In July 2011, the government published its Open Public Services White Paper, which set out a number of policies for the modernisation of public services.
In this post, Practical Law Public Sector takes a light-hearted look at the principles behind the White Paper, how they have been translated into policy, and the effects of those policies, in particular on lawyers in local government.
The Open Public Services White Paper bases its agenda for the modernisation of public services on five principles:
- Choice. People should be in control of the services they use, for example, through direct payments, personal budgets or exercising choice in other ways. Where people cannot be given direct control over services, elected representatives should have more choice over who provides services and how.
- Decentralisation. Power should be decentralised to the lowest appropriate level, including to community groups and neighbourhood councils.
- Diversity. Public services should be delivered by a range of providers competing to offer a better service.
- Fairness. Central government will provide assistance to the disadvantaged to facilitate access to services and improve outcomes, for example through the Pupil Premium.
- Accountability. The provision of public services must incorporate mechanisms to enable citizens and their elected representatives to hold providers of public services to account, for example, through choice, transparency and voice.
How have these aspirations translated into reality?
A number of successful outcomes have been achieved on the back of these principles:
- Powers. The introduction of the general power of competence for local authorities in England has had an important effect on officers’ confidence to consider innovative projects (see Practice note, Localism Act 2011: the general power of competence). While many of these projects were undoubtedly possible under the replaced well-being power (still available for Welsh authorities), its perceived limits, particularly following the LAML litigation meant it was treated with unnecessary caution. In August 2013, the Local Government Association published a paper on the use of the power and how it has benefited communities in ways envisaged by the White Paper.
- Data. The focus on transparency in public services, particularly in spend data, has exposed some glaring examples of waste and poor purchasing. It has also highlighted where private sector suppliers have performed poorly and acted in ways contrary to the public interest, for example, failing to pay UK tax. At the root of transparency, is the need for reliable data. The government has promoted existing data sets and established new ones across a range of public services to underpin choice, for example, in relation to NHS services and schools, as well as benchmarking outcomes for performance analysis (see, Opinion, Managing suppliers to central government: NAO reports on how new government initiatives are delivering savings and leading to greater transparency).
- Procurement. The ambitious programme to develop procurement skills across the public sector, but particularly in central government and the NHS, together with the NHS procurement regulations, looks set to transform the field of public contracts which has been plagued by monolithic and open-ended arrangements and repeat contracting with little regard for value for money. The requirement on public bodies to publish spend data, and the development of portals for advertising public contracts is a welcome step in opening up public services to a wider supplier base, particularly SMEs.
- NHS. While the reforms introduced under the Health and Social Care Act 2012 remain controversial, the dissolution of the PCTs and the transfer of commissioning decisions to GP practices, and of responsibility for public health to local authorities, are profound examples of decision-making moving closer to communities and becoming more accountable. (See Practice note, Health and Social Care Act 2012: key powers and duties.)
What’s been the impact on local authority lawyers?
The most obvious manifestations of the policies emerging from the Open Public Services White Paper, coupled with the wider public spending cuts, for local authority lawyers, are:
- Academies programme. According to the DfE, there are 3,850 open academies, and almost as many in the pipeline. The cited advantages are the ability to set pay and conditions for staff, and not having to follow the national curriculum. It is unclear why the government does not simply extend these freedoms to all schools. But the real incentive for schools to convert is financial, notably, a proportion of the funding which is retained by local authorities as part of a pooled fund for all maintained schools, a slice of money which it makes sense to hold on to if the school is big enough not to need safety in numbers. It is unclear why changing the governance structure of a school to involve an external organisation in place of the local education authority increases standards or promotes choice in itself.
Local authority lawyers have been involved in the conversion process, for example by transferring land and assets, and continue to provide advice to academy schools.
- Community rights. The Localism Act 2011 heralded the introduction of a number of significant community rights, such as the right to bid for assets of community value, providing local groups with the opportunity to retain buildings that are used for community services (see Practice note, Localism Act 2011: assets of community value). The community right to challenge confers on community groups, and local authority employees, the right to bid to take over and run public services, if they are successful following an appropriate procurement exercise (see, Practice note, Localism Act 2011: community right to challenge.)
Local authority lawyers are advising on land transfers, procurement exercises, support for employee enterprises and staffing issues.
- Outsourcing and procurement. The drive for outsourcing has increased with more focus on agile, lean procurement methods which facilitate the participation of SMEs and reflect more complex partnering arrangements. Contracts have become more demanding; commissioning for innovation and achieved outcomes, rather than a steady state.
Local authority lawyers are at the forefront of this area of work.
But is it all good news?
In spite of the successes arising from the White Paper, some conflicts remain:
Has the government really decentralised funding and delivery of public services to “give local councils more freedom to innovate in the services they control”? The spending cuts have been a double-edged sword; adversity encourages innovation as councils struggle to devise ways of making a little go further, but it also significantly restricts the opportunity for investment in longer-term outcomes. The minimal finding available through the Troubled Families programme, cited as an example of such devolved funding, limits what it can achieve.
Are academies and free schools any better? Do academies provide more choice, and better parental engagement than maintained schools? Many are run by national players with few community ties. They are accountable to central government, rather than to local councillors. The benefit to converting to academy status is financial, but it’s only the larger schools that really benefit from receiving their share of the schools’ maintenance pot, rather than benefiting from pooled funding held by the local education authority. If schools need more freedom in the curriculum and with employment practices, why can’t this be extended to all schools? Furthermore, 59 academies (admittedly a small proportion of the total number) are in receipt of pre-warning or warning notices from the DfE about poor performance (see Letters to academies about poor performance).
Are “staff mutuals” any better than traditional outsourcing? If the aim of the community right to challenge is about community empowerment, it is difficult to see how this is necessarily achieved through setting up a commercial entity which happens to involve its employees in its management. It is unclear at this stage whether the investment in supporting these bodies is proportionate to the outcomes in terms of improvement in service provision.
The much-lauded “payment by results” contracts are problematic and it is unclear whether using these outcomes-based payment systems incentivises the right behaviour within the limited budgets provided, for example in the fields of offender management, welfare to work and troubled families. However, a focus on commissioning for outcomes must be welcome, and it is interesting to see social investment at work through the Social Impact Bond model (see Practice note, Social impact bonds).
So how does the government rate its progress?
In March 2014, the government published an update on its progress in the last year on the open public services agenda. A similar report was produced for 2012-13. The reports provide a snapshot of the initiatives touched on above. While the government can take credit for many successes, the contradictions remain. In the push for choice, and innovation, the most important area is perhaps the one which remains most fragile: fairness. To enable people to be lifted out of disadvantage requires money. And public money has been cut. Innovation can only go so far. However you tinker with the payment mechanisms for public services and invite more organisations to tender for public contracts, a reduction in resources will, in many cases, still result in a lack of crucial services.