- February 19, 2024
In August 2018, the Home Office awarded grants to eleven Local Authorities (LAs) across England to deliver Trusted Relationships projects between 2018 and March 2022. As Implementation Partner for this programme, ATQ provided support to the projects. We therefore saw first-hand how the projects encountered and overcame their respective implementation challenges. Our report presents ATQ’s observations and the headlines are:
- Length and stability of funding is critical. Any support programme aimed at vulnerable people with complex needs will only work if it is designed and funded on a long-term basis – at least three years and preferably longer, as was the case here. This allows time for programmes to ramp up, overcome teething issues and avoid inefficient and ineffective spending as projects struggle to spend money in a limited timeframe. More importantly, it gives front line teams the time and space to establish working relationships with both the vulnerable young people that the programme is designed to serve, and the networks of statutory and non-statutory delivery partners that are part of any support service.
- Flexibility of project design is key. As this programme has shown, there may be common principles underpinning programmes aimed at complex issues but a range of different approaches is possible, and projects should (as these do) reflect local needs and organisational structures, especially if we want to understand better what works best by testing alternatives. A strength of this programme has been that it has allowed for such difference.
- Services and interventions need to be co-designed with those they aim to support, within obvious limits. Vulnerable young people need agency rather than top-down solutions to what others perceive as their needs. Services also need to sit both inside and outside statutory services – inside so that they can facilitate joined-up responses; outside so that they can successfully engage with those who have learned to distrust the system. It became very clear from direct involvement of young people with our shared learning events and other visits with officials that young people can be and are very articulate about their needs and how support can best be provided.
- Cross-cutting issues require joined-up solutions. This programme has shown how services targeted at a complex problem that do not fit neatly into public service silos can be the ‘glue’ that binds services together across areas that habitually have a different focus – especially those that treat people as victims needing support and those that treat them as offenders needing sanction and rehabilitation. Based on our four-year involvement, ATQ would contend that Trusted Relationships has provided this ‘glue’ for an average of around £250,000 per project per year.
- Understanding why people behave as they do is as important as what they do. The projects have shown the particular value of trauma-informed practice, and understanding how adverse experiences may shape the way people behave, and their willingness to respond to intervention. In our opinion, this is particularly important in CSE and CCE, where exploitation itself may lead to significant trauma.
- July 21, 2023
The Department for Education has just published the Final Report from a longitudinal evaluation of three SIBs that aimed to improve outcomes for young people leaving local authority care, with a particular emphasis on employment, education and training (EET) outcomes. ATQ Director Neil Stanworth was part of the evaluation team, which has been evaluating the three projects (In South London, Greater Bristol and Sheffield) since 2018.
Commenting on the report, Neil said “We’re really pleased that this report has finally been published, after a number of delays. It shows how social outcomes contracts can make a real difference to the lives of some very vulnerable young people, and also how social investment funding enables real flexibility in the way complex support is delivered.”
- June 29, 2022
Social Outcomes Contracts (or Social Impact Bonds – SIBs) have been a big part of ATQ’s work since we formed almost exactly 10 years ago, in August 2012. We are proud to have supported many organisations to set up and implement contracts, and in recent years have become heavily involved in research and evaluation of such contracts through work such as this for the Department for Culture, Media and Sport.
Last week saw the publication of what might be the most high-profile piece of research we have ever done, into the value created by Social Outcomes Contracts (SOCs) in the UK since they first started more than a decade ago. Our report was part of broader work by Big Society Capital (BSC) to reflect on and celebrate the growth of SOCs over the last ten years.
The statistic that has gained most attention from our report, and was mentioned at Prime Minister’s Questions last week, is that every pound spent on SOCs in outcome payments has generated more that £10 of value. In other words, and in the technical language of cost benefit analysis, the Benefit Cost Ratio was 10.2. Even if you accept that some of this value would have happened anyway (as it probably would in some contracts, but by no means all) we are still looking at a return to government and society of many times the initial outlay.
As one of many organisations that have been grappling with SOCs and SIBs, and whether they are value for money for many years, we hope this report will provoke further debate about whether and when such contracts are a useful tool in the commissioner’s armoury. Indeed it looks like that debate has already started, and we are happy to be part of it. For now, I would offer three observations on this piece of work.
