The Government is paying the political price for the lack of open policymaking in its reforms to the NHS

The NHS is facing significant financial pressure as a result of austerity with smaller increases in spending, which are not keeping pace with demand. This has meant that the NHS has to find £20 billion in efficiency savings by 2015. At the same time the health service is facing one of its biggest upheavals ever, which will result in a greater involvement of private companies in the health services. The reforms to the NHS have been introduced in the face of stiff opposition and in many ways represent the opposite to open policymaking – and the Government is now paying the political price.

The opposition to the Health and Social Care Bill was substantial and included the majority of the main health bodies, many of whom were not invited to attend the infamous Downing Street health summit to discuss the bill earlier in the year. Notable non-attendees included:

  • British Medical Association
  • Royal College of GPs
  • Royal College of Midwives
  • Royal College of Nursing
  • Chartered Society of Physiotherapists
  • Royal College of Pathologists
  • Royal College of Radiologists
  • Royal College of Psychiatrists
  • Unite
  • Unison.

Opposition to the bill was widespread in the workforce of the health service. One survey found overwhelming opposition from hospital doctors, with 9 out of 10 professionals opposed to the bill. Strong opposition to the reforms was also apparent amongst the grassroots of the coalition parties. ConservativeHome came out in opposition to the reforms, arguing that it could cost the Conservatives the next election and would distract from important reforms to welfare and education, whilst Liberal Democrat party members opposed the reforms by 2 to 1.

Much of the opposition about the reforms has centred on how complex and fragmented the new health system will be. Clare Gerada, Chair of the Royal College of GPs, has argued that the move to a market-driven health care system will result in a culture of ‘my disease is more important than your disease’, with GPs at the centre of this trying to balance these competing voices. She has flagged her concerns about the lack of experience of GPs in managing relationships with the charities and lobbyists they will face when commissioning in future.

Andy Burnham, the Shadow Health Secretary, agrees on the point of fragmentation of health care, arguing that “my answer is simple: markets deliver fragmentation; the future demands integration.” He has called for a single system for health and social care which addresses the physical, mental and social needs of the nation. He has argued that central government should decide what health services should be delivered and local government how.

Despite the overwhelming opposition, ministers have been happy to write off the protests as ‘business as usual’ when it comes to NHS reform. Simon Burns, the then Health Minister, stated that the opposition from these ‘vested interests’ was to be expected and scare stories about ‘creeping privatization’ are par for the course. Andrew Lansley, the former Health Secretary and architect of the reforms, argued that the Royal College of Nursing only opposed the reforms because of pension changes, accusing them of being ‘a vested interest indulging in trade union -like behaviour’. The appointment of Jeremy Hunt as the new Health Secretary does not inspire hope about a change of policy course, given that he is seen as a proponent of greater involvement of the private sector in a market-driven health service.

The reforms have now received Royal Assent and the Government seems committed to accelerating the involvement of the private sector in the NHS. Research by the Labour Party using freedom of information requests to NHS primary care trusts found that contracts for almost 400 NHS services worth a quarter of billion pounds were signed in early October, representing the biggest act of privatization ever seen in the NHS. The research found that in a quarter of cases, the primary care trust had not been open about its intention to outsource, resulting in a considerable amount of privatisation by stealth.

The biggest privatisations so far have been in community services – those healthcare services offered outside of hospitals including musculoskeletal services for back pain, adult hearing services in the community, wheelchair services for children and primary care psychological therapies for adults. Children’s health care in Devon is now delivered by Virgin Care, as are GP services in Northampton and sexual health services in Teeside. This week’s Channel 4 Dispatches programme entitled ‘Getting Rich on the NHS’ uncovered poor quality services delivered by Virgin Care and concerns from local residents that their local services have been privatised often with little or no involvement from the community in this decision.

Paul Corrigan, the former Labour health adviser, argued in September that outsourcing of services should go further. He proposed that the private sector should be allowed a greater role in the NHS to ‘save’ failing hospitals. This argument is ironic given that this week it became apparent that the flagship outsourcing of Hinchingbrooke Hospital in Cambridgeshire to the Circle Partnership is not delivering on the initial expectations. The hospital, in private hands, has racked up losses of £4.1 million in the first six months of the contract – £2 million more than was expected. Given that the private sector was involved to save the hospital from financial ruin, the experience so far does not bode well.

