The relaunch of the Beveridge group featured in Lib Dem Voice on 10th January, said that it hoped to generate debate amongst Liberal Democrats about how public services are best delivered.
Liberals in general are clear that public services should be democratically accountable at the lowest possible level. Where there is far less agreement is the role of choice, competition and the private and voluntary sector in provision of these services – particularly in relation to health and education. Inevitably many people’s reactions are heavily influenced by their own personal experience as a service user, public service employee or indeed as a local councillor.
So, before the debate which the Beveridge Group is seeking to promote, what does the research evidence show about the impact of choice, competition and the impact of involvement of the private sector? Some of this research was summarised in my CentreForum paper last year “Your choice: how to get better public services” and more recently by Bristol University’s Centre for Market and Public Organisation.
In relation to health services,
the evidence is that choice and competition, where it is based on quality (as proposed in the Health White paper) rather than price, is beneficial. In the case of schools, the evidence is rather more mixed. Rebecca Allen and Simon Burgess, in their Bristol University paper, argue that the empirical research shows at best a weak relationship between choice and standards. Machin and Vernoit’s research at LSE indicates that the academy programme under Labour, focused as it was on improving failing schools, had improved attainment both in academy schools but also those schools in the surrounding areas. However they note in other publications that the coalition government’s academies policy is not simply focused on failing schools and express a concern that this could tilt the balance of advantage the other way.
In respect to involvement of the private sector, Paul Grout finds that “Despite some horror stories… the general theme of private delivery of public services is that, on average, privatisation, partnerships and outsourcing have been reasonably successful”.
My conclusion in the CentreForum paper, based on the research evidence and liberal principles, is that greater choice, competition and a level playing field between public, private and voluntary sectors in service provision does generally lead to improved services. But we should proceed incrementally and regulation is key to ensuring that in the development of these public service markets the service users’ interests are always paramount. Let the debate commence…
* Chris Nicholson was until March 2012 Chief Executive of CentreForum the liberal think tank.
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14 Comments
Good article Chris. Looking forward to more debate about the role and provision of public services in the party.
I hope a real commitment to evidence-based policy can help bridge the party’s divide on health and education.
And if the evidence isn’t immediately unambiguous – as almost always seems to be the case in these areas – that means we need to put a greater emphasis on running trials, collecting data, analysing results from around the world and auditing ministers’ pick-and-choosing of evidence. A unit within Government (and our party?) to make sure these things are done or done properly would be a phenomenal investment. And if we can’t show that policies have any benefits, that rather suggests all these reorganisations aren’t worth the hassle; or that we should therefore go with ‘the most liberal’ approach; or that there are other limiting factors (e.g. parenting, early years).
There should be no more exemption from VAT for the luxury and socially divisive expenditures on private schools and private health services. To that end abolish charity status of private schools.
The revenue raised should go to increase the resources of the NHS and State schools, improve standards, reduce opting out, increase opting in by the wealthy, articulate and influential, increase readiness to pay necessary taxes – all a virtuous circle instead of the current vicious circle.
“Before the debate – What’s the evidence?” – a very good principle, and a very interesting article. Thank you Chris.
I also value this article because in the end it is the evidence that counts.
There are some points I would like to raise.
As Chris alludes to, the issue of democratic accountability is important, and this is a serious issue where Michael Gove “The gentleman in Whitehall knows best” goes round telling parents in Harringey that they have to accept academies whether they agree to them or not.
Also I am wondering if the study has looked at social mobility? I suspect middle class parents who value education more – in general – because they have benefitted from it themselves – will be better at taking advantage of choice compared to working class parents and this will inhibit social mobility as a result.
Finally I am wondering if the studies say anything about the NHS reforms? Because to make the wholesale changes in one go without trying them out on pilot project first seems a very risky thing to do and not based on the evidence.
For the NHS and schools changes it seems to early to make a call.
Geoff,
On social mobility with respect to the education reforms Machin and Vernoit do raise concerns about the sharp elbowed middle classes gaining advantages which is why I think the efforts which Lib Dem Ministers are making to ensure fair access are so important.
On the NHS reforms I think some of the benefits of choice and competition introduced to date, are already becoming clear but we should be cautious, which is why I advocate an incremental approach rather than simply pilots
The key to Chris’s article is the phrase ‘incremental approach”. An incremental approach to where? Where do we think we are going? Few have difficulty with a mixed economy in the delivery of public services, bringing in elements of choice and competition where that produces better outcomes on the whole (which may or may not be the case).
Such decisions should be based on sensible pragmatism and backed up by hard evidence and made by democratically accountable bodies.
That is not where we are now. There are those who think the right way to run public services is to create a market and let governments or citizens purchases services within it. They see no real case for local or national government directly providing services.
There is no evidence as such for this view and many obvious arguments against.
Its an ideology or a market ideal to which we can be incrementally nudged. Thus there is thought nothing wrong or odd in putting all public sector work up for grabs (police and army excepted).
Let’s debate the evidence but let’s not miss out on identifying and assessing the ideology that underlies most of what passes as public sector reform. For that not evidence drives it .
John Pugh – I don’t think anyone within the Lib Dems is suggesting that citizens purchase public services. All in the party have been very clear in supporting schools and health being free at the point of use. I have no problem with public sector bodies providing public services on a level playing field with other providers. But choice and competition within a regulated market can have a role to play. Whereas in other cases choice and competition in a market will not make sense – hospital A&E being an obvious example.