First, our report is and always was intended to be entirely factual. It takes data on the outcomes that have been achieved by SOCs – as measured and validated by those contracts – and attempts to put a value on them based on the improvements they make to people’s lives. This is not an exact science, and so we were deliberately cautious – see below; but we are making no judgement on the efficacy of SOCs, and nor are we comparing the performance of projects with each other or with other types of contract. We have recently made a major contribution to another research report – the third update on the evaluation of the Commissioning Better Outcomes Fund – which does explore the strengths and weaknesses of SOCs in some depth, but this report does not do that.
Second, I am slightly puzzled by suggestions in some quarters that our value estimates are too big, and therefore somehow less credible. Puzzled because we were deliberately conservative in our assumptions, as we explain in some detail in our report. This is our usual practice when undertaking cost benefit analysis because we know that inflating ‘savings’ – either consciously or unconsciously – is self-defeating. Our clients sometimes challenge our caution, and ask us to make more optimistic assumptions, but we tend to resist. In this case we were even more cautious than usual, consistently using low estimates of unit costs saved when larger, well-evidenced estimates were available; assuming no sustainment of outcomes such as periods of employment; and leaving many outcomes which potentially have value out of our analysis altogether. The truth is that whenever we have done this type of exercise, the estimates we produce tend to be large because the costs of adverse outcomes – children in care, young people long-term NEET, older people needing hospitalisation for conditions that can be managed better at home – are themselves large, and much greater than many realise.
Finally, both the work we have done and the wider analysis by BSC seem to me to confirm that, whatever their other benefits and defects, these types of contract are delivering a pretty good ‘bang for buck’ and have leveraged a lot of value for not much spending. This is not just because of the benefit cost ratios outlined above, but also due to two other factors. First, according to BSC’s figures these results have been achieved with the injection of around £71m in social investment. This is much less than many expected, and there has been criticism in some quarters that investment in SOCs has fallen well short of projections. But a ’glass half full’ view would be that this is a good thing. The amount of working capital needed to smooth the wheels of these contracts (mainly to make the payment by results mechanism work for social sector organisations) has been much less than the total contract values, and this makes them pretty efficient.
The second point is that government and other bodies (notably the National Lottery Community Fund) have funded a high proportion of outcome payments made through SOCs, leading to criticism that such contracts only exist because of such funding. This is likely true (there have been very few contracts implemented without some form of subsidy from one or other so-called Outcomes Funds) but it does look like a reasonable investment, and it looks like a very good investment when one considers the particular case of the Commissioning Better Outcomes Fund and Life Chances Fund, which typically cover 20-30% of total outcome payments – with the rest coming from local commissioners. So the effective leverage of these contracts is maybe 3-4 times what it would be if they were wholly funded by government or the Community Fund.
And since many commissioners and providers have said that they would not have put up their own money without this pump-prime funding, what’s not to like?
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- December 19, 2019
For the last two years I have been a Fellow of Practice at the Government Outcomes Lab (GO Lab) which is part of the Blavatnik School of Government at Oxford University. It has been an immense pleasure and privilege to have had this role, from which I step down at the end of the year.
The GO Lab is doing a great job in bringing together a wide range of thinking on how we better deliver pubic services and address complex societal issues, around a central focus on how we deliver better social outcomes. This has also been pretty much the raison d’être of ATQ for the last seven years, which is in part why I ended up as a Fellow in the first place.
