Now that the Localism Act has received royal assent, there are some challenging issues for public service providers to resolve before it takes effect fully in April 2012.
If public leaders are to be less shackled by bureaucracy and free to operate within broad priorities, what guarantees their integrity? Many managers interpret the imperative to ‘do it cheaper’ as accepting the lowest quote. How many public servants are geared up for the challenge of squeezing the public pound without undermining quality, compromising dignity, marginalizing communities or reducing employment to unsafe levels?
In the delivery of public services, 2011-style localism presents innate conflicts between efficiency and local benefit. GP commissioning groups will be expected to possess commercial skills when negotiating contracts with multi-nationals whilst also delivering on the government’s intention to deliver more services through social enterprise and mutuals in localities.
The dilemma for public leaders and managers is new. On the one had they are charged with exercising sophisticated judgement on commercial issues to an extent even the most hard-headed commissioners have not done before. It’s likely that all organisations with a public function will have an element of trading and services will have to go beyond the current value for money consideration to demonstrate how actual money will change hands and how surpluses will be generated.
On the other hand, the leaning towards social enterprise requires managers to maximise local benefit, where gross value added is only one marker of success, and profits (both monetary and intangible profits such as community pride and well-being) are enjoyed – literally – by local people. This could well contradict the Tesco-style public services utilizing sophisticated decision making and strategic focus provided by G4S, Serco, Capita and the other big boys. Social enterprises contribute £24 billion to the economy and employ 800,000 people but the sector’s capacity is tiny in relation to the £80 billion annual public procurement bill, and a degree of handholding by commissioners is inevitable if services are to be outsourced in this direction.
Either way, delegating the public service function through commissioning demands a depth of judgement which local government officers and civil servants have not previously had to display. Their knowledge of governance structures and ability to scrutinize effectively will be put to the test in the context of workforce reductions leaving a moth-eaten fabric of corporate competence in town halls which can only be repaired in the fullness of time – time which we haven’t got as the recession descends into its second dip.
As a hospital trust board member, I heard much reference to the ‘democratic deficit’ of boards whose members were appointees rather than elected by public mandate. The gap widened with the establishment of NHS Foundation Trusts and scrutiny mechanisms became weaker, despite ‘involvement’ becoming a buzz word in government circles.
Outsourcing public services begs questions about control, propriety and profit. G4S is a FTSE-100 company, the world’s second-largest private sector employer with 625,000 staff, whose over-arching duty is to make profit for its shareholders. It is charged with tackling worklessness in three English regions, delivered through a complex web of brokers and ‘knowledge bank’ agencies. In Greater Manchester, there are nine job brokers and 88 knowledge providers, each with their own leadership, decision making and governance structures.
Services are vulnerable to disruption due to lack of skilled procurement officers. Due diligence for TUPE had not begun weeks before handover of a NHS contract for an addiction service. In Liverpool a halt to child cycle training hit the headlines while two companies “argued” over contract handover. Patients and children had no recourse; they just didn’t get their service.
It’s people, skilled and supported people, diverse people, people who understand ordinary lives who will exercise better judgement and commercially-aware management. People, not systems or machines. But people also need regular servicing, planned overhauls and daily maintenance checks. Just as it’s dangerous to drive with bald tyres, it’s madness to vest major decisions in leaders and senior managers who have no access to coaching and peer appraisal towards the new skillset.
Public leaders at all levels now need a battlefield and balcony mentality – focusing on the important stuff with an overview of the implications. This is more than issuing staff with the corporate values. It’s leading from the top by visibly acting out the priorities and relationships which will lead to constructive places.