This closed approach to policymaking and reform is having a real and significant political impact on the Government. A recent survey by IpsosMORI on which party has the best policies on healthcare found that the Conservative’s ratings are at pre-Cameron levels. Only 16% of voters believe that the Conservatives have the best policies on healthcare and they seem to have lost the battle in convincing the public that the NHS is safe in Tory hands. A further recent poll by IpsosMORI points to a re-toxification of the Conservative brand, with a sharp increase in people who don’t like the Tories since they came into government, which the reforms to the NHS are clearly a part of. The Government is paying the political price for the lack of open policymaking in its reforms to the NHS.


Built to scale: the Family Independence Initiative – Jane Mansour

In this post our guest blogger Jane Mansour showcases the Family Independence Initiative in Boston, Massachusetts. The project is a good example of the principles of ‘guerilla policy’ in action. Jane is an expert and consultant in international welfare to work and the commissioning and funding of public services. She blogs regularly at Buying QP. Thanks to Jane for contributing the post, and we welcome your comments.

The argument for the benefits of user and staff involvement in policy making is considerably strengthened by numerous example of projects that have been successfully designed and delivered using this blueprint. These range from actual projects – of which FII discussed below is a great example – to the use of a crowdsourcing approach to gather solutions for identified and specific local needs. These raise questions about the extent to which this approach is scaleable, and how this can be done without losing what made them work in the first place.

This week I met Jésus Gerena, the Boston Director of the Family Independence Initiative (FII). FII families create support networks in their own communities rather than accessing help through a key-worker or institution. As an organisation it has impressive results – in the first six months of operation participating families in the Boston wing of the programme saw their incomes rise by an average of 13% and their savings by 22%.[1] These statistics and many others covering family finances, schooling (both adults and children) and health and activities are compiled monthly. The data is actively uploaded by the participating families themselves. They are paid for this, and for leading, counselling and facilitating the monthly groups they attend. These payments total in the region of $2000 a year per family.[2]

The FII was the brainchild of Maurice Lim Miller; he was honoured this week by the MacArthur Foundation with a ‘genius award’ which carries with it a grant for $500,000. It works by not helping people in poverty. No, that was not a typo. The FII do not help, staff can be (and have been) fired for doing so. What the FII does do is provide an environment in which people have opportunities to succeed. Families work together to problem solve, record their gains and losses and have access to resources should they need them.

There are the three fundamental values that underpin the organisation’s approach. Firstly, the families are in control. Secondly, there is a formal feedback loop consisting of monthly and quarterly meetings and data collecting providing peer accountability. The process of recording information in and of itself, impacts positively on behaviour. Lastly there is access to resources to move forward. These resources are often in the form of matching or doubling the contributions participants make towards education, housing or business goals, but they can also be used to meet urgent practical needs (eg. a car or dental work).

Listening to Gerena’s passion for the FII approach, it is difficult not to get excited about it, about the way that this organisation is not only challenging much of the way that social policy has been cast, but is succeeding in doing so. The scaleability of successful but reasonably small projects is fraught with difficulty. The world of public policy is littered with examples of innovative projects that are hailed, placed in the spotlight, enlarged and ‘replicated’, but that then fail to deliver on the bigger stage. This is then followed by a blame game that often focuses on delivery, sometimes on commissioning, occasionally on design.

In two years the Boston operation has grown from 35 to 200 families. Gerena thinks there is the potential to continue expanding to 1000 families but, and it is an important but, this expansion needs to happen organically through families introducing themselves and others – a combination of ‘core catalyst families’ and ‘ripple families’. Scaling up fails when the guiding values behind success are confused within the method in which they are delivered, when the ‘how’ is mistaken for the ‘why’.

There are broader public policy lessons to be learned from the work being done by FII. These are not that welfare savings can come from the wholesale removal of frontline staff, or that bids to deliver programmes should need to be scored on how often the words ‘family’ or ‘social capital’ occur, or that a new New Deal for Communities is the answer. The lessons are far more challenging than simply producing a shiny new programme.

