The government’s U-turn on prison outsourcing does not mean that ministers have abandoned their commitment to public sector reform or to increased competition. Too many people confuse outsourcing with reform
Yesterday’s announcement by the Ministry of Justice not to proceed with the previously expected scale of prison outsourcing has generated a flurry of frankly bizarre commentary.
Some in the business community and some right-of-centre ideologically driven think-tanks and commentators have loudly responded to Justice Secretary Chris Grayling’s decision. They claim that the government is abandoning its public service reform agenda and is failing to support businesses that wished to operate more prisons.
I do not believe that the government is dropping its commitment to more competition in the supply of public services or for more public service contracting with the business sector. Too many people conflate and confuse public service outsourcing with public service reform. There were times when the New Labour government did this and current ministers often do so. This is just wrong.
Public service change and improvement can be achieved in many ways and with many different forms of service management and ownership.
Innovation, quality, high performance and radical change are not the sole prerogative of any single sector. There are many examples of public sector ‘in-house’ services securing significant, and sustained, improvement and change.
There are also examples of outsourced services under-performing and failing to achieve sustained improvement. Outsourcing contracts can, if not properly specified, freeze services in increasingly outdated models of delivery because the contract prevents affordable change and/or the provider has no incentive to innovate.
There are many ways in which the business and social sectors, including social enterprises, co-ops and charities, can contribute to public service delivery and improvement. So can public sector ‘in-house’ provision and collaborative arrangements between sectors. Interestingly, in the prison service there are some very successful examples of public-private-social sector collaboration.
Traditional outsourcing is only one option and, as I have argued regularly over the last year or so, is increasingly seen as irrelevant to the public sector’s large and complex challenges. To equate outsourcing with public reform diminishes the potential contribution of both.
One can, therefore, only assume that those who argue that outsourcing especially to businesses is the only way to reform public services are doing so for either ideological reasons or for their vested interests. Even those who argue that competition is an effective driver of change and improvement should recognise that competition can be realised without outsourcing to the business sector.
If confusing outsourcing with public service reform is bizarre, arguing that the government and wider public sector somehow have a ‘duty’ to award contracts to businesses or indeed the social sector is even more bizarre.
Government and the wider public sector’s principal duty and responsibilities are to citizens not to service providers. In respect of public services, they fulfil these duties through a mixture of policy making and implementation; strategic commissioning; regulation; procurement; partnering with others across the public, business and social sectors; and direct public sector service delivery.
They should be focused on outcomes, public value and public service ethos, good people rewards and practice and value for money. They should be more relaxed about who provides the service provided that these objectives are met.
In some sensitive, complex and critical services there may be a legitimate preference for public sector management – for example in the military, judiciary, core police activities, schools and clinical health services. But ultimately the boundaries are politically set, though the limitations of supply markets and the ability to contract because of complexity will also play a role in determining these boundaries.
If government and the wider public sector does want business and social sector providers to contract or play an alternative role in public service delivery and change, they must create the right conditions; adopt realistic approaches to procurement; and have dialogue with potential suppliers. Turning the taps of market and deal flow on and off, whilst legitimate and possible, may deter providers from investing and playing in these markets. This should be avoided.
To argue this, however, is not to suggest that the public sector, and government in particular, should never decide not to outsource. A pragmatic government will do what is right to secure the totality of its social and economic goals, as well as the best means of delivering a specific service.
In my experience many companies and social sector organisations understand and respect the government’s own challenges and its right to determine how to secure the delivery of public services including the prison service. They do not expect, but would very much like to have a five-year guaranteed pipeline of bidding opportunities. They also know and recognise that they will only be able to have an opportunity to bid and, even more, to win a bid if and when they are delivering quality services.
However, it is still a surprise and shame that some providers seem to believe that government’s prime role is to award them contracts.
Government needs to be clear what it wants and how it wants it. It should have a simple but comprehensive narrative to describe its public service ‘reform’ agenda. It should avoid undermining or appearing to be dismissive of ‘in-house’ provision as much as it should avoid seeming to prefer business sector provision. It has to act in the public interest. One assumes that Grayling believes that his decision on prison management is in the public interest.
I hope that the zealots advocating ever more public service outsourcing to the business sector will realise that governments and the wider public sector are not there to offer bidding opportunities and contracts if this is not in the wider public interest.
