How outsourcing can reduce real choices for people using services

In recent posts we’ve been exploring the tensions between two competing Government agendas – for so-called ‘open public services’ and ‘open policy-making’. Choice is supposed to be a central part of the Government’s agenda to open up public services to greater competition in order to improve outcomes, quality and efficiency. In this post we explore three ways in which outsourcing can actually reduce real choices for people using public services.

You might have missed it, but in June the Cabinet Office announced an independent review led by David Boyle into the barriers to choice in public services. The review is looking to address the factors that prevent people from understanding and exercising the choices available to them in a range of public services. But the review does not address another pertinent question: how ‘open public services’, especially outsourcing, can reduce real choices for the public.

Firstly, there is no getting away from the impact of the cuts, which are creating poor choices for users of public services. For example, local councils are due to make cuts of about £2 billion to adult social care budgets between 2011-13, with £890 million coming out this year alone as part of the Government’s deficit reduction programme. Outsourcing services to non-public sector providers is seen as the main way to reduce costs.

Take this example: domiciliary care services (care in the home), much of which is outsourced, is one area that has borne the brunt of cuts. Hourly rates for dom care have dropped in some parts of the country to as low as £10-12 per hour. From a provider point of view, the only way to make these contracts work financially is to increase the volume of customers and reduce costs. Given that the majority of cost is staff time, this means becoming a minimum wage employer and reducing staff terms and conditions – a move that many charities and private sector providers are (being forced into) making. It also means cutting the time allocated for care visits to under 30 minutes and sometimes to less than 15 minutes.

Rationing of social care has also meant the things that people want to choose – for example social contact or help with domestic duties such as housework, shopping and gardening – are not available unless they can afford to pay from their savings. According to Age UK 33% of older people report feeling lonely, with this figure increasing to half for those aged over 80. It’s obvious that a 15 minute visit doesn’t leave time for a conversation.

Outsourcing based on price is bound to affect quality. A review into choice and competition in public services by the OFT found that competition based on price alone is likely to lead to a deterioration of quality. This is backed up by the results from a survey conducted by the National Care Forum of 40 social care providers this week, which showed that the social care workforce is rapidly ageing, and that there has been a hike in staff turnover rates. Given the unsociable hours and low pay, social care does not tend to be an attractive career option for young people. 46% of care staff are aged 46 or over, whilst turnover rates for domiciliary care for older people has climbed to almost 28%.

Secondly, information about services available is fragmented. It is well documented that advocacy, information and advice services are withering on the vine as a result of the cuts. Yet good quality information and advocacy support are integral to supporting choice. Information about providers is hard to find with services such as Find Me Good Care, Shop4Support and the Good Care Guide in their infancy. The Government has been reluctant to invest in services such as these – the Social Care Institute for Excellence has invested their reserves into Find Me Good Care instead. Providers have also been agnostic about these services as many of them find business through word of mouth or local authority referrals. Yet without adequate market information, real choice for service users will be undermined.

The views of service users are not always well understood or captured by services. Take another sector as an example: 11,000 pupils are placed in out of authority special schools at an annual cost of £572 million. A review of this market by the Audit Commission found that young people were rarely asked for their opinions or offered choices. Instead, choices are made by parents and professionals, not the young person themselves. Many young people want to be placed nearer to their family but the concerns of their parents tend to take precedence.

Thirdly, the ‘bigger is better’ approach to outsourcing is reducing real choices for people. The outsourced public services market is maturing around a group of large providers who are increasingly too big to fail. The Government is ever more reliant on providers such as Capita, Atos, A4e, Serco and G4S, who alone have the scale and funds to absorb the risks associated with this ‘bigger is better’ approach to outsourcing. A4e now delivers services across welfare to work, adult social care, information and advice and offender management. The dominance of these providers crowds out small charities and providers who cannot compete on a level playing field, which again reduces choice for service users but also commissioners of services.

Choice is nothing new of course; successive governments have embraced it as a way to improve performance across a range of public services, and in one sense the current Government under its open public services agenda is only continuing this trend. But after nearly 30 years of promises of increased choice – often to be achieved through increasing amounts of outsourcing – many of the actual choices available to the public seem less and less appealing. The one choice we don’t seem to be being offered is the political choice to challenge this agenda – for the users of services and the professionals who deliver these services not to be subject to imposed ‘choice’, but rather for them to be able to determine together how services can be improved and for policy wonks to get out of their way. Perhaps the Cabinet Office could add this type of choice to its review, if it is allowed to.



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