Miller has written a brief paper identifying the changes he thinks necessary for substantial change in the outcomes for low-income families. It’s worth reading in full. His final call to action identifies four changes that need to happen:

“1. We need to more accurately communicate the resourcefulness, capacity, and caring that is the true picture of lower income families and communities

2. Funders must allow for program approaches that provide help based on family and community initiative and strengths

3. Policy makers, funders and leaders must seek direct feedback from the consumers of programs they create and respond to that feedback

4. The target families must self organize and advocate for themselves and their communities”

As I sat in the FII office, it was striking that there are clear echoes in the UK – in terms of approach, positive outcomes, frustrations with the system, but also in the difficulty in capturing the wins and replicating them either regionally or nationally. Successful, sustainable ideas are evident in individual programmes but somehow the key to why they work gets lost in translation when ‘reform’ or scaling up occurs. Why is it that successful local programmes so often fail on the big stage? To what degree would this failure be mitigated by taking a different approach to both entrenched social issues and institutional frameworks? What impact would the following considerations have on policy design?

Long vs short-term investment: FII is aimed at the working poor – those who are increasingly ineligible for state safety nets, face significant marginal tax rates on any additional earnings and are in real danger of sliding back into poverty (cycling between work and benefits). It relies on the safety nets being there, it is an extension of benefits rather than a replacement for them – any savings to the welfare budget will only be felt in the long-term as people move up the income ladder. When the focus is on cutting spending rather than raising revenue, and results are needed quickly the long-term nature of many interventions is overlooked.

Look for ‘A Duh’ rather than ‘A Ha’ moments (Gerena’s phrase). There is a tendency to look for exciting, new, revolutionary change but often small, practical, simple and obvious opportunities are overlooked. Users and staff are the key to understanding what these are.

It requires a significant power shift to trust in people to make decisions about their own lives, find their own support network and provide the resource to enable them to make positive changes. What could this look like and how can it be supported by the state?

The need to end funding silos for people with multiple needs has been much discussed. The introduction of the Universal Credit in the UK aims to streamline benefits. The focus is on simplifying the benefits people receive rather than on the way they live and how services they interact with are funded and delivered. Bringing funds for the latter into one pot (universal support?) would have a very different impact.

What and how do incentives work for middle and high earners? Can the rewards for initiative they receive be extended to benefit claimants and those on low incomes? Skills policy and funding is an area that immediately springs to mind.

Feedback and data are both vitally important and often overlooked. This involves a change in perspective, from the compilation of simplistic league tables of outcomes towards rich seam data mining of the information gathered on the journeys of individuals as they bounce around the system.

There has been a tendency in policy design in the UK and elsewhere to believe that successful programmes will only come from providing more intensive external support. The experience of FII is that the ongoing cycling between work and benefits can be prevented through the creation of long-lasting social structures and support networks, underpinned by feedback and resources. The challenge is in reproducing co-operative policy making and delivery on a regional or national stage.


[1] These outcomes have improved over time and the experience of the two Californian programmes is of an income increase of 20%.

[2] These sums are not included in the increased income calculations


Open policymaking: Should there be a ‘duty to involve’ for national policy?

As Edward Andersson from Involve noted in his recent blog reviewing the new consultation principles issued by government: “Today consultation has, for many citizens, become a byword for formalistic, tick box exercises, done to mask a decision which is already a ‘done deal’.” Edward rightly suggested that the new principles, while important, fall short of providing the solution to this widely shared view of consultation. Could one solution be a national ‘duty to involve’, similar to the requirement that some local public services are already subject to? In which case, national policymakers should look to their local counterparts for what works.

This post is part of the project on open policymaking and better consultation, hosted by the Democratic Society in association with the Cabinet Office. As Anthony Zacharzewski, head of DemSoc, has summarised it: “Open policymaking is the natural corollary of open data and transparency, requiring openness and allowing public participation at every stage of decision-making and implementation. It supports citizen action and positive involvement of the public in shaping laws and services.” This active engagement is obviously very different in scope and ambition to traditional consultation, but this doesn’t mean we’re starting from scratch. If, as the Government has said, in the future “all policies will be made openly”, we could learn from where there have already been attempts to achieve a different, more deliberative approach to decision-making – in local government and local public services.

Many of these local duties to involve citizens have been introduced through national policy. For example, Section 138 of the Local Government and Public Involvement in Health Act 2007 imposed a duty on all councils and ‘best value’ authorities to involve ‘local representatives’ when carrying out functions by providing information, consulting or ‘involving in another way’. Councils must engage with a balanced selection of the individuals, groups, businesses or organisations the council considers likely to be affected by, or have an interest in, the council’s functions (including children and young people as appropriate). For the National Health Service, legislation which came into force in 2003 placed a duty on certain organisations to involve and consult, but managers were not always clear when they had to involve people or how it was best to do this. The 2007 act aimed to make this clearer; the duty requires NHS organisations to involve users of services in the planning and provision of services, the development and consideration of proposals for changes in the way services are provided, and decisions affecting the operation of services. Section 242 of the earlier consolidated NHS Act 2006 was also supported by useful guidance on achieving ‘Real Involvement‘ from service users and communities.