The Deputy Director of GO Lab, Nigel Ball, last week published this blog with some challenging reflections on whether and how a new government, with a substantial majority and clear mandate to govern for five years, will address the knotty problem of public service reform. I am extremely loath to summarise Nigel’s complex and nuanced arguments, and would urge you to read his blog in full before you read this one, but his central thesis is that public services have, for several decades, drawn heavily on both private sector management practice and, through outsourcing and privatisation, direct provision. This has led to a focus on top-down targets and contract-driven accountability for service performance and delivery. Nigel argues that:
“Many people – and much recent research – would agree that these ideas, though once useful, are running out of steam. A new approach seems to be slowly emerging, with a very different core underlying idea: greater participation with communities. No longer should we view social problems medically, talking of a “treatment” at the right “dosage” which can be measured for its “effect”. Rather, citizens themselves, grouped by a shared geography, interest or need, can participate in designing and delivering public services. No longer should we use top-down contracting mechanisms, making both public and private delivery bodies answerable to government agencies for the services they run. Instead, government and its agents should give away some of their decision-making power, and work together hand-in-hand with communities and civil society organisations. This might mean they hand over more cash no-strings-attached, and trust people to be intrinsically motivated to do a good job. For some of the most evangelistic proponents of the new approach, even the idea that it is possible to “deliver” outcomes is misguided – if we focus instead on working out what a better system would look like, the outcomes we want will appear.”
My initial reaction to these ideas is that they have much merit. In particular, I agree with the view that services should be designed with and for those they affect and are designed to help, rather than being imposed by those who think they know better; and that rigid contracting and commissioning models, backed by targets that distort delivery, can do as much harm as good. Beyond that, I would like to offer three ‘micro level’ observations and one ‘macro level’ thought.
At the micro level, I think this sort of empowerment of communities can co-exist alongside some of the good things that have emerged from the prevailing models of the recent past, and that there are a few babies that I would not want to see thrown out with the bathwater. These reflect both our own project experience and the evidence we have gathered through evaluations of others work. They include:
- The value of better evidence for what works (preferably supported by a thoroughly worked-through theory of change). Such evidence is far from perfect, and there are many limitations to how robust it ever can be in a policy/social context, but it is I think better always to start from an evidence base where it exists.
- The outcomes culture. Our consistent experience as both advisors and evaluators is that a focus on outcomes has benefits. One of the major disappointments of national debate is that it focuses almost entirely on inputs, rather than on outcomes, or even outputs. Witness endless bid and counter-bid throughout the election about who will build the most hospitals, recruit the most police officers, train the most teachers etc. I have become a strong believer in the value of identifying, measuring and managing through outcomes, with and without monetisation, and would need some convincing that such outcomes-based approaches are a retrograde step
- Strong performance management. By this I don’t mean the process of managing performance, which I agree can be over-driven by arbitrary targets. But much of the research I have seen shows clearly that any project – in-house or outsourced, contracted or grant funded, outcomes-based or conventionally measured – is crucially dependent on the effectiveness of those charged with its implementation. At one level this is a statement of the obvious, but it is arguable that one of the biggest failures of the top-down, private sector-style management approaches we have adopted is that they still tolerate far too much poor performance; and one of the benefits of outcomes-based contracts appears to be that they encourage swifter and more radical action to address under-performance, often by strengthening and sometimes replacing existing operational management.
My big picture thought is to wonder whether government should start to treat spending to improve social outcomes truly as investment – and therefore closer to capital spending on infrastructure than current spending on services? Many of the projects in which I have been involved in recent years have been supported by what is effectively an investment case – that spending on a preventative intervention will avoid or even reduce spending on a later, crisis-driven intervention. The problem is that such projects are far too small to make much difference, and as a nation we never seem to have the resources to twin-track to scale – to spend enough on prevention to make a real dent in the long-term costs of poor outcomes, alongside the ongoing expenditure needed to deal with those outcomes.
But if outcomes-based contracts can be funded by external investors – and deliver them a return when they succeed – it should not be beyond the wit of government to adopt the same approach, and fund much larger programmes from borrowing rather than from taxation, underpinned by a business case that shows a return on that capital. There are numerous areas where this approach could be adopted but how about targeted public health programmes, support to families with complex needs, and interventions to reduce substance misuse for starters? Done properly, such investment could be at least as justifiable as spending on infrastructure.
And yes of course I know that the Treasury would, to coin a phrase, rather ‘die in a ditch’ than allow this, but even an old cynic like me should be allowed to dream sometimes.
- December 2, 2019
The current general election campaign has brought commitments from both main parties to increase levels of public spending to historically high levels – dramatically in Labour’s case.
How does Government ensure that any new monies for front-line public services are spent effectively and not wasted?
