Public sector reform hits the buffers

The pause in the government’s programme for the NHS is making the news at the moment but it seems that other public sector reforms have stalled too. Yesterday, Patrick Butler asked ‘Is it all over for local government reform?’ after a number of councils back-pedalled on radical proposals, in the face of public opposition. The most high-profile of these was Suffolk County Council which, after raising the ghost of Nicholas Ridley last year, was forced to put its plans on hold and announce a “period of reflection” (sound familiar?) to reassess its ‘virtual council’ strategy.

Consultant and former local government officer Alex Khaldi agrees:

Radical visions of organisational change in government are foundering; and whilst the lessons in each case are different, from Inverclyde Councils Future Operating Model, to Suffolk’s New Strategic Direction and even to the Lansley healthcare reforms, we are seeing major challenge to bolder, more certain visions of change.

The voters, it appears, are not keen on the idea of public services being provided by private companies and they are far from convinced that third sector provision and the Big Society are anything other than a cover for privatisation and cost cutting. There is also some cynicism about social enterprises, as Suffolk blogger Andrew Grant-Adamson notes:

There is also a feeling that what Butler describes as the “nascent social enterprise movement” is an alternative bureaucracy in waiting. They talk in a jargon ridden language just like the people in council offices and that does not engender confidence.

Patrick Butler fears that the voters’ scepticism may scare councillors away from the whole idea of reform:

[H]ow can the government persuade council leaders and their employees that salvation lies this way? Local politicians and chief executives will look at the wreckage of Suffolk – and the careers of those dragged down with the ship – and wonder if it is worth the risk.

[A]lready, drawbridges are being pulled up. One senior Tory politician I spoke to last week explained that planned reforms in his council were being toned down because with two years to go until the next local election it was “time to turn for home”.

How different this all seems from last summer, when social innovation was the new rave. Back then, all we needed to do, it seemed, was lob in a load of ingredients like transparency, empowerment, information, local accountability, community relationships and devolution, add a bit of web 2.0 technology, take away a bit of red tape, then get some hip young social entrepreneurs to stir the mix and, bingo, cheaper and better public services would emerge from the pot. If we just got a bit smarter, we could deliver more with less.

I said at the time that this was madly optimistic. It’s hard enough trying to transfer activities between existing organisations. Creating completely new forms of organisation and expecting them to deliver vastly more efficient services was unrealistic. The shifts in power relationships and radical new ways of working would require corresponding shifts in attitudes and behaviours, none of which would happen quickly.

I have written at length (here, here and here) about why it is difficult to make productivity improvements in public services. It’s not that easy in the private sector either. Yesterday, the LSE’s Tony Travers said that it could take a decade for councils to reconfigure their services to deliver significant efficiency savings. Given that it took private sector service companies on average ten years to improve productivity by 20 percent, his estimate is probably about right.

None of this is to say that the reform of public services is impossible. It isn’t. People have done it before. It’s just that it takes a lot longer and requires a lot more thought and investment than the government and it’s quick-fix merchants wanted us to believe. A year in, the enormity of the task is becoming apparent. The sweeping and rapid radical changes don’t look quite so simple now.

Reform of the way we deliver public services is imperative and has been for years. Demographic, fiscal and environmental pressures mean that public services will have to be delivered more cheaply. You don’t need to be a ranting right-winger to conclude that there simply won’t be enough money to deliver a 2009 level of service to the population of 2030. Politically non-aligned organisations such as the 2020 Public Services Trust, NIESR and the IFS have concluded that, on top of George Osborne’s proposed cuts, further reductions in public service spending will be needed by the early years of the next decade. Put simply, if the public services were left as they are and given inflation linked increases for the next ten years, the increasing demands on them would eventually cause them to collapse. Given that the state can’t even afford to do that, the case for reform is compelling.  

There is little doubt, then, that the public sector needs reform and will need to reduce its costs significantly but grandiose ideas and headline catching announcements won’t make it so.  Such a far-reaching reform will require new structures, new skills and different behaviours. Above all, it will require clear-headed thought, investment and time to make it work. It won’t happen overnight. If even the gung-ho reform enthusiasts are beginning to see that, there may be some hope for real progress after all.

Update: David Walker reckons that the efficiency drive has stalled in central government too.

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2 Responses to Public sector reform hits the buffers

  1. Pingback: Public sector reform hits the buffers - Rick - Member Blogs - HR Blogs - HR Space from Personnel Today and Xpert HR

  2. Gary Walker (@Modernleader) said to me yesterday:

    Perhaps Lansley ought to have had these consultation events before the Bill as Unison tried to make him do? #KillTheBill

    It does make you wonder, doesn’t it?

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