The NHS’s operating framework further emphasised that this engagement should be ongoing, not just during periods of change. Primary Care Trusts and NHS providers should “…create greater opportunities for their communities to make their voices heard, raising awareness of those opportunities and empowering patients and the public to use them and LINks [Local Involvement Networks]; [and] take greater responsibility for communicating with their local populations and stakeholders to ensure better understanding of, and confidence in, local NHS services.” More recently, the NHS constitution underlines that public and user involvement should be part of the fabric of the NHS: “You have the right to be involved, directly or through representatives, in the planning of healthcare services, the development and consideration of proposals for changes in the way those services are provided, and in decisions to be made affecting the operation of those services.”

The reality of local engagement might only rarely meet these ambitions, and many local policymakers, managers and clinicians might question the extent to which the public can play a constructive part in decisions on reconfiguring clinical services. Views on the success of local LINks vary widely, and they are due to be replaced by Local Healthwatch organisations in April 2013 as part of the ‘new NHS’. But this gap between aspiration and reality may be more a matter of developing and using the right methods for engagement – and being seen by local communities to be making genuine efforts at this engagement – rather than a fundamental problem with the aspiration itself (these are after all public services, paid for by the public, and they should surely be accountable as such).

Organisations such as Involve (a partner in this discussion) have a wealth of experience about what works locally (Edward referenced some very useful resources in his blog) – surely some of these principles and practices could not only be better shared locally, but applied to national policy as well? As we’ve noted before, one of the reasons that the Government’s NHS reforms ran into such difficulty was the view held by stakeholders that the policy was developed in a fundamentally closed way rather than constructively and collaboratively. The Government says that empowering individual patients and increasing the local accountability of health services is at the core of its reforms; shouldn’t we apply the same principles of empowerment and accountability to the development of health policy as well as the operation of health services – and to any policy for that matter?

The Government’s Civil Service Reform Plan, where its committment to open policy was announced, makes no reference to existing local methods of engagement and how these could inform open policymaking at a national level. Nonetheless, national policymakers should look to the methods that have been used by local policymakers and planners to engage their communities and service users in decision-making – both the successes and the failures – and consider how the most effective approaches could be adopted and adapted for national policy. Open policy is an ambitious agenda. Making it real will require effective methods for engagement, but also ways of requiring that policymakers develop policy openly. As well as learning from local methods of engagement, do we need an equivalent national ‘duty to involve’ stakeholders in policy development?


The West Coast fiasco points to the real problem with open public services

The West Coast mainline franchising fiasco shows that the current approach to outsourcing public services has serious flaws that need to be addressed – the much too complicated and secretive nature of outsourcing is the problem, rather than the people handling the process.

Last week Patrick McLoughlin, the new Transport Secretary, cancelled the West Coast Mainline franchise deal. The Department for Transport has been on a damage limitation exercise ever since, with McLoughlin blaming the fiasco on officials at the DfT “because of deeply regrettable and completely unacceptable mistakes made by my department in the way it managed the process”. Philip Rutnam, the Permanent Secretary at DfT, has also joined in telling staff that they must accept that the reversal was the fault of officials. Meanwhile, Kate Mingay, one of the three officials suspended by DfT (an ex-Goldman Sachs employee parachuted into the civil service because of her private sector expertise) has hit out at the way her role in the procurement has been portrayed by the Department.

Blaming officials is an easy way to distract from the substantive story: whether the current approach to franchising used by the DfT is fundamentally flawed. The Department argues that mistakes were made from the way the level of risk in the bids was evaluated due to human error – in particular the way in which inflation and passenger numbers were taken into account, and how much money bidders were then asked to guarantee as a result. But the assumptions about inflation and passenger numbers are dependent on the state of the UK and global economy and the ability of the future franchisee to bring in new customers. Colin Cram, writing for the Public Leaders Network, argues that: “…this enters the realms of guesswork and slight changes in assumptions can lead to different outcomes for contracts that may be for only three or four years, let alone 13.” If the Government’s own Office for Budget Responsibility continues to get its predictions on economic growth significantly wrong, how can we expect the assumptions made in the rail franchising process to be watertight?