With the introduction of additional money, there are two possible ways ahead. It is either a great opportunity for public services to invest in change and improve service outcomes or it can simply release the pressure and allow change to be put back into the ‘too difficult’ tray.
Necessity should be the mother of invention
In other spheres of activity, necessity is the mother of invention which drives innovation and changes in the way things get done.
In the public services arena, necessity doesn’t drive change in the same way. This is because the spending taps have either not been turned off for that long or, as currently after 10 years of austerity, have arguably been turned off for too long. Let me explain.
Public service managers act rationally. Historically, spending cuts have been temporary within the usual five-year election cycle. This means that the default response is salami slicing – implementing small incremental cost savings, avoiding making any potentially significant changes in the way things are done and reverting to ‘normal’ when spending taps are turned on again.
The period from 2010 to 2015 can be characterised in this way, with most managers hoping/expecting that the next government would relax austerity. Unfortunately for all of us, public finance conditions didn’t improve and austerity budgeting has continued up to now (late 2019).
So what effect did this have? On the ground, front line public services have consistently reduced scope to meet only acute or statutory needs e.g. qualification for social care support, and change comes about largely through closure of provision and services e.g. Sure Start, youth centres, elderly care day centres, libraries etc.
At the risk of oversimplification, after five years of salami slicing there was not enough capacity left to plan, consult on and implement significant services transformation. High staff turnover in times of low morale is another factor. There have, of course, been some changes such as joining up between local authority teams in for example children’s services. There has also been some innovative use of outcomes-based commissioning – something with which I have personally been involved.
However, these have been small scale. The overall picture is one of services that are hunkered down coping with day to day demands with only limited commissioning and back office support to help introduce any changes.
So what should we do now the taps are about to be turned on again? I have previously advocated three ideas for introducing change across the public services landscape.
Use an overarching theme – presumption of prevention – to drive change
For all public-sector organisations, I would argue for a presumption towards prevention as a sensible overarching hook or theme. Every organisation should be encouraged to ask:
“what would we spend this budget on if the aim was to prevent the problem arising or getting worse?”
One of the positive consequences of looking at a social challenge from a preventative basis is that it forces organisations to look at outcomes and work out how to collaborate with other spending bodies to find ways of combining resources differently to now. Equally importantly, it should be cheaper – but only if we can break the ‘safety first’ mindset of waiting until action is mandatory, and almost always much more expensive.
Explicitly invest in services R&D
If the answer in the private sector is R&D, why not the public sector too? One remedy could be to set an explicit Government services R&D budget allocation. If say 1% of Departmental expenditure were top-sliced and allocated to R&D, this would be around £3bn per annum aimed at improving public service innovation and productivity gains.
This would require a complete rethink of the way we test and implement change. Instead of scrutiny of policy initiatives after implementation with 20:20 hindsight, by the Public Accounts Committee, National Audit Office et al, we would be asking these or potentially different organisations to review an experimental spend and deciding whether to implement at scale.
Extend Individualisation and co-design
Essentially give service users a voice in designing the services they receive. Give them ownership of the budget and how it is spent. The ideas of personalisation and choice have been around for over 10 years now but they have not gone anywhere near far enough, with control of budgets remaining largely with government bodies.
With some imagination, this principle could and should be more widely encouraged and extended to areas such as employability and skills (especially re-training), management of long-term health conditions, and parental support.
Conclusion
If 2020 onwards is going to be a great opportunity for public services to invest in change and improve service outcomes then, whatever colour the new Government, it needs to set the change agenda from the centre and quite possibly reinforce it with legislation.
- August 5, 2019
Since he became Prime Minister Johnson’s chief advisor there has been much attention on the musings of Dominic Cummings. In one of his long and detailed blogs criticising Whitehall, he observes that:
“Whitehall …….is parochial about its own past. One of the most useful questions one can ask is not only ‘who has already solved this problem?’ but ‘have we already tried to do X and failed?’ In the DfE there is no system to answer this question reliably. Unless you get lucky with an old-timer, you cannot know and because they abolished their own library you can’t even go and study it.”
There is perhaps much to disagree with in Mr Cummings’ musings, but this strikes a chord. I have written before about the impact of lost institutional memory in the context of public sector productivity performance, and a couple of recent ‘lived experiences’ have prompted me to think further about this particular bugbear of mine.
