blair 90s, the model that existed was undoubtedly professionals know best. Margaret Thatcher had privatised services and as a result much had come out of government control and into technocratic control by professionals. There wasn’t a huge amount of government funding around, so there was no legitimacy for the politicians to say “I’m giving you the money, therefore I’m micro-managing the delivery of the services.” Regulation was pretty hands-off. And there was certainly no strong consumer voice. Tenants were viewed as “clients” (as an aside, I well remember the incomprehension among some of my fellow staff when in the mid 1990’s the terminology started to change to “customer”). Evaluating investment opportunities meant showing the professionals that it was the right thing to do.
From 1997 to 2010 everything changes. The funding tap from the government gets turned on and there’s a huge swing towards central prescription of the standards of services. In the guise of avoiding a postcode lottery, every delivery organisation, wherever they were and whatever the context they operated in had to conform to one centrally determined “best way” - an almost obsessional control from the (not always particularly well informed) politically-driven centre. Regulation sprang up everywhere to enforce this and while the consumer voice was starting to come into effect it was still really in a pretty mealy-mouthed kind of way. Evaluating investment opportunities meant that politically-driven policy outcomes had to be shown to be delivered.
From 2010 onwards the mood appears to have changed again and I ponder – are we on the dawn of a time of a consumer-based model of public service delivery? There’s a lot less money from government sources than once there was, so there’s no real legitimacy for the politicians to exercise the tight control of the first decade of the 21st century. With localism as the dominant political philosophy, post-code differences seem actively to be encouraged – providing of course the public have said they are what they want. The regulators have all but gone. This absence of government and regulation has left a gap and while the accountants and their obsession with costs will always be there, the only thing that can really fill it is a focus on customers.
It’s leaving space for organisations to decide their own direction, in direct response to their customers – allowing, or maybe even requiring organisations that were once part of a one homogenous sector, to position themselves in different places.
So, in an era of consumer-led public services, will it be consumers who make the market through the actions they take in response to the choices they have? Will they be able to make those choices without the proper information about who to go for a particular service? How will they know who is best to go to in an era where markets, not regulators or politicians provide the choices?
This is where social return on investment comes in and why I concluded in my talk at HACT that now more than ever was the time when SROI needs to be used. It's not price, or cost, or financial return, or political outcome alone that measure a public service organisation’s “worth” but all of these and then some more. The sooner we have a system that measures this consistently, across organisations, the sooner we will all be able to see who the right organisations are, who are the good guys in this for the right reasons and not just profit, and so who the consumer should really choose.
Now that would be interesting, wouldn’t it?