This is not the first time that assumptions about economic growth and customer numbers has gone wrong, for example the previous experiences with the East Coast mainline or in the commissioning of welfare to work services. The Work Programme was designed for a far more positive economic climate than we now find ourselves in. DWP’s estimates of the number of customers in receipt of Employment Support Allowance have proven to be wholly unrealistic, with serious consequences for the business models of prime contractors and charities.

The risks associated with complex procurement processes such as the rail franchise are compounded by the secretive nature by which they are often conducted, behind a veil of ‘commercial in confidence’. As we’ve argued before, this ‘closed shop’ approach leads to poor decisions and a profound lack of public engagement – until something goes horribly wrong. The complexity involved also means a significant diversion of resources into the process of franchising rather than actual delivery of services. Franchising might work however if the process was more transparent and the assumptions about passenger numbers (and any other projections) were open to rigorous scrutiny by others outside of the process – so why isn’t it?

The West Coast fiasco has much wider implications that the policy establishment probably doesn’t want the public to consider. Cheryl Gillan, the former Conservative Welsh Secretary, has argued that a root and branch re-examination of the High Speed 2 rail project is needed if the public is to have trust in such a significant investment of public resources. Instead, plans for competition and outsourcing are being accelerated in prisons, probation services and health. In this context, the secretive, complex and bureaucratic nature of outsourcing needs to be addressed as a matter of urgency. If the public is going to be on board, then a public debate is needed on the merits and risks of delivering services in this way – which surely is what the Government’s open policy should be all about.

Fundamentally, the political establishment doesn’t engage the public in a debate about the merits of rail franchising because the public doesn’t support the idea. This ‘outsourcing by stealth’ approach wins neither hearts nor minds. Various surveys continue to show a strong majority of public opinion in favour of re-nationalising the railways – one recent survey found that 70% of respondents supported such a move. Impossible? New Zealand provides an example of such a policy put into action. Its rail and ferry network was privatised in the 1990s and asset-stripped and run down by an Australian outfit. It re-nationalised both in 2009. Michael Cullen, the then Finance Minister said privatization had “been a painful lesson for New Zealand”. Kiwi Rail in public hands has been able to invest in its long-term future whilst also generating significant financial and economic benefits for taxpayers in New Zealand.

Here, despite the strong public preference for a nationalised rail network, none of the three main political parties are committed to such a policy. At last week’s Labour Party conference, Ed Miliband and Maria Eagle made positive noises in this direction but no firm commitments. So we are left with an unpopular, risk-laden, fragmented rail network – and the policy establishment searching around for scapegoats when they should be looking somewhat closer to home.


Political parties need to go ‘guerilla’ if they are to survive

The main political parties are in decline. Their membership is shrinking and the share of the vote garnered by Labour and the Conservatives is at its lowest level ever. If political parties don’t reinvent themselves they will be comprised mainly of members who are increasingly removed from the day-to-day views and experiences of most ordinary people. Political parties need to embrace the principles of ‘guerilla policy’ movements such as 38 Degrees to reinvent themselves as popular vehicles for policy or they will perish.

We’re in the middle of party conference season, and while the political establishment gathers excitedly in Brighton, Manchester and Birmingham, the public are unlikely to following the speeches and ‘debates’ with the same fervor. This lack of interest in the party conferences is not connected to voter apathy; in fact a recent Ipsos MORI poll found that 58% of respondents said that they were interested in politics. Fraser Nelson summed it up well last week in The Spectator where he argued that political parties are dying because the general public is underwhelmed by what they have to offer. The conference season is now the domain of party hacks, lobbyists and general hangers on rather than ordinary party members or citizens.

This week The Economist noted that between them the three main UK parties have fewer members than the Royal Society for the Protection of Birds. The declining interest in the main political parties is also illustrated by their web presence. The Labour Party’s site is the most popular out of the three main parties, ranking 5,057th in the UK according to Alexa.com (which tracks traffic over a three month period), followed by the Conservative Party (15,040th) and Liberal Democrats (19,346th). Party activists, especially on the right have broken out and embraced social media including by establishing blog sites – ConservativeHome, ranked 3,084th, is far more popular than the Party’s own site, and also outperforms both Labour List (13,869th) and Lib Dem Voice (42,124th).

