How does outsourcing constrain open policy?

In the previous two posts we have asked if there is a tension between two competing Government agendas – open public services and open policy making. In this post we set out fours ways in which the current approach to outsourcing of public services can stifle open policy.

The ongoing saga surrounding the role (or more often, the non-role) of G4S in providing Olympic security has again highlighted that important aspects of outsourced public services – including performance and contract terms – are often hidden from public view behind a wall labeled ‘commercial in confidence’. This has significant implications for open policy, in at least four respects.

Firstly, outsourcing sometimes obscures performance. The Government’s flagship Work Programme is a case in point. This £5 billion programme has been heralded as a radical approach to reducing long-term worklessness. It uses a payment by results approach where providers are paid on achievement of outcomes. Providers have the freedom to decide how they will deliver the service without prescription from government (often called a ‘black box approach’). The problem is that effective transparent scrutiny is difficult because providers are not able to share data about what is working and what isn’t. They are required to sign comprehensive contracts, which prevent them from sharing performance data unless it is already in the public domain. Providers must also not attract ‘adverse publicity’ from their media work or face consequences if they do. Charities and media commentators have questioned this but ministers have refused to change this.

Rather than protect the policy in its relatively early stages, this has only served to intensify the questions as to whether the Work Programme is working effectively. Various charities are pulling out of the programme or going bankrupt, raising concerns about the viability and sustainability of the policy. Data leaked to Channel 4 News indicated that only 3.5% of individuals referred to A4e are securing a job outcome. The way the Department for Work and Pensions has released performance data about the programme has made it difficult to effectively scrutinize the policy overall, a view shared by ERSA – the welfare to work trade body.

Secondly, where public services are not provided by the public sector, this can result in data no longer being available to public policymakers. Francis Maude has argued that data belongs to citizens and not the state, but this hasn’t been reflected in all contracting processes. In a recent Q&A on open government Vicky Sargent from Socitm pointed to cases where council contact centres have been outsourced and the data about enquiries is no longer available to the council because it was not explicitly included in the contract. Vicky rightly argues that retaining the right to data from outsourced systems is critical.

Thirdly, what this reflects is that different providers are treated differently when it comes to transparency. Local Government departments are required to publish all expenditure above £500 as well as salaries of senior officials.  Similar rules apply to Whitehall departments but the same rules don’t apply to outsourced service providers. The Freedom of Information Act also doesn’t apply to private and voluntary sector providers, even though it would if the same services were delivered in-house. This inconsistency in applying transparency rules between services delivered by the state and those by the private/voluntary sector means that we are seeing ‘black holes’ open up in public service commissioning, to the detriment of public accountability.

Fourthly, this situation is likely to undermine the greater use of evidence in policymaking, for example Sir Jeremy Heywood’s desire to see a social policy equivalent of NICE that could issue social policy ‘kitemarks’ for particularly effective and proven approaches. How could such an approach be adopted consistently across public services? Knowing what works and what doesn’t could help the Government in its ambition to increase social investment in areas such as long-term worklessness, but this is unlikely to be realized if we aren’t able to analyse the performance data, costs and timescales across all programmes whoever provides them.

Transparency and scrutiny is not a luxury, rather it is essential if we are to understand whether policy is working and if it isn’t, how it could be improved. We need to understand the impact of public expenditure and whether it represents value for money. We need to make informed decisions, based on evidence, about existing and future policy. Policy will be weaker if a substantial part of the evidence base is hidden behind a veil of supposed ‘commercial confidentiality’. At stake is whether outsourced services are still ‘public’. If public money is being spent in the public interest, then surely how this money is spent should be transparent.

As we suggested in the previous post, the current situation has allowed a further serious problem to develop, of which the G4S fiasco is just one outcome – the emergence of a small, very powerful but somewhat unaccountable group of providers who have significant interest in public policy stemming from their role in delivering a range of public services from prisons, welfare to work, hospitals through to schools. Given their size and scope, independent and transparent analysis of the activity of these providers is essential if we are to scrutinize how this investment is spent and to what effect. Any future social policy equivalent of NICE surely requires a stronger and more secure foundation than this – something we will address in a future post.

We will be looking at each of the issues raised in this post in more depth in future blogs.  Please tell us what you think.


This is my truth, tell me yours

The title is (famously) from Aneurin Bevan, whose greatest achievement was leading the creation of the NHS. Bevan is the type of figure who people have in mind when they lament the current lack of conviction politicians – politicians who ‘tell the truth’ – in favour of what Bevan described as “desiccated calculating machine[s]” (widely assumed to be a reference to Hugh Gaitskell, who Bevan lost to in the Labour Party leadership contest after the 1955 General Election defeat). I was reminded of Bevan because I’ve been thinking about bravery recently, and how it’s important to politics – and also to this project.