It is perhaps a function of being 50-something years old that I am often by far the oldest person in the room – that old timer that Cummings writes about – and consequently have nearly always come across challenges that others appear to be encountering for the first time.
But it turns out it is not just a function of age – it’s a question of having any kind of institutional memory.
Lived experience #1:
At a recent meeting of around 30 commissioners and providers of children and young people’s (CYP) services, there was a presentation by a government policy lead which outlined what the policy team had found out over the preceding two years about effective CYP interventions. After around half-an-hour of discussion it emerged from the 30 or so professionals in the room that this two years of policy research and development had done little more than identify as best practice what everyone involved in youth work used to practice.
But as this kind of discretionary public expenditure had been cut back since 2008, much of this knowledge had been dissipated: there was no ‘institutional memory’ of youth work best practice and the policy team had to find it out all for themselves again. In fairness, the policy team were from a different Department of State to the one that led on youth work policy (and different again to the one that reduced local government spending on youth work) – but the effect of silos on cross-government learning is a whole other topic.
Lived experience #2:
Senior staff turnover at an organisation I have worked with for over five years means that I am one of only two members of the project team left with some ‘institutional memory’ of the detailed reasons why previous decisions were taken. In fact, and not unusually, both of us operate in external roles to the organisation and are the only ones providing any form of continuity.
What to do about it?
There is a huge amount of energy wasted when organisations find themselves having to invest time and resources re-learning lessons from before. Loss of institutional memory has to be a drag on productivity and innovation.
In my view, one of the keys is to ensure that there is a succession plan so that when staff move on from teams (usually through public sector promotion or role change), there is a successor who knows what’s what in that team or area of the organisation.
I call this my succession obsession and work with all my clients to ensure that they have identified individuals to develop and bring along as a way of ensuring at least some continuity.
Another good practice is to ensure that decisions are fully documented as projects and programmes progress. This is especially for when things go wrong as well as when they go right. Post implementation reviews are also an essential part of good project management and delivery but are often overlooked or done in only a cursory fashion – often because project teams have already moved on to the next challenge.
Finally, maybe part of the answer is to incentivise staff to stay in post longer and reduce some of the incentives to move so regularly in order to advance their careers. Would it be possible only to allow a staff move when they can apply what they have learnt elsewhere? In other words, when they start to become useful institutional memory themselves.
- July 31, 2019
If we lived in less turbulent political times, Labour’s new policy on insourcing of public services might have attracted more attention than it has. Promising an ‘insourcing revolution to end [the] “scandal” of public service outsourcing’ it was launched through an interview with John McDonnell on the Today programme and was picked up by the Guardian and a number of specialist journals. But the coverage did not seem to do justice to what would be a major change – and challenge – for local government.
The BBC presented the story as Shadow Chancellor McDonnell’s revenge for Margaret Thatcher’s introduction of compulsory competitive tendering (CCT) of local services in the 1980s, when he was a GLC Councillor. But that seems to underestimate the thinking behind this: the detailed policy document runs to more than 50 pages, and sets out in detail why Labour believes services should be delivered in house.
Although some coverage implied that Councils would be forced to move services in-house, the document does not say this. What is does say is that when a contract expires there will be a presumption that it will be insourced, unless the Council can satisfy 10 tests of everything from its contract management skills to whether the contract involves ‘significant contact with at-risk groups’. If it fails these tests it can still outsource for ‘good reason’ – notably because it lacks in-house capacity or because there is a case for separation of services from the Council. However the Council must in addition ensure that its contract and chosen provider meet nine further conditions relating to legislative compliance, treatment of workers and past contractor ‘behaviour’.
The document acknowledges that there is much detail to work through to implement this policy – to which one might retort: ‘not half!’. A sensible short-term reaction might be to wait and see – since even if a Labour government were elected, it would take some time for this policy to be enacted in legislation, and much longer for it to bite as current contracts expire.