However it is the ‘upstarts’ like 38 Degrees, the Taxpayers Alliance and Mumsnet that are shaking up the world of political campaigning and mobilising. Over a million people have joined 38 Degrees, the Taxpayers Alliance has more members than the Liberal Democrats, whilst Mumsnet is ranked as the 441st most popular website in the UK. These numbers point to a worrying trend for the main political parties – these guerilla operations, which operate well outside of the Westminster village, are passing them by. All of them have led successful campaigns that have directly shaped policy, from the prevention of the sale of the forests, to opening up public spending by councils.

The main political parties are only beginning to attempt to play catch up. At this week’s Labour conference Angela Eagle, the Chair of the National Policy Forum announced the creation of an online policy hub called Your Britain to shake up the way Labour develops policy and their next manifesto. She described it as: “…an electronic ‘town square’ for the Labour movement and the communities beyond. People can get involved by commenting on current policy proposals, propose new ideas and join in with an online discussion.” Eagle also talked up the role ‘crowdsourcing’ could play in finding new ideas. Your Britain is not yet live and it is hard to find out any more information about it other than what was contained in her speech. It is therefore far too early to judge whether this represents a shift in how Labour develops policy or just forms the basis of a good press release.

The Miliband brothers have enthusiastically embraced the idea of community organising as a way to connect local communities to politics and policy (borrowing heavily from Barack Obama’s grassroots campaigning machine). David, as part of his campaign for Labour leader, committed to recruiting and training 1,000 community organisers through his Movement for Change vehicle. Whilst Ed has drafted in Arnie Graf from the US to develop Labour’s community organising capacity. Stella Creasy has demonstrated the potential for community organising to galvanise a community around a particular policy through her high profile campaign against loan sharks in Walthamstow.

On the right, open primaries to select Westminster candidates (another innovation borrowed from the US) have been used to re-connect communities and politics. Sarah Wollaston, MP for Totnes, is the most famous of these candidates, although she has caused trouble for the party business managers because her independent approach has meant that she is not always prepared to follow the party line. In Plymouth the local Conservative Party Association ignored the results of an open primary because they did not like the candidate that local people chose (former Council Leader Cllr Patrick Nicholson). Despite the initial enthusiasm, the party machine has resisted wider adoption citing concerns about cost and watering down of the influence of party members.

Despite these innovations, politicians are still failing to convince voters that political parties in their current form are vehicles for effecting policy change. This is because the political innovations described above are ‘add ons’ rather than a fundamental rethink of how political parties are organised. The Pirate Party, which we have talked about before, shows a very different way of organising a political party by embracing fully the principles of openness, transparency, honesty and accountability. The party’s website is also ranked 254th in the UK. What is needed is a re-invention of the party political model, not tinkering at the edges. Our own effort, Guerilla Policy, is just at the beginning of considering a fundamentally different way of organising a think tank, for instance the potential of social media to develop policy in an open, honest and transparent way (we’ll be announcing another new project soon).

Compared to some other countries, the main political parties in the UK have been relatively stable for the past sixty years, but the decline in party loyalty, their share of the vote and membership means that they cannot assume this will continue in the future. The Labour victory in 2005 was on the lowest share of the vote ever by a governing party at 35.2%. Other western democracies such as Germany, the Netherlands, New Zealand and Canada have all seen significant upheavals in their political parties. The Amazing Mrs Pritchard was a BBC drama shown in 2006 which presented how this could happen in the UK. Given the rise of social media and the decline in party loyalty among the public, such a scenario seems much less unlikely now.


Open policy requires open research – the CBI’s report on outsourcing public services doesn’t meet this standard

Last week the CBI published research that claimed that government could save billions by outsourcing more public services to private business. Ironically for a report titled ‘Open Access’, the main problem with the report is not its argument but its lack of transparency. For such an important issue as the future of public services and who delivers them, we aren’t given enough opportunities to judge for ourselves whether the report’s claims stand up to scrutiny. Open policy requires a much greater openness about the data and analysis used to support such conclusions – otherwise it’s just a press release.

The CBI’s Open Access report claims that “opening up public service delivery to independent providers” (that is, outsourcing public services) could achieve savings of £22.6 billion “or more”. For such a big claim, the research has a fairly simple methodology. The researchers (Oxford Economics) looked at 20 different service areas to determine the average cost savings from greater efficiency and productivity from outsourcing (a figure of at least 11 per cent, within a range of 10-20 per cent); applying the same calculations across the estimated £278 billion of public services which the CBI believes could be fully ‘opened up’ produces potential savings from outsourcing of £22.6 billion.

