Another country, by Sir Jeremy Beecham

9 Nov 06
Wales was always bound to go its own distinctive way on the issue of public service reform. Now, as the Welsh Assembly Government prepares to respond to his review, Sir Jeremy Beecham explains why

10 November 2006

Wales was always bound to go its own distinctive way on the issue of public service reform. Now, as the Welsh Assembly Government prepares to respond to his review, Sir Jeremy Beecham explains why

Improving public services is at the top of the political agenda in Wales. A lively discussion has been taking place between politicians and practitioners over the best way to provide high-quality services for everyone, no matter where in the country they live.

That debate is about to get even more interesting. Last week's performance data for local services in Wales, the first comprehensive set, painted a mixed picture. While they showed improvements to services in many areas, they also revealed wide variations in performance between authorities.

Sue Essex, the Welsh Assembly Government's minister for local government, has made it clear that she wants these gaps to be narrowed. On November 21, she will be setting out her government's response to the review of local services in Wales that I led and which reported to her in July.

What the minister has to say will no doubt spark an even more vigorous debate that will help to shape local services in Wales for years to come.

The review was prompted by the determination of the Assembly Government and the Welsh Local Government Association to build on the work of the Making the Connections public service reform programme. Its aim was to identify both how local services delivery might be improved and any changes in accountability arrangements that might be necessary. The review team was not expected to examine services in detail nor make specific recommendations for detailed improvements. Instead, we sought to identify common themes, drawing on published data, evidence supplied by a wide range of stakeholders and discussions with around 350 people.

We were concerned with the complete range of services – devolved and non-devolved, those delivered by local councils, and those that are the responsibility of a range of agencies, from NHS bodies to further education colleges.

We began with the following premises: that what matters is outcomes; that reform is a means, not an end; and that Wales, by virtue of its history and geography, has different opportunities and challenges from England and, indeed, other parts of the UK. It rapidly became apparent that there was much to value in Welsh governance post-devolution, including a much closer relationship with Assembly ministers than with their Welsh Office predecessors; examples of good and improving practice in service delivery; and an approach that in principle prefers a collaborative citizen-based model to the market-orientated approach developed elsewhere.

On the other hand, there is a pressing need for rapid improvement to meet the challenges of Wales' economic, social and demographic circumstances, and there are concerns about performance in key areas, such as the skills of young people leaving school. The prevailing view was that performance was patchy. Moreover, given that the financial outlook is one of much more limited growth in resources than has been the case in recent years, the need to make the Welsh pound go further places a premium on increased efficiency.

The objective we identified was to ensure that Wales develops a citizen-centred, responsive and cost-effective system of governance, well managed at all levels, and accountable to the people it serves. In addition to maximising the use of more limited financial resources, services will increasingly need to reflect the demand for greater personalisation.

However, we believe Wales will not wish to blur the distinction between personalisation – that is, tailoring provision to the needs and aspirations of the citizen and community – and choice, in the sense of deliberately creating markets in which different providers compete and in which commissioning is divorced from providing.

In much of Wales, in any case, geography alone militates against such market-based solutions. The scope for competitive provision in, say, hospital care or schooling, is obviously limited by considerations of distance and sparsity of population.

Given the will, Wales is capable of becoming an exemplar of small-country governance. Three major constraints present themselves, the 'Three Cs' of complexity, capacity and culture. Complexity is inherent in the devolution settlement under which some major areas of public policy remain the responsibility of Whitehall and Westminster, including policing and the criminal justice system, welfare and key elements of the environmental agenda.

In addition, the structures for delivering the devolved agenda are, for a relatively small population, albeit one that is widely dispersed, highly complicated – 22 councils, 22 health boards, 15 hospital trusts, three fire authorities, six spatial plan districts, four WLGA regions and four (non-devolved) police authorities.

Funding streams proliferate, with as many as a hundred irrigating an individual local authority area, and the burden of inspection and regulation is keenly felt.

Interestingly, very few of the people we met or who submitted evidence advocated local government reorganisation. While most would not have started from where Conservative Welsh Secretary John Redwood left Wales in 1995, they ruled out wholesale reorganisation as likely to prove a massive and costly diversion from the pressing need to secure improvements now.

The review team endorsed that view, preferring a collaborative model, but making it clear that if local service delivery did not rise to the challenge, then alternatives might have to be considered in a few years time.

Capacity emerged as a real issue across all sectors, with the risk that devolution might somewhat aggravate the problems of recruitment and retention. While these are by no means confined to Wales, there is a perception that increasing divergences in practice between Wales and elsewhere might limit the opportunity to move between different parts of the UK. This seemed most relevant to the NHS, but government and even academia might also suffer from the perception, whether it is valid or not.

There are clearly problems in some major areas, such as social work, civil engineering and the ability of local health boards to commission effectively from more powerful trusts. The need for better workforce planning and the sharing of skills across and within sectors is evident. Performance and project management were both often represented as under-developed, and Wales has been, it was suggested to us, slower to advance the e-government agenda.

Perhaps the most important of the Three Cs, however, is culture. The review team valued the tradition of the public service ethos, of co-operation rather than competition, but it recognised some limitations. Cosiness and a lack of ambition can be fostered by a lack of challenge in the system, and a citizen-centred delivery system can be effective only if the citizen is well informed about the choices that have to be made in the design and provision of services and has the ability to judge how the provider is performing.

