Public Service Reform: Is the Coalition failing to learn from Labour’s mistakes?

In 2003, Tony Blair gave a speech to the Fabian Society on the subject of public sector reform.  He argued that after years of Tory underfunding and privatisation, Labour had – and would continue – to reform public services to make them work for a modern society.  The speech was largely spin and guile (he promised not to throw money at the problem, and then went on to boast how much more they were spending on staff salaries), but it had symbolic value, setting the subject of public service reform firmly on the agenda, and identifying it as one of his government’s main aims.

Labour’s programme of public service reform was substantial: it included the establishment of the Financial Services Authority, with Lord Turner at its head (albeit on a part-time basis – he also held a position in the upper echelons of Barclays bank, which was itself subject to FSA regulation), largely derided as toothless even before the financial crisis.  They also had the infamous NHS IT project, eventually abandoned with billions wasted.  And then there were the disastrous private finance initiatives.

It is not surprising, then, that when David Cameron in January 2011 delivered a speech promoting the Coalition’s programme of public service reform, even he anticipated a degree of eye-rolling.  Not least from Oxford academic Professor Christopher Hood, who told a Parliamentary Select Committee in 2008 that successive governments have suffered from ‘[public] service reform syndrome’.  Symptoms include a great deal of hype for reform, followed shortly after by what he calls ‘attention deficit syndrome at the top, so that we do not get follow through and we do not get continuity’.

There may well have been outbreak in the Department for Work and Pensions, where Iain Duncan-Smith’s Universal Credit reforms are running into choppy waters.  The National Audit Office’s recent damming report identified one (among many) flaw that is particularly embarrassing for the Conservatives: the new system may be more, not less, vulnerable to benefit fraud.  Mr Duncan-Smith has blamed the civil servants who are designing and implementing the system, who in turn blame ministers.  In defence of all involved, the task of combining six benefits (jobseeker’s allowance, employment support allowance, housing benefit, working tax credit, income support and child tax credit) into one monthly payment, administered through one central IT system is quite an undertaking.

But one of the key lessons from the Labour era is that reform must be incremental.  The more successful attempts at public service reform during Labour’s time in office were not attempts to re-invent the wheel, but built on existing best practice.  Network Rail in the mid-2000s successfully reformed the way it carries out its key responsibility of maintaining the UK’s railway infrastructure.  It noticed that contracting-out repair and upgrade jobs to third parties was not only more expensive than having in-house engineers, but that by having in-house engineers who were specialised in railway engineering, the quality of work carried out would be better, and so they phased out using third parties.  This was a gradual reform that was properly administered, followed through, and based on evidence, built on previous successes.

Another lesson from Labour’s time in office is that public service reform can only be successful when stakeholders are on-board.  The Education Secretary risks learning this lesson the hard way.  High standards in education cannot be achieved or maintained when teacher morale is at an all-time low, as a YouGov poll in January reported it.  The row between ministers and civil servants in Mr Duncan-Smith’s department is also a recipe for another botched reform.

Public service reform is notoriously tricky and difficult, and no more so than when a government attempts to reform its own means for implementing reforms, that is, reforming the civil service.  Francis Maude wants to make the service ‘smaller, pacier, flatter, more digital, more accountable for effective implementation… [and] more unified, consistent and corporate’.  This is in spite of the independent reports commissioned by the National Audit Office which have since 2008 repeatedly stressed two things that should make him think twice.  Firstly, the UK’s civil service compares favourably in terms of performance in key areas to even the world leaders (Sweden, New Zealand and Canada), and secondly that when it comes to public services in general, there is a significant discrepancy between the public’s perception of how well they perform, and how well they actually do perform.  This latter conclusion suggests that the need for some reforms may be more a matter of perception than reality.

Not only does this being into question the necessity of Mr Maude’s (and more generally this government’s) proposed reforms, but they have putatively failed to learn the lessons of the Labour era.  His ‘shake-up’ will not build on existing successes, but is rather a strategy that, as he put it, ‘has often been tried.  Far too rarely has it worked, but we are going to have another go’.  This could be a mantra for most of this government’s attempts at public service reform.  In a time of tight budgets, there are tough questions that need answering.  But this government’s approach to public service reform is unlikely to provide successful answers in the short or long-terms.  Botched reforms not only let down the people who rely on public services, but they are costly.  (According to some, Labour’s failed IT project cost around £12bn.)  Not only can the government ill-afford more failed reforms financially, they also have little political capital to spend here.  If this government does not learn the lessons of Labour’s troubled attempts at reform, it risks earning the same reputation for waste and incompetence that dogged the last years of Blair’s premiership.

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Categories: Global Political Insight, Opinion

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