Trade unions have criticised the report for a ‘lack of evidence’ (for example, Unison) and for not taking into account any of the transactional costs associated with outsourcing including procurement, tendering and contract management, let alone when private providers fail to deliver. The Local Government Association called the report’s calculations “ludicrous” for effectively double-counting savings from services which have already been outsourced. Other commentators have identified specific flaws in the research (for example, for fundamentally misunderstanding who already provides what in the housing sector).

Beyond this, it’s also important to note that efficiency is not the same as effectiveness, which is to say, cheaper does not always represent real value for money. This is especially the case when it comes to public services where there are often broader considerations to be made regarding ‘public value‘ – encompassing not only benefit to the individual service users but also to communities and society as a whole.

For example, it’s unfortunate that the CBI’s report promotes the Work Programme as a model of good practice, both because of the identified risk of fraud in the programme, but also because of the significant concerns about the programme’s impact on charities. As the NCVO has argued: “The Work Programme continues to pose major issues for charities particularly around managing cash flow and taking on risk and very large contracts prevent smaller and more specialist organisations from playing their full part. More seriously it’s clear that the payment structures used continue to threaten the viability of contracts.” However ‘efficiently’ it achieves its objectives, if a programme undermines the diversity of provision including from smaller charities, can it really be regarded as generating better ‘value’ for society?

Further, while the report recognises the widely shared public concerns about outsourcing public services, it also effectively makes these problems that government needs to solve – as if government is to blame for them: “The Government must take important steps to ensure the public retains confidence in the opening up of public services by becoming a more effective market manager and ensuring that the best, most effective providers from all sectors have the opportunity to manage our public services. Providers too must work with the government to address the public’s concerns about value for money, accountability and service failure.” Certainly government has the ultimate responsibility to ensure that public money is spent responsibly, for example that providers are properly audited. But if they are to be given millions or billions of pounds of public money, private providers also need to do more to prove their worth and reliability, such that they can be trusted to provide public services (something not helped by last week’s further revelations about the G4S Olympics debacle). Of course, one way to avoid such problems would be not to outsource more public services – but this is a view that the CBI regards as “dogmatic”.

However, the main problem with the CBI’s report is that we can’t properly determine the accuracy or veracity of the research for ourselves. It seems particularly questionable to assume that the same level of savings can be achieved uniformly across different areas of public services, and yet to quote from the research: “If an average 11% of productivity improvements is achievable across just £24.5bn out of the £666bn annual public sector expenditure on services in the UK, then similar levels of savings must be possible: not just in the un-open proportion of the markets researched but in the unopened proportion of the estimated £278bn of public services spending which could practicably be more opened up to independent provision.” [emphasis added]

Unfortunately, it’s not possible for us to investigate this much further. The problem is the methodology – or rather its lack of openness. As acknowledged in the report: “There is as yet little published information on the scope and performance of services delivered by independent providers.” The average saving figure used in the report is based on “existing research, and information from public bodies and providers” – including crucially from a survey of CBI members. The CBI has produced a nicely presented summary of the analysis by Oxford Economics; the actual analysis (which is a bit more difficult to find) is pretty opaque, especially when it comes to this survey of CBI members. One phrase that keeps popping up in the original Oxford Economics analysis is: “The degree of potential cost savings that could be achieved through outsourcing these services is estimated from responses to the CBI member survey.” In other words, the most critical figure in the research, the basis of the argument made in the report, comes from what the CBI’s own members claim – a claim we are unable to judge for ourselves because we are provided with no further information about it (for example, how many of the CBI’s members responded, what size were these providers, what specific types of services they provide, etc). For an argument in favour of open public services, this represents a remarkably closed approach to evidence.

As the CBI’s report notes, we are in the middle of the biggest wave of government outsourcing since the 1980s, with more than £4 billion in tenders being negotiated in 2012 alone in services ranging from prisons and police to defence and health. Given this, we need much more robust and reliable research about the benefits and the problems that outsourcing more public services would produce – before we outsource these services (perhaps irreversibly). The research commissioned by the CBI may or may not be a useful contribution to this analysis; the problem is that because of the report’s own lack of transparency, it’s very difficult for us to know.


