- November 12, 2014
An article in the Guardian today (12th November 2014) caught my eye – margaret-hodge-southwark-health-social-care It was about Margaret Hodge MP, who chairs the Public Accounts Committee (PAC) and whose sometimes theatrical excoriation of both public and private sector managers has attracted much comment.
Now she is taking on the challenge of overseeing the implementation of changes in public services herself. She has started in the role of chair of the London Borough of Southwark’s “early action committee”. Its purpose is to re-organise services so as to intervene earlier and prevent social issues escalating and becoming more expensive to deal with later on.
As we know well from our social investment work and have commented on before, everyone agrees that this is the sensible approach to social inclusion problems but it has always proven very difficult to deliver – not least because in tightened times, budgets get drawn entirely into statutory provision leaving little or nothing spare for preventive work.
The article is pretty balanced and Mrs Hodge does of course, as the Guardian observes, have direct experience as a former leader of Islington Council – albeit nearly 30 years ago. So like the Guardian, I will watch with interest what lessons she learns from trying to lead a change herself rather than, along with her fellow PAC members, telling others what they think should have been done with the benefit of 20:20 hindsight.
- November 14, 2012
Listening to two of the authors of the joint Fiscal Fallout report – Ian Mulheirn and Ben Lucas – at the RSA prompted a couple of observations.
The format of the event is deliberately kept to one hour and, to my perception, around 55 of the 60 minutes available were taken up with an admirable and entirely familiar analysis of the problems facing any Government trying to implement reforms whatever the fiscal climate. Some examples being:
- too much centralisation in the UK without enough local or city region decision input let alone autonomy;
- inability to overcome long held silo mentalities and cultures in addressing complex social problems;
- poor commissioning skills and accountability structures that hinder any innovation;
- no service design skills anywhere in Whitehall and few in local government;
The list is longer and the challenge appears so overwhelming that any solutions proffered in the 5 minutes when they were discussed effectively defaulted to arguing for wholesale change with an “I wouldn’t start from here if I were you” at their heart.
Despite these observations on the presentation session, I recommend reading the report as it at least tries to set the challenges in a framework that breaks it into more accessible chunks – what the report calls “Pillars of a Social Productivity Spending Review” (how think-tanky is that?)
One of the themes within the Pillars is to “Commission for Social and Economic Value”. This theme is of great interest to me and my colleagues, particularly the use of public sector commissioning to foster greater public service innovation. We have written on this topic before
To my mind, commissioning practices designed to allow for service innovation is one area that actually can be addressed as a point solution within the overall challenge. It doesn’t need every other part of the answer to be in place first – just some imagination and vision.
- November 8, 2012
The procurement of public services from the private sector was back in the news today, with the publication of a report by the National Audit Office (NAO) into the selection of Circle Health to run Hinchingbrooke Hospital (or more accurately, hold a ten year operating franchise for Hinchingbrooke Health Care NHS Trust). I have to declare a personal interest here, since I live in Cambridgeshire and Hinchingbrooke is my local hospital.
The report lead to a brief item on the Today programme (you can hear it here at 1.12.05) between the seemingly ubiquitous Chair of the Public Accounts Committee, Margaret Hodge MP, and the co-founder of Circle health, Ali Parsa. To my surprise, on this occasion I found myself partly agreeing with both of them.
Mrs Hodge argued that the commissioners of services could not simply take it on trust that a provider could deliver the services for the price they had bid, even when that price requires unprecedented savings, on the basis that the risk of failure lies with the provider. The franchise is effectively a payment by results contract, since Circle will earn no money over the ten-year life of the franchise, unless the Trust achieves a surplus under its management.
But that it makes it more important, not less, that the risks of failure are fully assessed and commissioners take a realistic view of what can be achieved. Because if the costs of failure are high, the risk is also high that the provider will walk away from the contract if they cannot deliver it. Whatever the contract terms, a provider can walk away and is quite likely to do so if the costs of continuing (financial and reputational) outweigh the benefits.
This is not a new problem, but it is becoming ever more important as contracts get bigger, more complex and require more risk taking by providers. We have just written a more considered piece on this issue which you can read here.
But my sympathies lay with Mr Parsa when he argued that it was too early to judge that Circle will fail to deliver on the franchise agreement. The BBC’s opening to the story was that Circle have “failed to cut the deficit” (after six months!), and Mrs Hodge argued that although it was “early days” if they were not taking the “low hanging fruit” then there must be concerns about the viability of savings in the longer term”
But as Mr Parsa argued, this was a bit like judging whether Mo Farah would win the 10,000m after the first 1,000, and it may be that the low hanging fruit are higher up the tree than anyone thought. It is true that the contract is behind schedule in financial terms, but most providers will tell you that the early months of a contract are often the worst, when they have to cope both with the transition to the new contract and with conditions on the ground that do not always reflect what they thought was the case – however good their due diligence.
The NAO could of course reasonably argue that their report is about how risks are assessed in awarding franchises and contracts of this kind, not about whether the contract will ultimately succeed – indeed they conclude that “we have concerns about the winning bid for the franchise because most of the projected savings occur in the later years of the contract [my italics], and about how the risks associated with this were taken into account in the contract award decision.”
But Mrs Hodge seemed to be making a broader judgment on my radio this morning, as are the media, and I thought Mr Parsa was right to argue that, to mis-quote Zhou Enlai, it was “too early to say”.
However we are not as a nation noted for our patience in judging whether a new policy or project is working, as any politician or policy maker will tell you.