I think I need to see a definition of “incremental change”. My understanding of incremental change is that it is slow and reversible (in case it doesn’t work as hoped), and therefore similar to pilot projects. I am surprised that the author perceives them to be 2 different distinctive alternatives. I do not sense that my understanding of incremental change is going on with the NHS reforms where there is wholesale change taking place within a short timespan.
One thing I do not know and I would be interested to know the answer is what specifically are Lib Dem MPs doing in relation to free schools and academies to improve access to working class children and improve social mobility. As is agreed the natural bias of free schools and academies is to mitigate against social mobility so whatever the policy is it needs to be good, and communicated to Lib Dem members.
@Chris Nicholson
“in other cases choice and competition in a market will not make sense – hospital A&E being an obvious example.”
I would go much further than that. The so-called ‘market’ in energy suppliers and those who we have sold franchises for moblie phones are both delusions. There is no real competition at all, even in the only really ‘competitive’ bits of these ”industries’ which is the right to send us bills for what we have bought. We are ripped-off not by a monopoly but by five or six firms which each pad out the lives of their lazy higher echelons on the backs of a state licence to print money. At least with the Water industry we have not (yet) created one of these pretend markets. They just rip us off in a proper private monopoly! 🙁
As for the NHS, it is far worse than just the A&E departments.the proposed ‘GP-led (sic) markets’ will be no such thing and will be even worse than the present set-up: people who know nothing at all about patients’ wishes, clinical priorities or true markets living it up on over-inflated salaries, on effectively a 2 per cent tax of the whole NHS budget just to satisfy some teenage scribbler’s wish to turn his mental self-stimulation into a ‘reality'(sic). The NHS ‘Providers’ will continue to call the shots while the GPs end up paying premiums on the present salaries of largely-useless PCT staff (or private sector equivalents) so that they can largely-avoid wasting their time on sums and get back to the thing they trained to do which is treating patients.
It’s worth mentioning the introduction of league tables has incentivised many schools not to enter worse students for exams. While this may not change the quality of education it does reduce the quantity of qualifications and thereby restricts opportunities for those most in need of them.
So perhaps it would help if we could distinguish between essential services and emergency services to identify the different roles of providers in each area.
@Geoffrey Payne and Oranjepan; I’m not sure what our MPs are doing about Gove, Academies, the English ‘Baccalaureate’ (sic) and access for the disadvantaged. I know that LD Education Association luminaries like Peter Downes are active in the Anti-Academies movement, and many of their members are doing heroic things as local governors in opposing conversion to academies, but our only Minister is Sarah Teather. It seems in Schloss Gove, Sarah, like Rapunzel, is confined to a distant, high tower marked ‘Early Years and Additional Needs’ (in which she does an excellent job), while Baron Gove and his young Tory knights plot their next foray of waste and pillage into any remnant of ‘Education for All’ in England.
In this City (Peterborough) we are seeing the results of ‘every school is an island’ policies encouraged by New Labour and accelerated by Gove’s ‘all shall be Academies’ version of localism. There are now estimated to be a shortfall of 600 to 800 school places in the City, over 200 of them in secondary schools, officially because of an ‘influx of families with children’ in 2010/11. Noone denies that the City is a relative magnet for migrant workers from Eastern Europe with large amounts of casual semi-skilled work in food processing and warehousing – but they didn’t all suddenly come last year.
What previously happened was that Children’s Services refused to register school age children themselves, handing parents a brochure which listed the contact details of schools and leaving them to fend for themselves. Parents were left to apply to school after school, only to be told there were no places, often after waiting weeks for a reply. When they returned, frustrated and tearful, sometimes after months with no education for their children, they were sent away again, this time to the local Connexions service who ended up having to assist the parents in enforcing their rights with a named officer of the education section.
This has all become revealed because of a damning OFSTED report on Children’s Services in Peterborough where previous budget cuts and negative staff attitudes had prevented adequate ‘safeguarding’ of vulnerable children, but also, probably, because early returns from the 2010 Census have reavealed the shortfall – just 5 years after 3 secondary schools were closed because of ‘surplus places’.
What does this have to do with overall delivery of public services – it shows that whatever the final deliverer – public or private – there needs to be adequate oversight of a publically funded service, and that ‘responsible’ bodies, such as local authorities are necessary if the rights to access public services of individual citizens are to be upheld.
How right John Pugh is!
I suggest that no matter what system you introduce, without active steps to keep alight that little spark of power that is supposed to reside in the breast of every citizen only grief will result. The vital step is to give each of us access to the means of making sure that the laws, regulations and promises are implemented, whichever form is introduced. Otherwise self-regulation means no regulation, as the banks demonstrate these days looting our tax and economy.
We could give the Local Authority Ombudsman power to investigate parishes and town councils as well as district councils, and make the findings binding; while checking the self-censorship that has currently developed. We could every citizen the right to take action wherever monopolistic or unfair practices are met, with both civil and criminal proceedings before appropriate cheap tribunals or land courts as free from barrister-influence as may be (following Athens of old where the citizens held “skilled speakers” trained to make the worst look the best confuse the people’s moral sense). In this age of e-bay politics local “representatives” tend to address their financiers’ interests rather than the voters. anyway.
This article is ideaological in its conception. Little or no effort is made to define the key terms of choice and competition, instead we are encouraged to equate them with the workings of the free market. The problem here is that the free market itself cannot function effectively in an environment when demand is open ended and costs are exponential. In truth the ultimate logic of such an approach is the rationing of healthcare within the NHS..