But is worth essaying a couple of observations, one political and one practical. The political point is that while it may be a stretch to call this ‘McDonnell’s revenge’, it is undoubtedly ideological. The conclusion to the policy paper says
“Local government is a key site in the struggle to unwind neoliberal reforms and democratise the economy………And through insourcing there is an opportunity to reassert at the local level the value of the collective ownership that is the hallmark of a socialist society.”
But arguably what we learnt from the Thatcher CCT reforms is that it is a mistake to impose a top-down, ideological blueprint on local democratic decisions; and take a simplistic ‘four legs good, two legs bad’ approach to service delivery and transformation. It was wrong of Thatcher to assume the private sector would always be better than the public, and equally wrong for Labour to now assume the opposite. Moreover a criticism that has been levelled at all UK governments, of whatever persuasion, since at least the 1980s, is that there is far too much control from the centre, not too little. Does a new Labour government want to be the one to shift that imbalance further?
The practical point is that it may not work. As Labour’s own policy paper ironically points out, more than a decade of Thatcherite and then Majorite compulsion had limited effect, with over two thirds of forcibly tendered services still in-house in 1993. Yet in the two and a half decades since then, predominantly under a Labour government that removed much of that compulsion, outsourcing steadily increased, as Councils made (mostly) rational and well-informed decisions on what to keep in-house and what to outsource. If they got it wrong it was their decision, not Whitehall’s.
So will a metropolitan authority that has contracted with a charity to deliver specialist support to vulnerable young people, through a service that is deliberately arm’s length from its Children’s Services Department, want to insource that service? And will a small District Council that has long benefited from the global capability of a large IT provider, want to start recruiting its own programmers and arranging 24/7 IT help desk support?
Either there will be much wriggle room in Labour’s legislative reforms, so those wanting to outsource will likely jump through the newly imposed hoops and carry on as before (and possibly extend their existing contracts by a few years before legislation is passed). Or the new regime will be more restrictive than it first appears, in which case many local officers, and I suspect many of their councillors, will end up being forced to make decisions that they do not necessarily believe to be in their best interests.
- July 22, 2014
When you are as old as I am, certain things start to come around again, and I am reminded how little there is that is genuinely new or untried in the realm of public sector service provision.
For example, as ATQ has blogged about before, Payment by Results was first tried in schools during Victorian times, which is before even my grandparent’s era.
My latest sense of déjà vu came this weekend when I read how Labour is likely to propose that public sector organisations should be allowed to freely compete and bid to deliver services – taking the model of the East Coast mainline train operator as an exemplar.
This reminded me of compulsory and voluntary competitive tendering (in local government) and market testing (in central government) which were used in the late 1980s/early 1990s as a way of using a competitive tender process to try and drive efficiencies and reform. The idea was for in-house teams to compete for the services that they were currently delivering. In this way, it forced an assessment of inputs vs outputs, how costs of services were made up and where changes could be made in working patterns and processes and so forth.
In local government competitive tendering was often a Thatcherite stick with which to beat left-wing Councils; while in many central government Departments, market testing was often a somewhat artificial process where the in-house team was never going to be replaced by a new provider and little benefit was derived. However, in some Departments and particularly in local government white and blue collar services, these processes led to noted improvements in in-house provision, and/or the outsourcing of services including through privatisation following management buy-outs. As a result, competitive tendering and market testing in many ways, set the public services industry ball rolling.
The world has moved on since then but similar exercises have taken place and are still underway. In 2010 and 2011, the NHS ‘right to request’ and ‘right to provide’ processes created new social enterprises for delivery of health services by previously in-house teams – which will have to compete for their ‘dowry’ contracts after five years. According to the Department of Health some 40 services and 20,000 staff are now operating in such social enterprises. The creation of these new providers was highlighted as a factor in the growing proportion of services provided by non-NHS organisations in Nuffield Trusts recent (July 2014) report. http://www.nuffieldtrust.org.uk/publications/red-state-nhs-finances
The political philosophy arguments about use of non-public sector organisations in the delivery of public services remains a constant and has, over time, clearly influenced what type of organisation will win a contract award e.g. the increasing desire to make full use of the VCSE provider base. However, the underlying idea of ‘market testing’ is the same as it ever was.
