Suffolk Council’s plans to outsource all services to third parties is no doubt a well intentioned attempt to reduce cost and improve efficiency in line with the coalition’s Big Society concept. However, public servants will recognise a real danger. The best intentions of those who are charged with producing an effective contract specification, but who are removed from front line contact, can result in a more inefficient and less effective system. A tendency towards over-specification and a lack of trust in front line deliverers, leads to the leaching out of the “life” of a service and of a service manager’s ability to make cross-functional connections.
Suffolk’s approach can work but it requires a different mindset from the start. The wider public sector is learning that the best and cheapest services are delivered by flexible front line professionals, with a strong commitment to their professional standards supported by enabling managers. The key question for Suffolk, if it wants effective and low cost services, is therefore principally about how it creates the conditions in which such an approach can flourish. This is also the question for public services as a whole.
The answers to that question are not shaped by an outsourcing ideology. The answers are concerned with stripping out the ineffective control orthodoxy which results in too many targets, too much reporting, and a management hierarchy. They are concerned with finding alternative quality assurance methodologies – including, for instance, transparent peer review – and turning managers into out-of-the-office front line enablers.
They do also include working out the governance and ownership structures which would underpin this approach – but this is the main point: that form follows function. There is no one right answer. Neither keeping services in house, outsourcing to a social enterprise or not-for-profit, nor commissioning a private sector body is the right solution in all cases. And not all quangos should be set on the bonfire. In the real world, all these options could be considered for all the public services under review. The choice of approach should be determined by two factors. The first is relationships and the second is change. The relationship questions are: which governance structure best enables us to strengthen the key relationships of this service – with customers, with our best professionals, and with key partners? And which structure best enables us to move on from the relationships which hold us back – with poor quality staff and managers, with self-serving pressure groups, with purveyors of ineffective orthodoxies? The change questions are: who shares our vision and has the enterprise and energy to drive it through? What structure would give them the support and incentives to which they would respond well? And how do we manage the transition in a way which minimizes disruption?
This last point is critical and is too often overlooked. It is, of course, partly about employment and the message sent to the economy as a whole if statements are made concerning radical changes which appear to threaten large numbers of jobs. In practice, outsourcing alone is rarely about huge numbers of redundancies (how can it be? – someone still has to deliver the service), but it looks like it is. And perception knocks confidence and in turn knocks the local economy. A radical announcement in response to concerns about economic trends can actually lead to the negative outcome we wish to avoid.
There is a deeper point about what the public sector is for. If we see public service as a vast machinery, churning out a variety of interventions, we will inevitably see management as being about control; and see the improvement and change process as being concerned with rapid re-engineering. But if we recognise the reality – that the best public services happen only when there are strong relationships in place between client and professional, and across professional disciplines – then we must also see that the machine management analogy is simply counter-productive. The hard truth about this “soft” reality is that centrally driven change programmes, such as wholesale outsourcing, can fundamentally undermine the trust and wisdom on which good public services are based. Committed public servants become demoralised or distorted. To quote from Nockford’s Leviathan, “treat me like machinery, I might just act like a hammer”. This effect can be observed in any such “systematic” approach to change, not only via an outsourcing initiative. Since the new service model will be delivered by substantially the same people who are currently in post, maintaining their key “soft“ assets (including relationships and sense of self-worth) is every bit as important as is the shape and ownership of the new arrangement. Your apple tree might look better in your neighbour’s garden, but you had better be careful with its roots when you dig it up.
The private sector can be an imaginative and innovative partner for public service delivery. Its focus on the bottom line means that the best businesses have learnt the lessons most public sector organisations would do well to copy: the avoidance status-oriented management structures; the importance of flexibility at the customer interface; and the need for continual redesign of the service itself. But these benefits do not come automatically. Indeed, many public sector commissioners of outsourcing have found (for instance, in IT, or in PFI) that their own desire for a detailed contract specification at the outset has tied them in to inflexible and inefficient service models. A tightly specified service now can be an inefficient model in two years time.
Part of the answer may well be outsourcing but it is unlikely to be the whole answer. My fear is, as time passes and the gap grows between those who buy and those who know what the customers need, the approach will breed a whole new set of problems; producing increased costs and a devaluation of service levels to citizens.