The future is public, by Paul OBrien and Mark Bramah

12 Jul 07
It might be unfashionable, but there's a lot to be said for the public sector directly providing public services. Paul O'Brien and Mark Bramah explain

13 July 2007

It might be unfashionable, but there's a lot to be said for the public sector directly providing public services. Paul O'Brien and Mark Bramah explain

Public sector employment is at a crossroads. The shift away from direct provision of services has led to more and more jobs being contracted out. The prevailing orthodoxy dictates that outsourcing is the way ahead. Yet, in the process, some of the strategic benefits of direct provision are in danger of being lost.

For example, there is growing evidence that the holistic approach demanded by many of the government's policy objectives is easier to meet with directly run services. The place-shaping agenda of the Lyons Report, the focus on community empowerment in the Local Government and Public Involvement in Health Bill and the emphasis on joint outcomes and pooled resources in Local Area Agreements all point to the need for integrated and joined-up service delivery. Perhaps the time is ripe, with so much change and rethinking going on at the centre of government, to look at the issue anew?

This is the focus of a research programme set up by the Association for Public Service Excellence, the Centre for Local Economic Strategies and the Institute for Local Government Studies. Their report, Towards a future for public employment, published this week, aims to challenge current thinking and open up debate on the value of public employment. It will be backed up by further research to measure the public sector's 'economic footprint' and chart its governance and operational activities in a particular neighbourhood. This will show how local authorities in particular can use resources to achieve 'multiplier effects' and ensure that every public sector pound spent has the maximum local impact economically, socially and environmentally.

Currently, as a result of the adoption of a market philosophy and private sector management techniques, billions of pounds have been spent contracting out public services. The focus is on the price of services and who pays for them, rather than who provides them. As a result, the link between the public funding of services and their delivery has been weakened. Provision has become fragmented and the inherent value of public employment has been overlooked, while its supposed faults have been well documented. For example, it is often viewed as existing in the interests of the providers rather than service users, of being more costly, of failing to take risks and innovate, of not offering sufficient choice and of being centrally controlled and inflexible.

In practice, the public sector has reacted well to exacting challenges, showing that it can respond in a flexible way to citizens' needs and the rapidly changing technical, economic and social environment. Efficiency savings demanded by the Gershon Review are evident across the sector. Performance improvements in local government have been demonstrated under the Comprehensive Performance Assessment. Many public services are now provided through one-stop shops, call centres and the internet and are available 24 hours a day, seven days a week.

Towards a future for public employment discusses the five main ways in which public employment contributes to wider public value. These are: providing effective leverage in local economies; shaping places; managing costs and transactions; sustaining democratic networks and accountability; and realising the potential of the local workforce.

First, the public sector is the biggest lever of the local economy and can act as a catalyst for growth and inward investment. This has been shown clearly in former industrial cities such as Newcastle, which has reinvented itself through strong public sector leadership. Nationally, direct employment significantly affects local spending by sustaining local money flows.

Secondly, direct provision contributes to place-shaping through controlling services, ensuring equality of access and co-ordinating outcomes. It facilitates collaboration between police officers, health professionals, regeneration managers, architects, planners and other professionals, who are all working towards the common cause of safe, healthy, attractive, socially cohesive and sustainable communities.

A good example is Harlow District Council's Good Citizen's Programme, which has engaged local youngsters to combat crime and antisocial behaviour and improve the local environment.

The public sector can ensure market regulation and value for money by responding to changing demands without needing to vary contractual arrangements. In the recent drive to provide higher nutritional standards in school meals, for example, local authorities found private catering contracts did not allow variation without expensive penalties. Public employment also offers clear lines of accountability and responsibility for the delivery of services, open governance and dialogue between citizens, politicians and managers. Bodies such as patients' forums have a track record of involving service users in a meaningful way.

Finally, the public sector has unrivalled ability to maximise the potential of the local workforce. It should act as a benchmark for ethical employment practices and for implementing legislation that ensures equality regardless of race, disability, gender, age and sexuality. A recent report from the Work Foundation also found that three-quarters of public sector employers have policies in place to address work-life balance issues such as

job-sharing, home working and childcare provision.

The public sector offers opportunities for people with a broad range of skills as it encompasses such a variety of occupations. It also employs more women and part-time workers than other sectors and is in a strong position to address the UK skills gap. It offers training and opportunities to people from a diverse range of backgrounds, including the long-term unemployed. Leicester City Council, among others, is pioneering work with female apprentices from black and ethnic minority communities, for example, to meet skills demands in construction.

Numerous other examples of the benefits of direct public employment can be found across the UK. Caerphilly County Borough Council makes a massive contribution to the local economy as the tenth largest employer in Wales. The NHS in Greater Manchester is developing successful policies for employing local people. The London Borough of Barking and Dagenham has set up a centre to provide literacy and numeracy skills for street cleansing and refuse staff. This has not only boosted the workers' morale and productivity, it has increased resident satisfaction with services.

So what is the way forward for direct public employment? We are not arguing that it is a virtuous objective in its own right, or for monolithic public provision. We recognise the value of using a range of service providers. But it would be foolish for public sector bodies to divest themselves of their employment responsibilities entirely and pursue a purely commissioning role. Public services have a distinguishable set of values and a significant core of services should be directly delivered to maximise that.

As a starting point, our report calls upon public sector organisations to assess the contribution direct employment can make to the local economy. They also need to consider quality, costs and complexities of contractual arrangements. They need to examine their capacity to maintain a skilled local workforce. Finally, regulators need to question whether public sector bodies can effectively discharge their functions, provide value for money and be accountable if they are not responsible for significant aspects of local service delivery.

We believe direct employment should set a benchmark of excellence for the contribution to wider policy aims and that the private and voluntary sectors should be assessed against this benchmark. The value of public employment can no longer be ignored and we are throwing down the gauntlet to encourage serious debate on this long-overlooked matter.

Paul O'Brien is chief executive and Mark Bramah is assistant chief executive at the Association for Public Service Excellence. Towards a future for public employment is available from Apse on 0161 772 18101


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