1. www.ippr.org Public Service Reform – from theory to policy? Richard Brooks

2. www.ippr.org Outline 1Context 2The governments model of PSR 3Is this a useful model? 4Theory and evidence 5How will the model be developed? 6What are the key challenges and next steps in public service reform?

3. www.ippr.org Context External drivers of reform –Social, demographic and technological change; rising public expectations; resource pressures; limitations of current services and of top-down reform approaches. Ongoing ippr PSR project to end 2006 Immediate context provided by June 6 th National School of Governance Conference & PMSU paper The UK governments approach to PSR

4. www.ippr.org The governments model of PSR Source: PMSU 2006

5. www.ippr.org The governments model of PSR Source: PMSU 2006

6. www.ippr.org Is this a useful model? Yes: –Explicit account of what is already happening –Sets out objectives, with a progressive flavour –Sets out theory and evidence for scrutiny –Acknowledges some of the risks –Sets reform approaches alongside each other rather than presenting them in isolation As it stands, helps identify areas of the public services that look like priorities for reform –local public services; police/community safety; armed forces? What do we want from a general model of PSR?

7. www.ippr.org Theory and evidence Theory sound but at a high level of generality Broad approach is risks can all be managed with appropriate policy design Should we simply accept that choice does not always support equity and move on? Theory of user voice relatively underdeveloped, and evidence base is thin Evidence sometimes difficult to interpret due to specific circumstances and policy designs But reform cannot wait for perfect evidence…

8. www.ippr.org How will the model be developed? Questions for central government: –What happens next to this model? –What should other parts of gov.t be doing with it? –How will it inform the CSR, future green & white papers, departmental strategies and plans? Questions for everyone (including ippr project): –How can such cross cutting work be most useful? –What are the key issues for further development? –Can we develop a useable PSR toolkit? –What are the specific policy implications?

9. www.ippr.org What are the key challenges and next steps in public service reform? 1What are the likely costs of reform? 2How do the different mechanisms interact? 3How should reforms be sequenced? 4How is the role of central government likely to change? 5How can reforms embed progressive values? 6Can reform be developed into a compelling public narrative ?

10. www.ippr.org What are the likely costs of reform? Reforms have costs which need to be weighed against potential benefits: –Some costs are explicit: e.g. premia paid to encourage new providers to enter a market. –Others result from new market structures, e.g. transaction costs or loss of economies of scale. –Supporting choice and voice may be expensive. –Reorganisation requires corporate resources. These costs may be outweighed by improved efficiency or quality Costs and benefits are likely to vary between services. What are the priority reforms?

11. www.ippr.org How do the different mechanisms interact? Many potential synergies and conflicts, e.g: –Top down intervention can build capacity in failing organisations, but excessive control may weaken professionalism and capacity to innovate. –Centrally directed frameworks may facilitate choice and voice, but user pressures may then conflict with top down targets and controls. –Purchaser / provider split may allow services to focus on outcomes rather than mechanisms, but may also lead to a loss of skills and knowledge in the service. –Provider markets may facilitate user choice, but multiple providers may diffuse accountability.

12. www.ippr.org How should reforms be sequenced? Some reforms naturally precede others, some have consequences for later reforms: –Intervention may be the first step towards reform for a failing organisation. –Effective implementation of many reforms itself requires significant service capability. –Contracts may create obligations that make other pressures (both top-down and bottom up) less effective. –Reforms which successfully empower users may de- legitimise the imposition of other reform, for example by central government…

13. www.ippr.org How is the role of central government likely to change? The implications of reform are very significant for central government –especially if user voice establishes a high level of legitimacy Reform will fail if the centre attempts intensive system management: –Information and co-ordination problems –Confused accountability and incentives –Conflict with user empowerment Can the centre really step back? This requires a changed relationship with the public.

14. www.ippr.org How can reforms embed progressive values? Three sets of issues: –How should reforms be designed to support progressive ends in the first instance? –How can they be made difficult to modify so they are no longer progressive? –How can they be made difficult to remove altogether? Presumably wide and durable public support is one key. What about support from professionals as well?

15. www.ippr.org Can reform be developed into a compelling public narrative ? Labour can no longer assume the public services are its natural political territory Investment and reform: –spending set to slow post 2005-6 –reform was never an easy idea to articulate A compelling story is also necessary to facilitate a new relationship between citizens (as choosers, governors) and their services Whenever a maid kicks over a bucket of slops in a ward…

16. www.ippr.org What are the key challenges and next steps in public service reform? 1What are the likely costs of reform? 2How do the different mechanisms interact? 3How should reforms be sequenced? 4How is the role of central government likely to change? 5How can reforms embed progressive values? 6Can reform be developed into a compelling public narrative ? ** How can this work be made most useful? **