Opinion: Before the debate – What’s the evidence?

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).

  • Chris Nicholson 16th Jan '12 - 2:07pm

    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

  • Chris Nicholson 16th Jan '12 - 8:41pm

    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.

  • Tony Dawson 17th Jan '12 - 6:32pm

    @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.

  • Michael Parsons 19th Jan '12 - 10:31am

    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.

  • Michael Kelly 9th Feb '12 - 2:04pm

    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..

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