The Saturday debate: Choice is a poor way of improving public services

Here’s your starter for ten as we experiment with a new Saturday slot posing a view for debate:

The enthusiasm across the political spectrum for using choice to raise standards in public services is misplaced because:

  1. For many public services, it’s vital to get the service right first time – for everyone. Children only get to go through school once. You don’t want to discover after a botched operation that you should have chosen a different surgeon.
  2. Choice requires surplus capacity to be meaningful – but it’s hard enough to fund minimum capacity in public services without also building in surplus capacity.
  3. Choice is greatly hampered when there are very long lead times for changes in the delivery of services, such as building new schools or hospitals. Those require decisions that have to be improved and informed by other methods.

Choice where possible is good, but increasing it is peripheral to raising standards in public services.

Agree? Disagree? Comment away…

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19 Comments

  • Martin Land 16th Jan '10 - 9:49am

    Choice is an interesting option for Londoners. Perhaps for some other big city dwellers. but for the rest of us we have no choice at all anyway. I live in the largest town in Cambridgeshire, but we have no hospital at all, so obviously no choice at all!

  • Andrew Suffield 16th Jan '10 - 10:10am

    Possibly the most important reason:

    Most people are not very well informed about the choices they make in their service providers, even when those choices are very important too them (like their choice of surgeon, for example). They don’t have the information they need to make a good decision, they don’t know how to get that information, and they aren’t capable of distinguishing between fact and advertising.

    This is not something you can fix. Any system which is built on the assumption of an “intelligent consumer” is unrealistic. Certainly we should allow for the possibility of intelligent consumers who can make their own choices, and businesses who cater to them, but the focus has got to be on making sure that the ‘default option’ (interpreted as whichever options people are flocking to) is as good as we can make it. This applies equally to publicly-operated services (like schools) and publicly-funded, privately-operated services (like trains).

    A practical example of how ‘choice’ fails: last year, one of the local bus companies started a new route. Shortly after this, another company started running a bus on the same route, calling at each stop 5 minutes before the first company. As if this wasn’t bad enough, they also repainted the buses the same colour. This meant they swept up all the people who had been waiting at the bus stop, the following bus picked up almost no passengers, and the average waiting time was twice what it should have been for the number of buses servicing the route. Choice was not helping the passengers here, it was just encouraging inefficient scheduling.

  • Choice in public services is the biggest white elephant of the last decade. Choice works in other areas because people are able to make an informed decision and then exercise that choice. But that information is usually based on very little information, generally the most basic one of price (possibly with service as an additional factor). When it comes to public services you’re asking someone to make a choice on the basis of so many factors, most of which are beyond the ken of all but the professionals actually within the field. For instance, if I’m off to hospital, I have no idea how to choose between the best surgeons or the best nurses, who’s likely to diagnose best etc. etc. No table is ever going to be able to tell give me that information (as a thought process try and imagine a table that lists the best nuclear physicists in descending order and ranked according to criteria that lay person could understand).

    In response to Alix, there’s a good point there, people have some personal preferences, but these are probably relatively minor compared to the main one. In other words, I think most people care first and foremost that their child gets a good education, then they probably care about the religious/musical aspect (witness the fact that people are faking religion to get into faith schools). So yes people will have additional criteria, but these are criteria that aren’t sensible to provide choice in or information about since they’re so varied: whether the school teaches music well, whether the community likes the headmaster etc. etc. In relation to the question of “choice vs. no choice but good services” most would choose the latter, as I would. Mainly because the unsaid portion of that question is: what information can I possibly provide you with to help you make that choice?

  • Sorry Andrew, you got there just before me while I was typing.

  • Totally agree. Choice in education is a zero-sum game. The total number of places available across any given area is roughly the same as the number of kids living in that area, and good schools can’t expand indefinitely to meet demand so ‘choice’ is really an illusion. Sure it works out great for the kid who gets to go to a school better than his most local one, but it doesn’t work out so great for the kid who has to travel in the opposite direction.

    My son is going to primary school next year, and there’s only one non-sectarian primary school in the area – alongside two CofE and two RC schools – so the only choice I have is which sectarian school to send him to in the event that he doesn’t get a place at the one we want him to attend, which happens to be hugely-oversubscribed.

  • The original post and many respondents take a present-biased view without accounting for the benefits for service provision in the future. One by one:

    1. For choice to be irrelevant here, we must assume that everyone gets the “right” service at the moment. That’s clearly not true, more so for education than healthcare, and choice would enable the government to use popularity as a measure of quality, to try to replicate success elsewhere.
    2. Not at all. Even frustrated excess demand is a signal to the authorities.
    3. The fact that we can’t change some inputs to service industries immediately doesn’t mean we should never change inputs at all.

    Some other notes: With choice, you can remove your child from a bad school, and if your local hospital seems poorly run you can choose a better one. It’s just not the case that people make locked-in choices for the entirety of their lives.

    If one responds to this by saying that people “aren’t capable of distinguishing between fact and advertising”, or that there are no grounds for believing in a general “intelligent consumer”, it’s hard to see how one can agree with liberalism as a philosophy.

    In most sectors, there are multiple companies competing against each other. If we have a sector which is effectively a state monopoly, then it would be good to encourage competition within the state provision service.

  • We often find that areas with the least choice are the worst run. Take benefit payments. Does anyone think these are better run than schools? Or what about National Insurance Records – they tell me that they have a 17 month backlog for appeals by self-employed people they have overcharged, and the adjudicator tells me that they have such a backlog of complaints that it will take them over a year to respond to a request for adjudication. Or what about the public services monopoly that is the student loan company?

    I think few people oppose choice for GPs – you can choose one whose hours and style suit you.

