Putting the social into productivity

5 Apr 12
Matthew Taylor

Improving services while cutting costs calls for a great leap forward in productivity. Tapping into the public’s reservoir of  abilities is one way to do it

As we search for silver linings in these troubled times, we can at least be confident of a significant improvement in public service productivity. The decline in real-level public sector wages is in itself enough to generate an improvement in the outputs-to-costs ratio.

At some time in the next few years the coalition government will inevitably hail a revolution in public sector productivity. But the longer-term impact of austerity on public service effectiveness is likely to be more complex and variable.

The primary ways to save money could be labelled ‘squeeze’, ‘slice’ and ‘reform’. The first involves doing the same things more cheaply, by bearing down on costs; the second involves cutting activities; the third involves re-examining the basis for an activity – exploring different ways of achieving goals and whether the goals themselves might change.

‘Squeeze, slice, reform’ is also the default order of action in terms of managerial preference and political acceptability. This is not simply because reform is harder than cutting, but because genuine innovation takes time and costs money to plan and implement.

The Royal Society for the Arts has added its own concept to the debate – ‘social productivity’ – roughly defined as the degree to which public services tap into and grow people’s ability to meet their own needs, both individually and collectively. This puts us somewhere between a traditional professional/bureaucratic model of service delivery and the view of some on the Right that state activity is inimical to individual and community self-help.

More public sector leaders and managers now seem to accept that the most powerful way to improve service productivity is by helping people to help themselves: the question is how? There are two principal elements.

The first is finding new ways of understanding and measuring community capacity. This involves mapping social assets and uncovering the hidden wealth of communities, such as their untapped potential to care, collaborate and create.

Exploring the values that underpin social networks and identifying the main change-makers in local areas is a central part of this. One example was unearthed by the RSA’s recent Changemakers research in Peterborough, which identified both the people who local citizens look to, and the tendency for them to feel their voices go unheard by decision-makers.

The second vital ingredient for ‘social productivity’ is a willingness to reimagine and recast services – based on different ways of thinking about community assets. If this all sounds rather abstract, two examples show what is possible.

Although the move to personal budgets for social care is still a work in progress, with pitfalls already emerging, there is little doubt that they are a more effective and popular way of allocating services to many groups of clients. Before personal budgets, the desire for greater autonomy was a problem for public sector managers; now it is a resource that can reduce bureaucratic costs and make services more responsive.

Take another example. Refuse collection is perhaps the single public service most changed by shifting the boundary between the responsibilities of the state and the community. A combination of public support for environmental values, local regulation and service improvement means managing domestic waste is now a shared responsibility between families and local authorities. Without this shift in expectations and behaviours, it would have been impossible for councils to increase the recycling rate without much greater extra expenditure.

From supporting children’s learning to living more healthily to greater community involvement, most of the behavioural changes public agencies want are also desired by citizens. At times like this, when public managers are under huge day-to-day pressure, it isn’t easy to think big or long term. But part of the leap forward we need in public service productivity will come from seeing communities not just as a demand on resources, but also as assets. Reimagining the nature and boundaries of services is one way to grow and tap into those assets.

Matthew Taylor is chief executive of the Royal Society for the Arts and former chief adviser on political strategy to Tony Blair. He will be speaking at the CIPFA conference in Liverpool on July 3–5

This article first appeared in the April edition of Public Finance

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