- January 15, 2014
Now that we are in a New Year, it’s apparent that both government and opposition are already thinking about the next election, and starting to make policy announcements and commitments. For those of us who are focused on the world of government commissioning and contracting, one of the intriguing aspects of the next election is what an incoming government (if different) will do about this government’s major contracts for the delivery of public services.
Contracts which straddle governments are nothing new, of course, but what has changed is the type of contracts and the extent to which they impinge directly on policy. While the outsourcing of any service can be controversial, in general few people tend to get too worked up these days about a contract for the delivery of back office support processes or information technology. A new government will almost certainly continue such contracts largely unchanged, at least until the contract ends or reaches a suitable break point.
But in recent years, we have started to see governments use the private and third sectors to deliver social policies which a new government may want to change radically, or discontinue altogether. The two obvious and large areas where this may be the case in 2015 are employability support and offender rehabilitation. A brief look at both these areas shows some of the tricky dilemmas that are likely to arise for both the current government and the opposition.
To take employability first, the use of external contractors to deliver policy in this area is long established, and we have already seen what can happen to contracts after a change of government. When the new government entered power in May 2010, it implemented the Conservative’s proposals for the Work Programme. Since this was effectively an extension – to more client groups and with a larger role for external providers – of the Labour government’s Flexible New Deal (FnD), the policy was in the same “direction of travel”, as the saying goes. But even so, all the existing contracts had to be terminated and an entirely new procurement process started. So there was a significant cost – in both time and money – to put in place a very similar set of policy tools.
Since then the Work Programme has been heavily criticised by the opposition, and it can hardly leave it in place and untouched if elected. But the cost of contract termination means that it may well continue the Programme at least until current contracts expire in March 2016 – although it will need to make clear its intentions well before that.
Offender rehabilitation is different, because there is no cross-party history of using external providers in this sector on a large scale. The previous government dabbled in this area, but had little in place by way of contracted out provision. In opposition the Labour Party seems to be broadly in favour of policies to reduce reoffending and rehabilitate offenders, but is strongly opposed to the means this government has adopted to achieve it, through its Transforming Rehabilitation proposals, which involve a mixed economy of public, private and voluntary sector provision that effectively outsources much of the current Probation Service.
So both government and opposition have big challenges ahead. The government plans to have Transforming Rehabilitation contracts in place by April 2015, and knows that, with the next election fixed for May of the same year, it cannot afford any delay. If contracts are not in place, it will be easier (though by no means painless) for a new government to reverse or significantly modify the policy.
However the opposition also has difficult issues to wrestle with. If the government does meet its timetable, new Labour Ministers will have to decide whether they want to incur another large bill for contract termination, or can live with and try to modify the contracts to meet their policy objectives. And as the election looms Labour will come under pressure to set out clearly what its policy is in this area – in a way that it probably would not have to do if private and third sector providers – and their investors – were not gearing up to deliver services.
In the longer term and if (as seems likely) the use of external providers in complex policy areas continues and grows, there are some bigger questions for government as a whole about how we avoid undermining the democratic process. Politicians will rightly complain if their ability to change policy which is contentious is unduly constrained by the decisions of predecessors effectively to outsource delivery of said policy. But those who are being asked to invest heavily in new provision – whether as providers or financiers – will be very reluctant to do so if there is no guarantee of continuity beyond each election cycle. Some may say of the latter “so be it and good riddance” but most will not.
What may happen is one of two things, or possibly both. First, more contracts will be awarded that are coterminous with general elections – something made easier if we stick with fixed five year terms. The second is that all parties will have to seek broader consensus on policy and the means to deliver it, before major programmes of service delivery outside the public sector are implemented. This may be no bad thing, and has some precedent in our approach to major infrastructure projects, such as the 2012 Olympics and, more recently, HS2. However since some in the Labour Party have been making noises about withdrawing support for HS2, a project which they first proposed, the auguries for the development of such consensus may not be that encouraging.
- November 6, 2013
One of the challenges for turning ideas into actions is sourcing the funding and financing of innovative programmes designed to test new ways of doing things. Edward Hickman FRSA argues that this challenge is most acute in the sphere of public services.
http://comment.rsablogs.org.uk/2013/11/05/social-investment-public-services-reform