We don’t need secret recordings – the policy establishment’s disdain for public service workers is hidden in plain sight

“Best you learn your f***ing place. You don’t run this f***ing government. You’re f***ing plebs. I’ll have your f***ing job for this.” So ranted the Government’s Chief Whip Andrew Mitchell to members of SO6, the Diplomatic Protection Group guarding Downing Street, according to the Sun newspaper. Unlike Mitt Romney’s recent remarks we don’t have the secretly-recorded video footage, but whether Mitchell said these exact words doesn’t matter. The policy establishment’s disdain for public service workers is there for all to see – just look at their policies and how they develop them.

Andrew Mitchell claims he actually said: “You guys are supposed to f***ing help us.” Whatever his actual words, Mitchell’s tirade was especially tasteless given that the group of officers he swore at included a female officer, just over 24 hours after the murders of PCs Fiona Bone and Nicola Hughes in Manchester. It’s also pretty special to verbally abuse the people who spend their working lives protecting you. Paul McKeever, chairman of the Police Federation, said it was “hard to fathom how someone who holds the police in such contempt could be allowed to hold a public office.” Unfortunately, it’s not that hard to fathom at all – indeed such attitudes appear to be the driving force behind much public service reform over the past 30 years or so.

Much commentary has focused on the class dimensions of ‘Gate-gate’ (and whether or not Mitchell uttered the apparently politically lethal word ‘plebs’). As the Sun Says: “It is something a smug, fabulously-rich snob might say to belittle his badly-behaved butler. And as such it reinforces the view that millions of ordinary hard- working voters already have …That Britain is run by an upper-class clique — happily slapping VAT on pasties and freezing pensioners’ allowances while handing tax cuts to the super-rich.” Benedict Brogan in the Telegraph wasn’t alone in noting the potential toxicity of the incident to the Tories, but also that such behaviours aren’t unique to one party: “Labour is declaring itself appalled, though frankly that’s a bit rich from the party whose previous leader failed to shake the copper’s hand outside No10 and called an old lady a ‘bigot’.” Such incidents are cock-ups; they also indicate an underlying elitism and detachment prevalent in the political establishment.

Unlike Mitt Romney’s “47 per cent” remarks, we don’t have video footage (yet) of what Mitchell said. But like Romney, what the police offers claim Mitchell said to them represents an essentially dismissive attitude to working people – a worldview described by Paul Krugman in the New York Times this week with reference to the Romney video: “…the modern Republican Party just doesn’t have much respect for people who work for other people, no matter how faithfully and well they do their jobs. All the party’s affection is reserved for “job creators,” aka employers and investors. Leading figures in the party find it hard even to pretend to have any regard for ordinary working families.”

Much the same attitude seems to be prevalent in the policy establishment here regarding public service workers – that they are somehow ‘failures’ for not having had the entrepreneurial zeal to have established their own internet marketing companies (or something equally socially productive), having decided instead to fritter away their time serving others – educating children, treating patients, cleaning streets and so on.

In the case of Mitchell’s outburst, we don’t need to see the video footage from Downing Street’s security cameras, since the policy establishment’s view of public service workers is hidden in plain sight. If the policy establishment had a greater genuine regard for the people who provide public services, they might deign to engage them in working out how public services can be improved, and especially in how policy is developed such that it supports this improvement. Instead, public service workers are more typically regarded as the ‘problem’ to be resolved (and as interests to be battled) – part of the obstructive ‘state monopolies’ that need to be broken up, rather than sources of expertise and insight that should be recognised and respected. This explains why all the main political parties would like to ‘liberate’ public sector workers so that they run their own providing organisations as part of a competitive market in public services – at least then they might join the vaunted ranks of the ‘wealth creators’, albeit at a lowly rank.

The issue then is not so much social class as the types of social occupation now common in the political establishment. It’s probably not a coincidence that both Mitt Romney and Andrew Mitchell have backgrounds in management consultancy – Romney in Boston Consulting before moving to Bain, and Mitchell as a Senior Strategy Advisor for Accenture. In this respect, both are typical of a political establishment that comprises people who have never worked in public services but nonetheless feel they know how services can be ‘made’ to work better by (re-)ordering those who do.

Perhaps then the most helpful reaction to Mitchell’s outburst has been from an unnamed Cabinet minister, who suggested to the Telegraph that he should consider volunteering to work alongside police for a few days as a penance. “It’s what you do in this sort of thing, isn’t it?” the minister said. “A few days in a high-visibility jacket with the cops could be just the thing for Andrew.”