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“I am expecting local councils to provide more for less”: The third sector and public
services – opportunity or exploitation?
Prof. Tony BovairdTSRC/INLOGOV
June 2011
Context
• Getting ‘more for less’: expectation and reality
• ‘More for less’ strategies and tactics
• Commissioning, procurement, contracting and delivery
Getting more for less: the expectation• We have been here before
• The expectations are often high – Gershon Review, 2004
… and why not?• Is it really possible to believe that we CAN’T save
X% p.a. through:– Service redesign, leaner processes, new ICTs, smarter
procurement, training, customer orientation, restructuring, relocation, engaging younger/smarter/cheaper staff, dealing with ineffective staff, bringing in volunteer-based organisations, better project/supply chain management, etc.?
• X% was 1% and then 1.5% in utilities and SOIs in 1980s, then became 2% in 1990s, 2.5% after 2000, 4%+ after Gershon
Well, here’s why not …
• We do all of the previous ‘improvements’ badly much of the time – innovation is not a smooth upwards process
• Some innovations can undermine each other
• Many innovations cost more and improve less than expected
• Disruption effects can outweigh positive improvements for a considerable time after introduction
• [But still the dream goes on …]
CPA scores: number of upper tier authorities in each category
1 1
2118
15 9 5
4040
3331
25
5456
60 70
71
22 2641 39
47
13 10
2002 2003 2004 2005* 2006**
4 stars
3 stars
2 stars
1 star
0 stars
* 2005 - scores include the quarterly updates** 2006 – 1 council’s star category is subject to review
We can choose numbers that sustain the dream
95
100
105
110
115
120
125
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
All LAs
21.9% increase in
service performance
Performance improvement - indexed on performance in 2000/01 (CLG, 2006)
Based on a representative basket of BVPIs indexed back to 2000/01
Measuring what we’d like to see(CLG, 2006)
Table 2.1 Indexed measures of local government performance – by service
2000/01 2001/02 2002/03 2003/04 2004/05 2005/06
Primary Education 100.00 100.91 102.45 102.98 102.81 111.18
Secondary Education 100.00 103.49 107.03 109.67 108.83 108.47
Children's Social Services 100.00 107.90 113.87 122.00 127.36 128.88
Adults' Social Services 100.00 105.24 110.25 116.87 118.09 122.99
Housing 100.00 102.07 106.68 111.25 116.67 124.74
Benefits 100.00 103.22 112.83 120.95 123.68 129.62
Waste 100.00 105.62 123.07 153.22 191.67 230.90
Transport 100.00 100.00 100.00 108.85 108.85 118.75
Planning 100.00 100.65 101.16 105.91 109.94 114.38
Culture 100.00 110.87 142.84 141.61 169.55 182.19
Community Safety 100.00 96.22 95.86 104.76 131.23 140.08
Of course, there is usually an antidote to selective figuring - overall citizen satisfaction declined 2000-06
(MORI, 2007, for CLG)
… but we have ways of rescuing some good news from the ashes
… until reality again intrudes!
And bluntly, we did not see this coming: results from council officers survey (‘Cardiff 100’)
2.6
2.7
2.8
2.9
3.0
3.1
3.2
2001 2002 2003 2004 2006
Figure 4.5 Reported performance 2001- 2006 (Cardiff 100)
Staff satisfaction
User satisfaction
Effectiveness
Efficiency
Value for money
Quality
Mean score on scale from 1 to 4
2.8
2.9
3.0
3.1
3.2
3.3
3.4
2001 2002 2003 2004 2006
Figure 4.6 Reported performance 2001- 2006: Service Quality (Cardiff 100)
Education
Environment
Planning
Culture & leisure
Social services
Benefits
Housing
And why did we not see it coming?
• We didn’t spot the trend which WAS in the data until too late – forecasting the peaks in cycles is notoriously fraught
• But we also were looking at and measuring the wrong things …
The NPM version of public sector reform – a service perspective
• Service improvement– but just for public services
• Accountability of public services– to service users, taxpayers and to central
bodies (e.g. National Audit)• Strategic management of public organisations
– not community leadership• User involvement and choice in services
– Not engagement and co-production by general public, citizens or other stakeholders
• Public confidence in service provision– Not in the public sector or its institutions
The public governance approach to public sector reform focuses on:
• Quality of life improvement– not just service improvement, and including ALL services which
contribute to citizens’ quality of life• Accountability
– of ALL services and ALL sectors• Community leadership
– by all organisations, not just public sector• Public/stakeholder and citizen engagement and co-
production– within frameworks of democratic renewal and social inclusion (in
both decision-taking and quality of life outcomes)• Public confidence in the workings of government, society
and the economy
LESSON FOR 2011: EFFICIENCY GAINS CAN SUPPORT ALL OF THESE BUT THEY ARE INDEPENDENTLY IMPORTANT
Strategies for getting ‘more for less’
• Services shift – transferring or sharing the responsibility for service provision
• Service prioritisation – getting more outcomes from existing resources by focusing on what key stakeholders actually want
• Productivity shift – getting more outputs from existing resources
• Resource generation – mobilising more resources from outside the tax base
Services shift• Shift (some) responsibilities to other
governmental units• Shift (some) responsibilities outside of
government – e.g. to third sector• Partnership working – sharing responsibilities• User co-production• Community co-production
‘SHARING’? OR JUST ‘COST DUMPING’?
