Reform roundtable seminar on "Managing change in the public sector", with Stephen Kelly, Chief Operating Officer for Government, on Tuesday 27th November.
Reform roundtable seminar introduced by Sir John Armitt, Chair, Olympic Delivery Authority, on Tuesday 31 January.
By Andrew Haldenby, Director
The economic legacy of the London Olympics and Paralympics is meant to be one of the distinguishing features of this year’s Games. The attendees at this Reform seminar agreed that the various Olympic authorities had been committed to the idea of a strong economic legacy from the moment of the very first intention to bid. The seminar was conducted under the Chatham House Rule and led by Sir John Armitt, the Chairman of the Olympic Delivery Authority.
Certainly the increase in the capacity of the London economy on account of the Games is already very great. The project has cleared a remarkable area of contaminated land (actually the site of the Industrial Revolution in London) and freed it for new development. The majority of development spending, 75 pence from every pound spent, has been devoted to infrastructure (such as better transport links) as opposed to stadia. These changes have enabled the investment by Westfield into Stratford, to take just one example. The Westfield investment was initially priced at just less than £1 billion and now may be worth twice that much.
The Games will also cause a temporary boost to generate higher consumer spending, in particular from tourism. Similar effects have been measured from other major sporting events, such as the 2010 football World Cup in South Africa and the 2011 Rugby World Cup in New Zealand. The Games are very likely to create major new opportunities for top-level UK design and construction, not least to participate in the creation of future Olympic and Paralympic Games.
The more open question is the impact of the Games on the productivity of the local economy. Much effort is going in to improving the educational outcomes of local people, for example through a new Westfield retail academy and, potentially, a new postgraduate campus for University College London. But changes of this kind can only succeed in the context of the development of the rest of the London economy, which is inevitably out of the control of the Olympic authorities.
The final outcome of the discussion was new (at least to me) – that the Olympics and Paralympics are a model example of joined-up government working in partnership with the private sector. The Labour Government learnt the lesson of the Millennium celebrations. It created the right institutional framework for the delivery of the Games and absolutely did not interfere after that. It eliminated political risk by keeping the then Opposition fully in the loop. This good practice in government should certainly be part of the Games’ legacy to policy makers if not to the economy.
Reform-HP roundtable seminar introduced by Rt Hon Chris Grayling MP, Minister of State for Employment, on 24 January 2012.
Payment by results is in danger of becoming the Government’s big idea on public service reform. It had a big place in the Open Public Services White Paper and it is being implemented in the areas of welfare to work and offender management and rehabilitation. A working group has just been set up within government to compare experiences between departments and identify new opportunities.
This Reform seminar was the second in a series of events, sponsored by HP, to debate the latest thinking in the public service reform agenda. The first thing to say is that it is very clear that good, innovative providers are seizing payment by results with both hands. They like the idea that they have freedom to run their services as they wish in order to meet the target. One attendee explained that the focus on results (in this case for rehabilitation for prisoners) had led him to create a new working relationship between police, prisons and probation which clearly promised a better service all round.
One emerging problem is that the emerging variety of payment by results programmes are starting to trip over each other. There are already different programmes for unemployed people variously funded by national government, European funds and local government. In the Government’s view, these schemes are separate and mutually reinforcing (in that each seeks to achieve a particular outcome that helps towards the overall objective of getting someone back to work). In some providers’ views, the schemes overlap and result in multiple payments for doing similar things for the same people. It is easy to imagine the complexity getting worse as new programmes come on stream for troubled families and drug rehabilitation. The trade-off is between greater Government control of activity (and lower spending) and greater freedom for providers to decide exactly what will make the difference in a particular situation. Some attendees suggested that the solution might be local commissioning of payment by results programmes rather than a national procurement.
A remaining question is if we are to pay for “results”, who decides what the right “result” is? In the case of schools (say), I am very happy for schools to get paid by results, but I don’t want Michael Gove deciding for me what should be in my child’s curriculum. This suggests that there is a natural limit to payment by results as soon as consumer choice comes into the equation, which certainly includes education and the great majority of healthcare. Ministers cannot just rely on payment by results to reform public services; they will need to develop the other parts of the open public services agenda, specifically choice and competition in schools and the NHS, which so far has been more difficult.
Andrew Haldenby, Director
Reform-HP roundtable seminar introduced by Sally Collier, Executive Director, Policy and Capability, Efficiency and Reform Group, 19 January 2012
Yesterday a Reform seminar debated “tight and loose” i.e. what is pretty much the Cabinet Office’s most important policy idea: that sometimes efficiency means a tight central grip while at other times it means devolving and decentralising. Speaking for Reform soon after the election, Francis Maude argued that the previous Government had achieved the opposite of what is needed:
“It seems to me that the last Government had this almost diametrically the wrong way round. They didn’t control a lot of those things which fall into my “tight” category [such as civil service headcount, ICT and procurement]. They didn’t control them well at all, and yet there were constant attempts to micro-manage delivery from the centre with a plethora of targets and public service agreements and monitoring and auditing and man marking and regulation and guidance so that everyone here at the front line, you felt that you were, instead of being accountable to the the citizenry you were there to serve, you felt actually accountable to an enormously complicated set of relationships to the centre. This is wrong and doomed to fail.”
The discussion, under the Chatham House Rule and sponsored by HP, turned on where this Government draws the line. There certainly can be benefits to tightness. Both the National Audit Office (NAO) and the Audit Commission have found evidence of the benefits of a tight central grip. This is particularly the case where government buys something simple and easily specified – such as basic commodities – and where it buys at great scale. A fierce drive on costs can also help reform and new ways of working. For example, the Government Property Unit is currently reducing the size of the Whitehall estate. This could improve the productivity of civil servants by moving them into the same buildings (and so improving communication) or encouraging them to be more mobile. In general it was felt that Whitehall had been insufficiently “corporate” in recent years, and that a bit of tightness was long overdue.
But most of the discussion set out of the dangers of tightness elsewhere in the public sector. All rigid procurement rules necessarily exclude some suppliers from competition (and often the more innovative ones). Both the NAO and the Audit Commission have shown that, in other cases, efficiency comes when a part of the public sector has the local nous, flexibility and freedom to solve a problem itself. And in general the centre of government overestimates the benefits of central intervention. For example, central targets are less effective than they seem because they are always gamed (the targets may all be hit yet standards may fall). And central government does not have the data – particularly on costs – to be sure that its intervention is worthwhile.
The concern would be that the tendency of the Government (really, of any government) is to drift to the tight. Even this year we have seen the Prime Minister set a new personal rule for the numbers of visits that NHS nurses make to hospital beds per day. His justification was that the issue was so important that he had to intervene. But clearly that opens the door to much greater intervention as time goes on, and not just in healthcare. The Cabinet Office has been much more convincing on “tight” that is has on “loose”, as the difficulty in producing the Open Public Services White Paper showed. The Government, I think, has to set out more thinking on the “loose” side of the bargain if it is to hold the line.
Andrew Haldenby, Director