How to manage rising demand for local public services

24 Jul 15

We need to shift from a focus on supply-side improvement to one on demand-side change. Here are five ground rules for a more collaborative approach to public services.

Around 18 months ago, Anna Randle and I wrote a major piece of research on what we called the ‘emerging science’ of demand management. The term was, and remains, controversial. Our aim was to articulate a shift in the starting point for addressing local public service reform: from supply-side (service-led) improvement, to demand-side (citizen driven) change.  Our thesis was simple: flipping the starting point opens up a whole range of possibilities for transformation, led by a more consistent focus on understanding the real needs, assets and aspirations of citizens.  

Having worked since then to support councils and other public service bodies to understand and re-think demand more effectively, I recognise that there is a spectrum of ‘demand management’ approaches out there, and not all of them are helpful or progressive.  The ornithologists among us might characterise this as three birds: 

  1. the hawk: for the hawk, demand management connotes simply restricting the supply of entitlements to citizens – a top-down way of saving money and managing expectations. 
  2. the ostrich: for the ostrich, demand management is too fundamental a challenge to the basic job description, requiring a shift in thinking and practice that is too uncomfortable to make.  
  3. the owl: the owls in government ‘get’ the need to reshape services around a better understanding of demand. But they don't have the means to turn wise counsel into action. 

These perspectives pose problems, but they are understandable. Making fundamental change stick in government (at whatever level) is fantastically hard; and the financial constraints that local authorities are under are powerful enough to undermine even the most zealous advocates for innovation. Hats off to those that have really tried to put the citizen at the centre of their reform strategies, and to those that have sought to bring light to the root causes of human misery (and begin preventing it) in their localities.  

For me, demand management is less a set of techniques, and more an evolution of public management: a plea to deliver for social outcomes, not service sustenance. So for the agenda to remain relevant, it needs to adapt with the context we are in. Single-point solutions (e.g. improving communication response rates or particular service areas) are clearly necessary but not sufficient. So what are the elements that will drive best and better practice in the next phase of local service reform? Here is a first go at five ground rules for a more collaborative version – your view is most welcome! 

1. Don’t assume that demand is always a bad thing

The most powerful thing about demand management should be its ability to change and challenge the way people think about what they do. It isn’t just about innovation, but at root a fundamental re-think of the relationship between citizen and service. In a business context, increased demand is a good thing – so can we take this ethos and work to create demand for a different type of preventative intervention? Emerging plans for a West London Children’s Zone offer a model.   

2. You can’t manage what you don't understand 

The first step in re-shaping demand is understanding it – and even the very best and most creative public agencies have trouble demonstrating that they do. In some of the best recent local reform examples – think Haringey’s delivery unit, Oldham’s warm homes agreement or Suffolk’s emerging work on disability benefits with DWP – creative partnerships were built on a more granular understanding of the drivers of demand both in the community and within the service offer. 

3. Effective delivery is vital, but it needs to be collaborative

One important insight from our work has been the need for the more creative forces of innovation and design to be framed within a coherent account of delivery. Without this, demand management innovations will remain marginal to core business and budget transformation. The big difference today is that this delivery framework needs to be resolutely cross-agency and cross-sector. Our collaborative delivery framework developed with the UNDP is a step in this direction, but local adaptation is key.  

4. Nudging other people is not enough!

A better understanding of why citizens – both individually and collectively – make the decisions they do must go hand-in-hand with a degree of self-reflection from government that has, in our experience, been less forthcoming. So as councils, clinical commissioning groups and other public agencies start working on ethnographic research and behavioural insight with the community, they shouldn't forget to hold a mirror up within and between their organisations. As behavioural expert Warren Hatter argues, we need to ‘stop trying to change people’s minds’. Values manifest as actions and behaviours, and stress-testing them is key. 

5. Devolution won’t work without collaborative demand management

If the best way of managing demand is for people to be in work (as many people have told us), then we need to prioritise a closer relationship between economic growth and public service reform strategy.  This is not just about transport, planning and education (to heavily paraphrase the government’s new productivity plan), but about creating a ‘social spine’ for places in which proactive public spending is valued as a force for good.  This should be a central premise of devolution in the ‘Northern Powerhouse’ and beyond.  

If these are five ground rules, what comes next?  At Collaborate we are working with a leading group of public service agencies to explore a more collaborative model of demand-led service reform. We are learning a lot about how a smarter diagnosis of demand can open up opportunities to work with collaborative citizens in different ways. In the autumn we will be publishing and sharing some of these lessons alongside the Leadership Centre at the Local Government Association. Changing systems, services and places will not be done overnight.  But as one local authority chief executive told us: “I am yet to see the alternative!”. 

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