Partnership working• Sharing the burdens as well as the pay-offs • Joint decision-making (shared budgets)• Commitment to innovation, not tied to hard-
and-fast specifications• Relationship contracting – doing the
specification cheaper, faster and better• Influencing the network, not controlling the
hierarchy or the ‘agents’• Sharing and trading capabilities and resources,
not insisting on the ‘right’ to get one’s way
Co-production – ‘beyond consultation’
• User co-production– Expert patients– Tenant’s repairs and improvements– ‘Group living’ for people with high social
needs
• Community co-production– Classroom assistants– Social care– Neighbourhood watch– Environmental improvement
Public sector outputs
Private and third sector
market outputs
Informal economy outputs
Formal volunteering and informal social value-adding
outputs
Value-adding outputs in market, public and third sectors and in civil society
Economic, Social, Political &Environmental Value Added
Modelling Birmingham
Issues around self-organising• Government is going have to learn a lot more about how it is
currently working
• … and about how it could be helped to work better
• … and how about how to lean on it when it’s NOT working well but is needed
• … and about when NOT to use it and how to explain this to the people involved
• Local councils are much better placed to help here
Why ‘co-production’ of public services?
• SERVICE USERS know things that many professionals don’t know ...
• ... and can make a service more effective by the extent to which they go along with its requirements
• ... and have time and energy that they are willing to put into helping others
• In all these ways, service users are an important part of the ‘co-production’ process of the service
• And other citizens contribute, too, in the process of COMMUNITY CO-PRODUCTION
Different types of co-production• Co-planning of policy – e.g. deliberative participation, Planning
for Real, Open Space• Co-design of services – e.g. user consultation, Innovation Labs• Co-commissioning services – e.g. devolved grant systems,
Community Chest• Co-financing services – fundraising, charges, agreement to tax
increases • Co-managing services – leisure centre trusts, community
management of public assets, school governors• Co-delivery of services – expert patients (peer support groups),
meals-on-wheels, Neighbourhood Watch• Co-monitoring and co-evaluation of services – tenant
inspectors, user on-line ratings
Distinctive principles of co-production
Co-production conceives of service users as active asset-holders rather than passive consumers.
Co-production promotes collaborative rather than paternalistic relationships between staff and service users.
Co-production puts the focus on delivery of outcomes rather than just services. Co-production may be …
substitutive (replacing government inputs by inputs from users/communities)
OR additive (adding more user/community inputs to professional inputs or
introducing professional support to previous individual self-help or community self-organising).
... And if you don‘t like that odd word 'co-production' ...
Service prioritisation
• Cut low priority services?• Cut least efficient services?• Limit demand or raise eligibility
criteria?
• NOT ACROSS-THE-BOARD CUTS• STRATEGY AS THE ART OF SAYING ‘NO’
Outcome-based public management: rhetoric or reality?
• Outcome-based accountability– Generally believed to be happening by strategic commissioners, at least at
partnership level, also through inspectorates
• Outcome-based commissioning and procurement– Patchy – some services already have a 7-8 year history of this, otherwise it’s often
marginal or new services
• Outcome-based contracting and delivery– Much more controversial – few providers want to take risk of only being funded on
outcomes achieved– But ‘payment by outcomes’ already in employment services, mental health and
learning difficulties support, offenders– Rather than payment for outcomes, providers tend to be driven by accountability for
outcomes at contract renewal stage– Argument in UK to admit that in many services there is still great uncertainty about
pathways to outcomes – SO, pay 3 year grants on ‘outcome promises’ to convincing providers, minimal specification, renewal if outcomes demonstrated
Productivity shift• ICT and e-government• Other capital substitution for labour• Business process redesign• Smart (joint) procurement• Training• Employee motivation• Customer service• CRM • Quality assurance• Performance management
Resource generation• Pursuing grants (EU/government) (‘accepting sweets
from strangers’)• Fundraising from community• Increase volunteering from community (and from private
and voluntary sector staff)• Raising capital from private or voluntary sector partners• Raising revenue contributions from private or voluntary
sector partners• Increasing prices to (low priority) users• Increase long-term borrowing (against growing asset
base)• Selling low priority assets
More for less: Managing the risks
• All change involves taking risk …– especially radical and superfast change
• But actually we are taking huge risks already – just not owning up to them
• Time for owning up to risk – and to our (often relatively minor) reductions to it?
• So when we report ‘new risks’ from mutuals, the public co-producing or self-organising, let’s surface how big the risks are when public agencies do the work
• And time to accept different risk-cost pay-off in the future?
Conclusions
• Efficiency and quality are different sides of the same coin – ‘improvement’
• Quality improvement depends on our definition – not agreed• Most public agencies need to use more than one strategy to get ‘more
for less’ … • … but few are exploiting all available tactics or keeping them
refreshed• ‘Joined-up government’ has so far meant joint spending rather than
joint budgets, joint saving and joint resource mobilisation• Co-production with users and communities is still limited – it can be
hugely expanded …• … but it will entail a new compact between service users,
communities, politicians and professionals• ‘Invest to save’ – requires time and money but should be more used• All of this will cost resources – ‘society’ and ‘community’ are not ‘free’