Competition is meant to underpin the government's public service reforms. But ministers are running scared of the c-word
At the launch of the long awaited open public services white paper yesterday, the prime minister’s speech was surprisingly short on the word ‘competition’. Indeed it passed his lips only once.
That’s strange, since competition is central to the reform ideas proposed in the white paper. It’s also understandable, since the decision to give the c-word a starring role in the health reforms arguably led to that on-going debacle.
Nevertheless competition was the powerful narrative that underpins the paper and the speech. The prime minister was right to invoke the effects of competition as the means to better and fairer services for all. He was right too to say that promoting competition isn’t about saying that public sector providers are worse than private ones. But somewhere along the line, competition does call for private sector involvement, and the government needs to take that argument on if its thoughts are to be turned into policy deeds.
There are a variety of ways to improve public services through competitive pressure – some more red-blooded than others. One example is what might be called ‘virtual competition’. Even within a public sector monopoly the availability of comparative performance data from services in one area to services in another can have a huge impact.
A fascinating recent study from Bristol University showed the effects on GCSE results of withdrawing school league tables in Wales after 2006. When comparisons of school performance stopped being made, the impact on grades – particularly for the poorest – was negative and substantial. Teachers’ and doctors’ professional pride can improve services where comparing performance is possible, so the white paper proposals to make such information more widely available is welcome.
But the government rightly wants to go further than this, enshrining a legal ‘right to choice’ for service users to boost competition from the demand side. Whatever such a ‘right’ means, strengthening citizen choice is one of the most powerful tools available for improving public services. But it’s here, in articulating what choice means, that the white paper pulls its punches.
First, if people are to have meaningful choice, services have to have enough spare capacity to offer citizens alternatives. In straightened fiscal times, that extra capacity can only come from private investment. Yet in education and other areas, the government remains nervous about articulating that need.
Second, is the thorny issue of accountability and what that implies for not-for-profit sector involvement in this grand plan. The white paper sets up a straw man around the idea that central control of services exists only because of an outmoded belief that the ‘man in Whitehall really does know best’. In reality, centralised control has been a consequence of the need to ensure accountability for public money.
When decision-making is devolved to non-state providers, maintaining accountability becomes very difficult. One of the best ways to do so is where the new providers are made to bear the financial risks of providing a poor service. But as the man in Whitehall sheds financial risk, are cuddly co-ops, mutuals and charities realistically going to be able to manage it?
And third, if choice is to improve services, that will mean that your local hospital might have to close if it isn’t very good. These are the controversial parts of the choice agenda, but the white paper does little to take on the argument.
To prosecute the case for reform the government will have to be bolder than this white paper. It must win the argument that competition is good for citizens, especially the most disadvantaged; convince the doubters that private sector involvement and competition need not mean wholesale privatisation; and stand by the decisions of service users, voting with their feet, when poor quality providers have to close.
If it does not, this articulation of wonkish principles will have little impact on the country we live in.
