It is very frustrating when good new policy gets garbled by our rubbish media. Two very important speeches last week on the future of public services deserve much wider readership and decent commentary. They were Ed Miliband’s Hugo Young lecture and Jon Trickett’s speech to the Fabians.
Miliband’s typically thoughtful speech set out the principles for public services under Labour. He was particularly critical of the fragmentation and lack of integration of the public services under Tory reforms and the lack of openness and scrutiny arising from the contracting culture and commercial confidentiality. Claiming that ‘tackling inequality is the new centre ground of politics’, he said that the times demand a new culture for the public services.
Not old-style, top-down central control, with users as passive recipients of services. Nor a market-based individualism which says we can simply transplant the principles of the private sector lock, stock and barrel into the public sector. The time in which we live and the challenges we face demand that we should always be seeking instead to put more power in the hands of patients, parents and all the users of services.
I meet as many people frustrated by the unresponsive state as the untamed market: the housing case not dealt with, the special educational needs situation unresolved, the problems on the estate unaddressed. And the causes of the frustrations are often the same in the private and public sector: unaccountable power with the individual left powerless to act against it. So just as it is One Nation Labour’s cause to tackle unaccountable power in the private sector, so too in the public sector.
It is worth reading the original speech because some of the coverage was bizarre to say the least. Tom Watson rightly complained about the coverage – ‘I’ll govern like Margaret Thatcher’, ‘I will lead like the Iron Lady’, and so on – calling it ‘a thoughtful speech ridiculously spun’. It even infected Hugo Young’s own Guardian where Asheem Singh of the charity chief executives’ organization ACEVO wrote that ‘Miliband’s public services plan is just Big Society all over again’ and that he was ‘copying Cameron’. This suggests to me that he either hadn’t actually read it or was playing the old game of being seen to criticise both Parties equally. Either way, he didn’t own up to the voluntary sector being major recipients of outsourced contracts but he did show why the sector’s influence over Labour has waned.
Trickett took the argument first into defining the public interest and then into the specifics of procurement. He identified the value of ‘insourcing’ as including greater accountability, identifiable opportunities for performance management, improved public engagement, better strategic governance and an improved public service ethos. He argued the advantages of integration, the need to take a holistic approach to social issues, and the need to expand user influence over decisions. He commented on detailed but important accountability points like private bodies (including, by the way, housing associations) not being subject to Freedom of Information or judicial review.
In many of the examples where things have gone badly wrong under the Tories, he said, the central imperative was shown to be profit rather than service delivery. The problems with outsourcing were proving to be: big transaction costs (preparing, letting, monitoring, evaluating) which were not normally counted; the high incidence and cost of failure (litigation, emergency retendering); the scandal of frequent post tender variations and major cost overruns; and the fact that, in reality, the risk stays with taxpayer and is unpriced.
Why Singh is plain wrong is that Miliband and Trickett both signalled a decisive move away from mandatory outsourcing and tacit privatisation to a new test about what is in the public interest. That has nothing whatever to do with Cameron’s Big Society.
Trickett said it was instructive to watch what the private sector was doing itself. As the public services were being forced into outsourcing and fragmentation, the private sector is bringing services in-house and looking for benefits of integration. They have realised that outsourcing often increased costs, reduced flexibility and rarely involved the transfer of risk to the contractor. Many councils when given the choice – including Tory ones – have ‘insourced’ services that were previously outsourced, and the number of contract terminations is extraodinarliy high.
Prior to 1997, Labour looked to replace compulsory competitive tendering with a ‘Best Value’ regime, which was in effect a new performance management method for the whole of the public sector. In power, New Labour was dazzled by the private sector and had little real belief in the public service ethos. It allowed the same civil servants who ran CCT to then run BV and, guess what, it came to resemble the old system in practice.
Miliband is cut from a different cloth. By shedding ideological assumptions and by challenging unaccountable power and poor service across the board, the public services will at least get a genuine chance to show what they are good at.