    What next, a law saying that we have to use the closest optician to where you live? Or that the council may allocate you to an optician, according to a set of factors that takes no account of your preferences? Or the same for dentists? If I am allowed to choose who tests my eyes, and who checks for incipient glaucoma, kidney problems, and the like, why should I not be allowed to select a GP, or a school for my child?

  • Malcolm Todd 17th Jan '10 - 9:39am

    I think the suspicion of choice in public services (a suspicion I share) may arise because in practice too often the choice is in the hands of the supplier at least as much as the (ugh) “consumer”. This applies particularly to schools, of course, where few would question the rightness of parents choosing which school best suited their child if it were not for the likelihood that popular schools would then be able to choose which children to admit, at which point competition between schools turns into competition between parents, and the usual winners and losers emerge. There is some of the same effect for GPs and even hospitals, but to nothing like the same effect – perhaps because, so far, league tables have not made the same headway in health that they have, disastrously, in education.

    It would help if the power of “good” schools to choose “good” pupils were removed from the equation. Perhaps a specification that for a school to be entitled to receive state funding the only method it would be allowed to use for selection in the event of being oversubscribed would be a lottery.

  • Matthew Huntbach 18th Jan '10 - 12:02pm

    Free-marketeer types love to say “we don’t have a National Food Service, so why have a National Health Service?”.

    So, if we consider food, clued-up educated people are careful with their diet (generally, not always of course) and pay a little premium to get good food.

    Again, generalising, it doesn’t apply to everyone like this, less clued-up and less educated people get a poor diet. They are over-influenced in their choice by the advertising industry. Providers of good quality food don’t make much profit in the places they live, so they tend not to open up shops there, instead you have the “cheap and cheerful” merchants. Above all, the market mechanism working amongst the poor had DESTROYED the capacity to cope for oneself and make rational choices. Whereas I’m old enough to remember when poor people knew how to get cheap fresh produce and make good dishes for themselves (I did so myself last weekend – cheap cut of meat, vegetables from the market, five pounds or so to cook enough to feed myself for a week), these skills have been destroyed by big business selling ready made products from which it makes a good profit and which it heavily promotes through its control of the media and advertising.

    OK, this doesn’t mean I am against choice or want a nanny state dictating to us what we should eat or banning “unhealthy” products. Far from it. It does mean, however, I am not nearly so much under the illusion “competition will drive up quality” as the sort of starry-eyed free-marketeers who preach to us here and it seems in most other sections of internet discussion.

    Apply this as you like to education and health etc.

  • Matthew Huntbach 19th Jan '10 - 10:42am


    So students choose between universities, and the competition leads to diversity (and internationally rather good universities). Isn’t that the sort of choice we’re talking about?

    No, the universities choose the students. Students will generally apply to a range of universities which have entrance requirements at around what they think they will achieve, and pick whatever is the highest in the league tables that offers them a place.

    My own experience as a university admissions tutor is that students know little about the contents of the degree they are applying for and it does not have much impact in their choice. So a degree programme taught badly and with poor content at a university which is OVERALL higher on the Times Higher Education ranking will almost always be chosen rather than a degree programme with better content and taught better at a university with a lower OVERALL ranking if they are offered a place at both. It’s depressing, and the consequence is that universities put all their effort into whatever will drive them up the league table. Which is mostly getting research papers published in good journals.

    Of course, there will always be weak students and universities no-one much likes and which are at the bottom of the league tables, who find each other out of necessity. These universities really are competing for students – any students – to fill their places. Mostly the effect of the competition is to drive up the glossiness and pictures of pretty girls in the prospectuses.

  • People seem to be saying that because most people are too stupid to make decisions for themselves in public services, state bureaucrats must make decisions for them. Quite apart from the (rather undemocratic) ethics of that statement, I think such problems are mostly irrelevant when a properly functioning price mechanism is in place.
    When I choose to buy an iPhone, I have no idea whether it is more or less technologically efficient than another phone on the market, or indeed whether Apple are scamming me (me being not very technologically adept). But despite my lack of knowledge, I can still buy it and be confident that it works well, because I know that if Apple were ripping people off outrageously, then their reputation would suffer and one of their competitors could steal some of their customers, costing them profits. So it’s choice which actually stops service providers from exploiting a consumer’s lack of information.
    The same can apply to health and education- if choice is introduced, schools and hospitals keep on improving their services because they don’t want their competitors to overtake them. If Asda’s ready meals were ten times more unhealthy than tesco’s but people didn’t realise this, do you think tesco would hesitate to tell people that fact? (Also I think the power of advertising to influence people’s choices is wayy overrated- even the most heavily advertised brand fails completely if consumers don’t like it– eg. New Coke in the 80s).
    Of course what you need for that to work is a price system where service providers are rewarded for serving their customers well and lose money when customers desert them, but to me at least that seems more than possible for most public services. Sweden’s education system and Singapore’s healthcare system both provide universal service at quite low cost yet have strong elements of choice and competition (and Singapore has better healthcare outcomes than Britain while spending significantly less on healthcare as a % of gdp).
    Finally about the argument that the “best” private schools just cherry-pick the “best” pupils– firstly this assumes that most pupils are innately clever or stupid, which they are not: how clever you are is dependent on your education in the first place, and most private schools around the world compete to improve the lot of ordinary people rather than to overeducate the rich, priveliged and already clever. This might happen a lot more in Britain too if a) we had something like a voucher system and b) got rid of those dreadful league tables, which reward schools that cherry-pick while encouraging state schools to “teach to the exam” instead of teaching students properly.

One Trackback

  • By IEA Blog » Blog Archive » Competition will help Haiti on Fri 22nd January 2010 at 12:36 pm.

    [...] they might be inclined not to buy it. By offering them choice (a concept that is much-maligned in some circles) one is more likely to satisfy their desires and so raise more money for the [...]

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