13 March 2009
Working together paper sets out the government’s vision for public services in harder economic times
By Tash Shifrin
The state could ‘withdraw altogether’ from some public service areas, the government said as it set out a revised vision for the public sector during the recession.
It came as experts issued yet more grim economic warnings – and on the day that a survey by the National Endowment for Science, Technology and the Arts (Nesta) revealed that public sector managers feared the collapse of their services unless radical action was taken.
A government paper, Working together, published on March 10, restated regular ministerial mantras, including the need for greater personalisation of services and more flexibility for frontline staff.
It included milestones to be achieved in public services for 2009 and the headline initiatives of fast-tracking trainee teachers and allowing patients to rate GPs online.
But it also signalled a slimmed-down role for the state in future. ‘At a time of global recession, as government increases its role in meeting new economic challenges, so too will there be some areas where it will play its role best by being less hands-on or by withdrawing altogether,’ it said.
But Cabinet Office minister Liam Byrne was unable to say this week which areas the state might pull out of, telling Public Finance: ‘That is something we’ll have more to say on in the Budget. The chancellor will set out those thoughts and ideas.’
Byrne also sounded a cautious note, saying: ‘I’m not sure you can deliver people genuine choice by ending all state provision. We’re very lucky in this country that, overwhelmingly, state provision is world class. I don’t think you’d want to reverse out of that. I think you’d want to keep that, strengthen it.’
In Gordon Brown’s foreword to the document, the prime minister emphasised the effect of the economic downturn. ‘The present financial crisis is changing the way governments serve the public: forcing us to reflect anew on the role of the state in a truly global age.’
Byrne told PF: ‘It is designed to signal a very different decade for public service reform. We know the economy’s going to look very different over the next ten years, and if we make the right investment now we can have a richer economy. But we also want a fairer society alongside it.’
He said he wanted to see ‘public servants working together in radical new ways’, adding that a ‘step-change’ in shared services would be ‘writ large in the Budget’.
But the minister denied that the Cabinet Office’s Transformational Government programme – with increased shared services at its centre – had stalled. ‘On the contrary, it’s been rejuvenated. Many of the leaders of that programme will have ambitious new tasks to step up to as we really begin to harness digital technology to put the power of information in people’s hands,’ he said.
Byrne said new ways of working would include seeing ‘how significant parts of our public sector organisations could be better led by frontline staff’. He also pointed to increased use of social enterprises, ‘many of which would come from spinning out public services’.
Byrne said the document was ‘framed within the Pre-Budget Report’, but could not say how far the worsening of the economic crisis since the PBR – and the cost of repeated finance industry bail-outs – would hamper the plan. Any revised forecasts would be issued in the Budget, he said.
The potential threat to public services was highlighted in Nesta’s survey of more than 500 senior public sector managers, which found nine out of ten feared the recession would lead to budget cuts that would impair provision.
More than half said that unless new approaches were adopted, services would be seriously compromised within the next five years.
Nesta chief executive Jonathan Kestenbaum said: ‘The pressures on our public services have never been greater. Yesterday’s solutions to tomorrow’s problems won’t work.’
But Colin Talbot, professor of public policy and management at Manchester Business School, said the government’s document fell far short of what was needed. ‘They billed it as some great restatement of public sector principles, but the general philosophy is what they’ve been saying for the past three or four years,’ he said.
He added: ‘It’s pretty obvious that their plans from the Pre-Budget Report are blown out of the water, but no-one knows what’s happening. If we are faced in the medium term with a retrenchment of public services, how are they going to do it?’
As the paper was published, the National Institute of Economic and Social Research released new estimates showing that the economy contracted by 1.8% between December and February – a sharper drop than the 1.7% fall in gross domestic product in the three months to January.
The NIESR figures followed Chancellor Alistair Darling’s admission that in the run-up to his April Budget, the economic situation was still ‘uncertain’. ‘There is a lot of turbulence out there,’ he told the BBC.
PricewaterhouseCoopers also warned this week that public spending has to be cut more drastically than was planned in the PBR, saying the government must act to fill a £43bn gap in the public finances by 2013/14.
It suggested two options – a real reduction in total public spending of 1.4% a year in the three years to 2013/14, or a freeze in public spending plus £25bn of tax increases from 2011.
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