Here, Wales has not matched the best achieved elsewhere. The Comprehensive Performance Assessment process in England, whatever its flaws, has energised performance management and improvement. More accessible and meaningful information about performance and outcomes would help both decision-makers and the public, without going to the lengths of league tables for exam results, for example. We detected, moreover, something of a public sector, rather than a public service, ethos, a reluctance to go beyond consulting the voluntary and community sectors, for example, to embrace them as potential providers in a genuinely mixed economy of provision.

Housing provided the most telling example. Given the lack of traditional funding available to help local authorities meet the decent homes standard, councils' reluctance to embrace the alternatives of arm's-length management organisations, stock transfer or community trusts (a co-operative model) has constrained progress. Councils have also made little use of the new prudential borrowing powers or the power to trade.

It was disappointing that education directors seemed to want more guidance from the Assembly Government, and that social services provision has, until recently, been accorded a relatively low political priority by some authorities, despite the depth of need and some dismal performance. We welcomed the WLGA's intervention on the latter issue.

But the cultural problem is not confined to local government. As in other parts of the UK, there is a general reluctance to recognise that what is familiar, the local hospital or sixth-form, for example, might not be capable of offering the quality of service or range of opportunities to which people are entitled, and that opportunity costs have to be addressed.

So much for the diagnosis. The prescription itself is necessarily somewhat complex, but it rests on the principles of leadership and accountability, seeking ways of facilitating and encouraging effective collaboration, and of engaging people as citizens, with both rights and responsibilities, and not merely as consumers, with, essentially, rights but few responsibilities.

As elsewhere, Wales needs a cross-cutting approach to dealing with its legacy of poor health, limited economic opportunity, relatively limited entry into further and higher education and the problems of the environment and regeneration. That requires a more coherent approach within and between the different agencies of government, and a scrutiny process capable both of reviewing performance and promoting informed debate about the challenges ahead and the direction of policy.

Thus we were told that the silo mentality is still evident in the Assembly Government, even within individual departments. We call for First Minister Rhodri Morgan and the permanent secretary to lead the process of developing corporate policies, co-ordinating policy and delivery to secure declared outcomes, backed by a strong Treasury-style approach to financial challenge.

The Assembly Government should seek to make the system of inspection and regulation more proportionate and risk-based; streamline funding regimes; reduce consent regimes; and ensure that cost-shunting, for example between health and social care, is avoided, and benefit sharing is promoted. It should take the lead in workforce planning and training, encourage secondments across the public services and across the sectors, including the private and community sectors. It should also promote a more mixed economy of provision, on the basis of a level playing field, investing in capacity building in the third sector.

The review proposed the piloting and eventual rollout of Partnership Action Contracts. Under these, local councils, the Assembly Government and Whitehall departments and agencies and other partners agree on ambitious local outcomes, including some major national objectives negotiated with the WLGA. And they are accorded the freedom and flexibilities to deliver them, including the ability to pool budgets and share sovereignty.

Offering financial rewards for successful outcomes could add incentives to the process. Councils, health boards, further education institutions and their parent departments and non-devolved departments would need to commit to the process. Given the scale of Wales compared with England, there is potential for more effective relationships than have thus far been apparent under England's Local Area Agreements, particularly as we propose that the minister responsible for each spatial plan area should be involved with each Pact in his or her area.

Both the Assembly Government and councils, backed by the WLGA, should rigorously pursue efficiency gains, cashable and non-cashable, especially in the realms of back-office and transactional services. Again this should be both within and across the sectors, including the private and third sectors. Given a level playing field, the public sector should not be fearful of exposing its services to competition, and indeed should be seeking to win a share of available work in the other sectors.

Smaller authorities could resolve some capacity problems by sharing staff, perhaps even creating joint management teams. Clackmannan and Stirling, for example, are doing this in Scotland. Collaboration should also be encouraged, such as the Heads of the Valleys Partnership to promote regeneration and the Cardiff and Newport partnership on waste management. Best practice in service delivery, procurement and efficiency needs to be more widely disseminated.

Elected members and members of appointed bodies should also be better equipped and supported to ensure that they are aware of what is achievable and are able to emulate it. Peer review should be more widely practised.

Accountability needs to be fostered by an enhanced scrutiny process, both at national and local level. The Assembly should use its new powers under the Government of Wales Act to develop a more mature form of cross-cutting scrutiny, free of the party whip. It should focus more on looking forward to new or changing challenges and the policies required to meet them, than on retrospective, still less essentially oppositional, analysis of decisions already made.

This should be echoed in local government, with higher status and more support for members engaged in scrutiny, and greater involvement of service users, experts and social partners. The provision of better, more accessible information on performance, with comparative elements, and the facility to track the direction of travel – backed by regular citizen satisfaction surveys – should enhance the degree of challenge and engagement.

Smaller councils might need some extra financial support to resource this function, which might be jointly provided with neighbouring authorities. Scrutiny should extend to non-local government services and bodies.

A right of redress in the event of service failure – and, in the last resort, the possibility of intervention – should concentrate minds.

The response so far to the review team's report has been very positive. We do not underestimate the magnitude of the changes we advocate, but neither do we underestimate the need for them if the people of Wales are to enjoy the public services they require and the confidence to invest in them. We believe Wales is ready for the challenge and capable of responding to it. Five years on, the difference will be palpable.

Sir Jeremy Beecham is the leader of the Labour group at the Local Government Association and chair of the Review of Local Service Delivery in Wales. He is one of the speakers at the CIPFA in Wales annual conference, 'Delivering expectations', which takes place at the Holland House Hotel in Cardiff on November 16–17


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