News and Comment

Achieving the best of both worlds: a summary of our latest public interest seminar

Thursday 30 May 2013

The question of how public services can become more commercially successful without compromising their values is an issue that the public sector is increasingly being forced to confront.

This is not simply due to the effect of austerity, though undoubtedly this is a major cause, but also the impact of an aging population. Both of these factors mean that for better or worse, public services have to change, and one of the ways in which they can do this is through the adoption of more commercial practices.

On Tuesday evening at OPM’s offices a panel of health, local government and private sector experts – chaired by Barbara Moorhouse, Chief Operating Officer at Westminster City Council and Chair of the OPM Group – participated in a high quality and (at times) relatively heated debate on this issue.

“Councils are not just selling their assets, but sweating them to create income streams”

Carolyn Downs, Chief Executive of the Local Government Association made the point that whilst councils are already doing a great deal “not just selling their assets, but sweating them – to create income streams moving forward”; the financial challenges faced by local government are so great that it is too simplistic to suggest that adopting techniques more common in the private sector can alone solve them.

There was a general feeling from the strong local government contingent present that these financial challenges look set to become worse, (following the June Spending Review), and that local government as an area is being singled out for disproportionally tough treatment. As Carolyn put it: “we are not even trusted to know the date on which our budget settlement is going to happen, never mind to participate in the debate around it.”

“We need a quantum leap, not incremental change”

Jonty Olliff-Cooper, a former Director at A4e and an expert on independent sector involvement in public services also felt that the scale of challenges public services face necessitatesa quantum leap, not incremental change.”

He went on to point out that the comparison between the public and private sectors is not always fair and is often weighted in the advantage of private companies: “A core private sector value is strategy – choosing what things to do. Many public sector organisations can’t do this.” This latter point was echoed in questions from the floor, with one attendee pointing out that the public sector has to provide services that no private company would ever dream of becoming involved in. Another made the point that the private sector has more levers at their disposals to raise income than the public sector.

The difference between what public and private sector organisations have the capacity and capability to do was also picked up by John Lee, Director of Clinical Solutions at Serco Health in his opening remarks. Reflecting on the differences in attitudes and budget available for innovations between his current role and his previous position in the NHS, he said:

I used to have to beg, steal and borrow to try and bring innovations into hospitals in the NHS, contrast that to Serco where I don’t get asked ‘Is this a good idea?’, but ‘Can we buy the company?’

Does the public sector make issues too complicated?

A question from the floor on the public sector’s tendency to overcomplicate issues gained particular traction with the panel. There was a general sense of agreement that public services could spend more time on making things simple, and possible reasons for this not happening were seen to be overly-complicated and frequently changing management structures, and a failure to share best practice or engage in effective peer-learning. Participating in the debate online via Twitter, the consortium of non-foster agencies Fostering through Social Enterprise, made the point that this criticism tended to ring true for Children’s Services.

“Please, no change”

Another key area of debate was the political will (or lack of it) for the changes required in public services. One attendee askedwhat can be done to get politicians onboard with the sometimes unpopular change agenda. They expressed concern that public service leaders were being told “please, no change” by politicians fearful such policies would damage their chances of re-election.

In response the panel cited examples of councillors who had pioneered innovative change programmes only to find themselves unelected next time round. A number of possible solutions were put forward including: ending elections “by thirds”, so that councillors had a longer timescale between elections in which to make potentially unpopular decisions; and increasing levels of remuneration and devolving more decision making responsibility to local leaders, to improve the quality of candidates within local politics.

As ever, due to time constraints, there were issues which we had only a brief opportunity to touch on. For instance questions relating to how we define and quantify the values of the public sector, and possible improvements which could be made to evidence-based decisions on making efficiencies.

We would welcome the opportunity to keep these conversations going and would encourage those interested to leave their comments and questions below. We will also be uploading a series of short video interviews with all panel members and the chair to our website in due course.