25 years ago, when I was Leader of Kingston Council, Margaret Thatcher was planning to introduce Compulsory Competitive Tendering (CCT) for services like bin collection and road sweeping. The Council Director responsible for these services started working out what measures he would take to improve efficiency and cut costs. But then the government announced a delay in CCT so he proposed shelving these plans. I said no.
I often recall this incident when the subject of competition in public services comes up. Liberals should never be afraid of competition where it is likely to lead to better public services. Nor should they be afraid of individual choice as this helps to achieve more responsive public services with better value for money. But care must be taken to ensure equal access and positive action to help disadvantaged groups as the pupil premium and the planned health premium seek to ensure. And promoting competition should not be the primary duty of a regulator. Competition is a means to the end of better public services not an end in itself.
The party’s Huhne Commission on public services (of which I was a member) almost ten years ago established the principles of a level playing field between providers and services being delivered at as low a level as possible with democratic accountability.
There is also emerging academic evidence, summarised in my recent CentreForum report “Your choice: how to get better public services” that competition and choice are driving better performance across public services.
So it is with this in mind that Liberal Democrats should consider our response to the much delayed “Open Public Services White Paper” due to be published on Monday.
Is accountability by choice promoted? Is democratic accountability preserved and ideally enhanced where services are commissioned? Will the potential role of employee ownership, mutuals and the voluntary sector in providing public services be supported? Will the government as far as is sensible be securing a level playing field between different providers?
If it does then Liberal Democrats should give it a wholehearted welcome.
Chris Nicholson was Liberal Democrat Parliamentary Candidate for Streatham in the 2010 General Election and a former Leader of Kingston Council.
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11 Comments
OK I haven’t read the report yet, and I look forward to receiving it.
I would like to make the following points;
If I recall correctly, CCT forced councils to accept the lowest bid. The lowest bid does not always equal the best, and the scandals of poor service in the caring profession show the dangers where competition is based on price rather than quality.
I think it is absolutely essential that we should be a lot more critical about the private sector. Private sector failures, whether to do the Murdoch media or the swindling banks demonstrate many times over that their priority is profit by any means necessary and you need tough regulations to stop the kind of abuse we have seen recently. Private sector involvement needs to be tested in pilot projects and not introduced on a grand scale all at once.
“Is accountability by choice promoted? Is democratic accountability preserved and ideally enhanced where services are commissioned?”
An equally fundamental question is whether genuine democratic accountability is compatible with accountability by choice when an organisational boundary – and a contracting relationship – is created between the democratic process and service provision.
Geoffrey,
The key is getting the service specification right in the first place – this is relatively easier for things like bin collection – less so for complex medical proceedures. This is supported by research evidence, quoted in the CentreForum report. So the party was right to press for competition by price to be ruled out in respect of the NHS.
The CentreForum report also argues for evolution rather than revolution in the transformation of public services and emphasis on the role which regulation should play. One of the unfortunate by-products of the row over the role of Monitor as a regulator in the NHS I fear could be a perception that the Lib Dems are against regulation, which of course is far from the truth.
@geoffrey “. Private sector failures, whether to do the Murdoch media or the swindling banks demonstrate many times over that their priority is profit by any means necessary and you need tough regulations to stop the kind of abuse we have seen recently. ”
In the NOTW there were criminal activities. no further regulations are needed merely an effective enforecement of the law.
What ‘swindling banks’ ? incompetent clearly, criminal – hasn’t been any evidence of it.
@Simon McGrath
There’s plenty of evidence of criminality in the way banks were lending mortgage money. Ever heard of ‘liar loans’? The fallout from their criminal behaviour is still, in the most part, yet to be felt.
Furthermore, for banks such as the Northern Rock that broke every regulatory red flag in the book (lending high LTV loans, lending on high loan-to-income ratios, rapid increase in market share, etc), it could be argued that because it was so obvious that their business model was unsustainable then their behaviour amounted to short-term profiteering by individuals who knew they would be able to cash in large sums of money before the inevitable collapse. The behaviour of the regulators is also potentially criminal, given that they failed to prevent the most obviously corrupt practices from continuing. The fact that nobody’s facing prosecution, as with the News of the World, speaks more of the complicity of politicians in propping up the system as they are too afraid of the perpetrators (i.e. the City with the banks, and Murdoch’s empire with the NOTW).