A survey published this week by the Hansard Society revealed that only 42 per cent of people are interested in politics, down from 58 per cent only last year and the lowest since the survey began nine years ago. Ruth Fox, director of the Society’s parliament and government programme, quoted on the BBC news site said: “Worryingly, only a quarter of the population are satisfied with our system of governing, which must raise questions about the long-term capacity of that system to command public support and confidence in the future.”

We’re so used to hearing about public disengagement from politics that it’s possible you might have scanned over the previous sentence, so read it again to appreciate its full significance. Is this what the hollowing-out of democracy feels like? What solutions do we have to the malaise?

Some people suggest we need more openness and transparency about what government does and how it makes decisions. Disillusionment and disengagement isn’t reserved to the UK of course, though it differs from country to country. This week the annual Open Government conference has been taking place in Brasilia. The conference is organised by the Open Government Partnership (OGP), a global initiative towards openness and better governance established last September (the UK has just taken over as co-chair of the OGP). The initiative’s Open Government Declaration commits signatory countries amongst other things to increase the availability of information about government activities and use ‘new technologies’ for openness and accountability. There’s also a heavy emphasis on ‘open data portals’ and the like in the ten most common pledges for action made by participating countries by 2013, and the UK Government is particularly hot on open data and greater transparency.

These initiatives are unarguably good but also feel insufficient given the extent of public detachment. Open data can seem like a technical solution to what is ultimately a political, social and even economic problem – a stand-in for the openness we want in policymaking. Creating easier ways to find out what government has done after it’s done it is important, but we also want to determine more directly what government does in the first place. In the UK at the moment this mainly means debating the case for directly elected mayors and a reformed House of Lords (elected or otherwise). But plenty of other ideas have been proposed for new ways to participate in decision-making. Here’s a couple of recent examples from thinktankland:

  • This week Green House think tank staged a mini mock version of its Guardians of the Future ‘super-jury’ as proposed by Rupert Read from the University of East Anglia. The idea is that the council of Guardians, chosen like a jury from the general public, would sit above existing law-making bodies and have two core powers: to veto legislation that threatened the basic needs and interests of future generations; and to force a review, following public petition, of any existing legislation that does the same.
  • At the beginning of April, Policy Exchange announced the five finalists for the Wolfson Economics Prize, which challenges the world’s brightest economists to prepare a contingency plan for a break-up of the Eurozone. Finalists will be given until the end of May to develop their entries and the winner(s) will be announced on 5th July. This might not be targeted at the general public as such (though having said this, an eleven year-old boy from the Netherlands did receive a special mention from the judges for his proposal – and a €100 gift voucher for his efforts), but it’s easy to see how the prizes could be extended to other areas of public policy.

So, we have ways of making existing institutions more open and transparent, and ways to create new opportunities for participation and engagement. We need both. But, to go back to Bevan, we also need new ways to talk in politics and policy – we need more truth. Here’s Bevan’s full quote about ‘calculating machines’ (taken from the excellent Aneurin Bevan website):

“I know that the right kind of leader for the Labour Party is a desiccated calculating machine who must not in any way permit himself to be swayed by indignation. If he sees suffering, privation or injustice he must not allow it to move him, for that would be evidence of the lack of proper education or of absence of self-control. He must speak in calm and objective accents and talk about a dying child in the same way as he would about the pieces inside an internal combustion engine.”

Speaking with greater truth and authenticity is not the same as being more partisan and ideological. The latter are collective ‘truths’, but authenticity is personal – it’s my truth, based on my experience. As members of the public we look to our politicians to be authentic and often blame our disengagement from politics on their reluctance to risk being more genuine (surely a vicious spiral). But we also have a responsibility to be more authentic ourselves, to be more willing to form and express views based not on what is comfortably cynical or generally accepted within our social and professional circles, but rather from what our own experience tells us. I can love the principles behind the NHS, but at the same time I can also say that it treated me terribly in a particular instance, or that its staff were rude and unhelpful when I felt particularly vulnerable, and so on. If we’re not prepared to step-up and be honest ourselves, what gives us the right to expect politicians to be any different?

As Nye Bevan also said:

“I started my political life with no clearly formed personal ambition as to what I wanted to be, or where I wanted to go. I leave that nonsense to the writers of romantic biographies. A young miner in a South Wales colliery, my concern was with the one practical question, where does power lie in this particular state of Great Britain, and how can it be attained by the workers? No doubt this is the same question as the one to which the savants of political theory are fond of addressing themselves, but there is a world of difference in the way it shaped itself for young workers like myself. It was no abstract question for us. The circumstances of our lives made it a burning luminous mark of interrogation. Where was power and which the road to it?”

This is from Bevan’s most famous book, published in 1952, called In Place of Fear.