Government to open up public services

The coalition government talks at length about opening up government, creating increased competition and reform in public services. The intention is to achieve high quality public services for all, with more choice, competition and local control; all at reduced cost. Of course translating political invective into law is always rather trickier, especially when it tangles with European law in terms of procurement, TUPE etc.

In order to have any chance of achieving this it will need to tackle the fundamental barriers to reform, for example aspects such as:

  • The Cabinet Office Statement of Practice 2000
  • TUPE
  • The Fair Deal on Pensions
  • Procurement.

The Government has been busy consulting on these aspects in recent months but has not yet made it clear whether it intends to abolish any or all of these barriers.

The Open Public Services White Paper (the paper), in many respects, simply reiterates previous announcements and consultations that are already underway. There is not much here that is truly fresh or new. The Government's proposals for change are grouped under the following five key principles/aims:

  • Choice - To put people in control of the services they use, either through direct payments, personal budgets, entitlements or increased choices
  • Decentralisation - The aim is to decentralise power to the lowest appropriate level
  • Diversity - The aim is to open up public services provision to a wide range of providers
  • Fairness - The aim is fair access to public services and fair funding for all; to make opportunity more equal and tackle inefficiencies
  • Accountability - Providers of public services should be accountable to users and taxpayers.

Scope

The scope of the paper is UK wide, but in Scotland, Wales and Northern Ireland it is intended that the devolved administrations will determine their own approach to public services reforms, in devolved areas of policy. These would generally be services such as health, education and local government services.

Significant proposals

Choice - a new legally enforceable "right to choice"

Wherever possible choice will be increased by giving people direct control over the services they use. We have already seen changes to the way funding of services works, for example for funding to follow the student in education and the patient in the NHS and also the move towards personal budgets. Nothing is said about the costs of providing this additional choice.

Decentralisation - neighbourhood councils, the Localism Bill and more

The proposals aim to decentralise power to the lowest appropriate level - wherever possible to the individuals who use the service, or a representative body such as a community group or neighbourhood council, or a local authority rather than central government. Services might be provided directly, for example a parish council taking over a library. Alternatively they might be commissioned, for example a local council using new public health powers to pay a social enterprise to help cut local obesity rates on a payment by results basis.

Much of this is of course already included within the Localism Bill and it is difficult to see what is truly new here.

Diversity of provision of services - the "right to provide"

The stated aim here is to open up the majority of public services provision, moving away from public sector monopolies to a range of new and innovative providers of different sizes and sectors. Encompassing voluntary, community, private or new style public service mutuals, these providers will all compete to offer a better service and raise standards.

Areas such as national security, emergency healthcare and the judiciary are unlikely to be included, but in most other cases (such as local authority health services, schools, libraries and parks) there will be an open framework and increased competition. The onus will be on the authority to justify retaining any monopoly services. Again much of this is not new and it is not clear whether the Government has considered the possible impact of EU procurement rules during this process.

Removal of barriers

In the paper the Government summarises its position on breaking down the barriers to new provision in order to level the playing field and facilitate competition, for example:

  • TUPE - The costs and burdens associated with the TUPE regulations are frequently cited as a barrier for independent providers to take on state run services. The Government has said it will encourage public services commissioners to disclose TUPE liabilities at an early stage to help with this. However, the TUPE provisions are also currently part of the Red Tape review and the Department for Business, Innovation and Skills is carrying out a review of employment regulations to ensure they are working effectively. The Two Tier code has been scrapped, but there may be further consultation on a voluntary code.
  • Pensions: The fair deal - Again the requirements to provide equivalent pension provision can be seen as a barrier to smaller providers. Following the Hutton report a consultation on this has recently ended and a report is expected later this year.

The Government needs to make its position on these potentially very significant reforms clear.

Other proposed reforms

Procurement

New entrants are to be encouraged and helped to bid for work by reducing the emphasis on prior experience and track record. Also, this will be aided by possibly introducing transparent pricing to help diversify provision and ensure that competition is based on quality rather than price. There is also to be a new right of appeal to an independent figure or organisation where a provider feels it has been unfairly excluded from a competition process.

Pre-qualification Questionnaires

The proposals seek to eliminate pre-qualification questionnaires for all central government procurements under £100,000 and in other cases to reduce the burden and move towards greater use of the "open procedure".

"Any qualified provider"

There is a commitment to continuing the "any qualified provider" programme in the NHS - to judge on the quality of service not the type of provider - which will be phased in to services covered by tariff pricing starting in 2012.

Accelerated digitisation

Increased use of technology is to be considered to facilitate public services provision. Possibly also a "quality mark" in public sector delivery.

Accountability

Increased transparency and data

Local authorities already publish significant amounts of data, for example details of all spending items over £500. The Government is now considering widening the scope of services required to publish their spending items to cover other public agencies working at a local level. A recent example of this in action is the consultation on extending the scope of the Freedom of Information Act to, for example, Housing Associations as discussed in an earlier alert. There are also plans to improve the quality and usability of data provided, but to reduce the burden of collecting it.

Regulation and an enhanced role for Ombudsmen

Accountability is a major theme of the paper, ranging from potentially increased powers of ombudsmen, to a new form of maladministration for failure to provide "choice" and increased transparency.

There will also be steps to set "floor" standards and increased regulation, transparency and accountability for any providers of services that receive public money. Procedures and continuity regimes will need to be put in place to deal with failure.

There is much yet to be decided and to be done. Translating these wide ranging ideas into law and providing practical guidance for those wishing to enter this very complex territory and run services will not be straight forward. The success of the reforms will also depend on people wanting to take up the challenge, new types of funding becoming available and the removal of barriers to change.

See our action points for a summary of some of the practical steps to consider.