@Chris Pleased to see evolution rather than revolution. The NHS reforms are certainly not the way to go in this regard. In any case, if we believe in localism then surely it should be local government who decides whether to go ahead with many of these reforms. Micheal Gove recently pronounced that the bottom 200 primary schools should all become academies. In other words a central government Whitehall dictat.
I am not sure about your examples where price should be the criteria for bin collections but not the NHS. Even with bin collections, as with the carers (does your report refer to the caring profession BTW?), competition for low prices can lead to a poor service and exploitation of the work force (does your report look at worker exploitation?).
Chris – I welcome this article as a much-needed reminder of the debate our party needs to have about the role of choice, competition and State vs private provision in and of public services.
Whenever choice and competition are raised, I apply a very Amartya Sen-type analysis – if choice is expanded, so must the capability of everyone, most of all the vulnerable, poor and marginalised, to exercise said choice. For without the capacity to act upon it, all we face is a tyranny of choice. And this isn’t simply an argument for more information to be made available – without the means (monetary, educational or time-related) to access information, people will increasingly face meaningless choices between providers they can’t distinguish between.
This inequality of capability to exercise choice – manifest as being less mobile between providers, for example, leads to the near-inevitable capture of the better services by the wealthy.
I want to emphasise I am not dogmatically opposed to choice and competition, I just feel that excellence, democratic accountability and equality, not just of access but of outcomes, must take precedence over the provision of choice and its implied partner competition amongst providers.
This is a debate that the White Paper will kick-start, and must be had in full before the next manifesto is written…
‘steve – you seem happy to throw about charges of criminality. How on earth did the FSA behave criminally. In fact you have misunderstood what brought down Northern Rock, It was the fact that they were financing long terms loans by short term borrowing. This is a classic bamking problem which the FSA should have spotted – again incomeptence not criminal.
You also assert that individuals cashed in large sums of money knowing the crash was coming. Very little actual evicence for this -indeed Bear Stearns and lehmans both mandated that large parts of bonuses be kept in their own shares – much more than most banks. Disnt seem to make any differnce to their behaviour.
@Prateek “I want to emphasise I am not dogmatically opposed to choice and competition, I just feel that excellence, democratic accountability and equality, not just of access but of outcomes, must take precedence over the provision of choice and its implied partner competition amongst providers.”
But in fact your conditions would ensure there never was choice becuase some people will always be better/more motivated to make choices than others.
You ignore the fact that choice and competion may still imporve overall outcomes, including those of the disadvanged even if the middle classses make the best use of choices.
@ Simon McGrath
“You ignore the fact that choice and competion may still imporve overall outcomes, including those of the disadvanged even if the middle classses make the best use of choices.”
It is not a “fact”, merely an assertion. If a local school becomes a sink institution, for example, only the parents who can afford the time and money to take their children to other schools outside their area will be able to exercise the choice to opt for another school. If you have to work shifts at the wrong times and don’t have a car, the “choice” becomes like it or lump it. Likewise, if a local hospital starts to fail because a “competitor” takes “business” away, the old, infirm and immobile in the local catchment area, who don’t have cars and have to rely on public transport (often not designed with their needs in mind), are forced to carry on using it.
I have read (someone else might want to verify this) that in the case of Swedish schools, overall standards across the educational system have fallen, not risen, as middle class parents have opted to put their kids into the new schools and the rest have suffered declining standards. Certainly they are very little different from those in the UK when examined under PISA international standards.
I am deeply disappointed that we should have Liberal Democrats supporting this “choice” agenda apparently unthinkingly without examining what the practical, on the ground implications really are. The theory is great, but the reality is quite different. As a non-ideological party we should be able to distinguish between the two.
I don’t want more choice for God’s sakes. When my illness flares up I don’t want to have to spend time “choosing” between different hospitals – I just want to be taken to my local hospital and taken care of. I don’t want to “choose” different companies to do the bins, I don’t want to have to compare welfare providers.
I’m sick of this whole choice and profit in public services rubbish. It, to me, is simple: some thing are too precious and crucial to be left to the strip-it-to-the-bone type of casino capitalism we live under. That said, there are some things that are too dynamic for the state and benefit greatly from competition and markets. Things like healthcare, welfare, police, etc. are rightly in the public sector. Things like clothing and holidays are rightly in the private sector.
Some people, sadly, think everything done by the state is horrible. These fundamentalist free market worshipers have obviously ignored the way the private sector has messed up in recent years to the point where the public sector had to bail them out.
I really despair of the way things in this country are going. Soon you’ll be telling us air should not be free and that we should pay private companies and “compare” the air we breath so we all have a “choice”.