www.ippr.org

Public Service Reform – from theory to policy?

Richard Brooks

www.ippr.org

Outline

1 Context2 The government’s model of PSR3 Is this a useful model?4 Theory and evidence5 How will the model be developed?6 What are the key challenges and next

steps in public service reform?

www.ippr.org

Context

• External drivers of reform – Social, demographic and technological change;

rising public expectations; resource pressures; limitations of current services and of top-down reform approaches.

• Ongoing ippr PSR project to end 2006• Immediate context provided by June 6th

National School of Governance Conference & PMSU paper ‘The UK government’s approach to PSR’

www.ippr.org

The government’s model of PSR

Source: PMSU 2006

www.ippr.org

The government’s model of PSR

Source: PMSU 2006

www.ippr.org

Is this a useful model?

• Yes:– Explicit account of what is already happening– Sets out objectives, with a progressive flavour– Sets out theory and evidence for scrutiny– Acknowledges some of the risks– Sets reform approaches alongside each other

rather than presenting them in isolation

• As it stands, helps identify areas of the public services that look like priorities for reform– local public services; police/community safety;

armed forces?

• What do we want from a general model of PSR?

www.ippr.org

Theory and evidence

• Theory sound but at a high level of generality• Broad approach is ‘risks can all be managed

with appropriate policy design’• Should we simply accept that choice does

not always support equity and move on?• Theory of user voice relatively

underdeveloped, and evidence base is thin• Evidence sometimes difficult to interpret due

to specific circumstances and policy designs• But reform cannot wait for perfect

evidence…

www.ippr.org

How will the model be developed?

• Questions for central government:– What happens next to this model?– What should other parts of gov.t be doing with it?– How will it inform the CSR, future green & white

papers, departmental strategies and plans?

• Questions for everyone (including ippr project):– How can such cross cutting work be most useful?– What are the key issues for further development?– Can we develop a useable PSR toolkit?– What are the specific policy implications?

www.ippr.org

What are the key challenges and next steps in public service

reform?

1 What are the likely costs of reform?2 How do the different mechanisms

interact?3 How should reforms be sequenced?4 How is the role of central government

likely to change?5 How can reforms embed progressive

values?6 Can reform be developed into a

compelling public narrative ?

www.ippr.org

What are the likely costs of reform?

• Reforms have costs which need to be weighed against potential benefits:– Some costs are explicit: e.g. premia paid to

encourage new providers to enter a market.– Others result from new market structures, e.g.

transaction costs or loss of economies of scale.– Supporting choice and voice may be expensive.– Reorganisation requires corporate resources.

• These costs may be outweighed by improved efficiency or quality

• Costs and benefits are likely to vary between services. What are the priority reforms?

www.ippr.org

How do the different mechanisms interact?

• Many potential synergies and conflicts, e.g:– Top down intervention can build capacity in

failing organisations, but excessive control may weaken professionalism and capacity to innovate.

– Centrally directed frameworks may facilitate choice and voice, but user pressures may then conflict with top down targets and controls.

– Purchaser / provider split may allow services to focus on outcomes rather than mechanisms, but may also lead to a loss of skills and knowledge in the service.

– Provider markets may facilitate user choice, but multiple providers may diffuse accountability.

www.ippr.org

How should reforms be sequenced?

• Some reforms naturally precede others, some have consequences for later reforms:– Intervention may be the first step towards

reform for a failing organisation. – Effective implementation of many reforms

itself requires significant service capability.– Contracts may create obligations that make

other pressures (both top-down and bottom up) less effective.

– Reforms which successfully empower users may de-legitimise the imposition of other reform, for example by central government…

www.ippr.org

How is the role of central government likely to change?

• The implications of reform are very significant for central government – especially if user voice establishes a high level

of legitimacy

• Reform will fail if the centre attempts intensive ‘system management’:– Information and co-ordination problems– Confused accountability and incentives– Conflict with user empowerment

• Can the centre really step back? This requires a changed relationship with the public.

www.ippr.org

How can reforms embed progressive values?

• Three sets of issues:– How should reforms be designed to support

progressive ends in the first instance?– How can they be made difficult to modify so

they are no longer progressive?– How can they be made difficult to remove

altogether?

• Presumably wide and durable public support is one key.

• What about support from professionals as well?

www.ippr.org

Can reform be developed into a compelling public narrative ?

• Labour can no longer assume the public services are its natural political territory

• Investment and reform:– spending set to slow post 2005-6– ‘reform’ was never an easy idea to articulate

• A compelling story is also necessary to facilitate a new relationship between citizens (as choosers, governors) and their services

• ‘Whenever a maid kicks over a bucket of slops in a ward…’

www.ippr.org

What are the key challenges and next steps in public service

reform?

1 What are the likely costs of reform?2 How do the different mechanisms interact?3 How should reforms be sequenced?4 How is the role of central government likely

to change?5 How can reforms embed progressive values?6 Can reform be developed into a compelling

public narrative ?

** How can this work be made most useful? **