From the TUC

Public Services Open for Business

11 Jul 2011, by in Public services

So we finally have it.  After months of delays, the Government today launched its ‘Open Public Services’ white paper. There’s little new here.  Most of its recommendations are gleaned from initiatives already announced in regard to health, education, mutuals and localism.

What the white paper does do, however, is re-affirm the Coalition Government’s commitment to the marketisation of all public services outside of national security and the judiciary.  We are back in the territory the Prime Minister occupied in the heady days before the Health and Social Care Bill unravelled.

David Cameron was adamant:

This white paper says loud and clear that it shouldn’t matter if providers are from the state, private, or voluntary sector

A clearer message to the market could not be given.  Public services are open for business.

In his speech today, David Cameron compared receiving public services to purchasing a mobile phone.  And this inability to differentiate between private consumer and public goods is reflected in his inability to discern between the motivations and likely outcomes from public, private and voluntary sector providers.

Those who think the Big Society means a greater role for charities, voluntary and community organisations and employee-led mutuals in delivering public services would do well to heed those words.  For this government, it does not matter if service delivery comes from the state, voluntary or private sectors.  There are no special favours in the Big Society, only the market.

And this is the really the nub of our concerns about the government’s approach.  For while there is plenty in the white paper related to the opening up of markets and competition for public services, there is next to nothing about safeguarding against privatisation.

On the day that Southern Cross announced that it was shutting down, the Government ploughs ahead with its marketisation plans regardless.  In the light of the current crisis, the White Paper makes the astonishing claim that:

The wider public sector has much to learn from local authority successes in commissioning, for example in adult social care.

Opening up competition is a primary objective and all barriers must be removed, with TUPE, Fair Deal on Pensions and “employment regulations” all on the table.  All providers should be able to compete on a level playing field.

But so much of the new delivery framework will favour larger operators.  Shared services, payment by results and personal budgets will necessitate providers with economies of scale and access to capital and cash flow to compete effectively.

This doesn’t bode well for the community organisations and employee-owned co-operatives out there.  Particularly when just two or three lines are dedicated to ways to ensure new providers can compete, through access to the hardly yet tested Social Impact Bonds or through access to philanthropy or enterprise capital.

Time and again, reference is made to the Work Programme as the model.  But as we reported before, this has led to private enterprises cornering the market and letting out sub-contracts to voluntary sector organisations, most of whom appear unhappy with the terms of their sub-contracts and the weakness of the Merlin Standards that have been established to police those contractual relationships.  The Work Programme does not stimulate innovation as it restricts providers to exclusively chasing output targets and little else.  The document’s reference to “aligned incentives” brings to mind the tortuous language of rail privatisation.

While there’s much in the White Paper that has already been announced, there are some significant policies that are conspicuous by their absence.  Key members of the Mutuals Taskforce, Co-ops UK and plenty of others have called for more clarity from the government on safeguarding against private take over, for example through the use of asset locks.  The complete absence of any such safeguards is a huge concern and explains why the Government is now incurring the wrath of previous supporters of this model of public service reform such as the Social Enterprise Coalition.

Concerns about continuity and integration of services, accountability, service quality and regulation of public services in a fragmented landscape of largely private sector provision are addressed by a combination of presentational gimmicks (local TV anyone?) and faith in consumer-led accountability.  We will provide more consideration of these proposals as the details are fully absorbed.

But the fact that the Government is using the White Paper to promote the accountability role of “independent champions” such as the “Taxpayers Alliance” does little to calm our fears.

2 Responses to Public Services Open for Business

  1. Michael Granger
    Jul 12th 2011, 5:36 pm

    How they can even suggest yet that the work programme is a success…considering it has only just been rolled out.

    How this makes public services more accountable is beyond me as apparently they would like to dispose of ‘red tape’ that has hindered services in the past? Considering it is usually these ‘beauracratic red tape’ organisations that are responsible for holding services to account. Perhaps the Tax Payers Alliance for example have developed a new method of monitoring and evlauating services without requiring any paperwork, manpower and/or tax payers revenue??

  2. More than 2,200 charities facing cuts | ToUChstone blog: A public policy blog from the TUC
    Aug 2nd 2011, 11:32 am

    […] cuts also beg the question – what about the Big Society? We saw the launch of the long awaited Open Public Services white paper last month, which heralded a ‘big society’ […]