Since 1997 Labour has made two significant advances when it comes to the public services. The first is to have delivered substantial improvements in their delivery. Compared to a decade ago public services are in a far better position practically. Second, Labour has put them in a far better position ideologically. The fact that all three main political parties now claim that public services come first is an ideological victory for progressive politics.

The question is, where next? The next stage of public service reform should be about securing an irreversible shift of power to the users of services. That must mean moving beyond narrow consumerism. Instead the principal objective of reform should be to empower the individual citizen. That means recognising in a way that previous reforms have not done that there is a power gap in society that, as progressives, we should want to close.

So, first, power should be moved from the centre to the local. And there should be a new guiding principle in our governance: subsidiarity, in which power is passed to the lowest possible level consistent with the wider public good. For example, to ensure that the local NHS is fully focussed on, and accountable to, local communities, the best local councils – which are elected – should take over health commissioning responsibility from primary care trusts – which are not. The result would be a single local organisation in charge of guaranteeing integration between health, social, housing and other services. There is a similar case for directly electing local senior police officers.

Second, the transition from public sector to public service should be completed. New Labour has rightly made a managed form of competition a reality in mainstream public services. Of course there are services where competition is inappropriate but where it can be applied it gives organisations a sharp reason to focus on delivering better services to users. That is why there should be a level playing field where public, private and voluntary sectors are able to compete to be providers.

So, for instance, local services – including GPs, colleges and job centres – should be subject to 10-year renewable franchises. Poor performance would trigger automatic refranchising. Social enterprises formed from highly performing public service staff and/or voluntary sector organisations would be actively encouraged by government to bid for franchises alongside private and public providers.

Third, change should seek to empower and engage public service staff, not demoralise and demotivate them: people working in the public services are normally motivated by a sense of pride and professionalism about serving users. Sometimes change has been felt to have undermined their autonomy. Equally, opposition to new innovative ways of working has taken place even when it has been in the interests of users. There is a pressing need to realign the interests of those providing services with those using them.

By shifting power from the central state to local services we can rekindle the engagement and enthusiasm of public service professionals. More freedom, better careers and improved pay – each linked to local improvements in service performance and productivity – could form part of an overarching new relationship between central government and public servants in which power and resources – and with them responsibility and accountability – are passed from the centre to the frontline.

This would involve the remits of pay review bodies being set to ensure – except in exceptional circumstances – that national pay awards are in line with cost of living increases. Staff in local services delivering good performance and outcomes – and therefore generating more income under a system of resources following results – could then earn additional rewards locally.
Fourth, change should be driven less from the centre by standards and targets and more from below by incentives and users: standards can deliver key objectives but, where they are too numerous and badly designed, they can disperse rather than focus effort. Similarly, services are often currently funded according to a central government assessment of what they should spend rather than what they actually do. This does not incentivise success so in future resources should more closely follow results.

For example, schools should receive part of their funds according to the value they add to their pupils’ education – so providing incentives for them to secure more socially balanced intakes. In turn, the measurement of local health and social service performance should increasingly focus on how they have improved users’ quality of life.

Fifth, individual citizens should be able to exercise control, not just choice. To guarantee a fairer spread of opportunities, individuals need to have more direct forms of power in their own hands. In the NHS patients are already able to choose their hospital. The next stage is to let them choose forms of treatment. In social care direct payments already allow some older and disabled people to customise care according to their own need. The next stage is to give far more people (including those in old age, in training or with long-term health conditions) the option of their own individual budgets – worth the annual cost of the conventionally provided service – so that rather than having to choose from a preordained menu of services citizens can formulate their own menu.

Parents could be given a credit to spend on childcare as they saw fit. It could be made up from the childcare element of the working tax credit, the nursery education grant and the Sure Start general grant to local authorities. It could be weighted to give more to low-income families or people in training for employment.

Sixth, reforming public services should improve, not impede, social mobility: for all the improvements in services and reductions in poverty achieved over recent years Britain remains less socially mobile than it should be. The equity principle in our public services has not always been matched by practice. In health, for example, uniformity in provision has not produced uniformity of outcome. Similarly, while the number of pupils with free school meals obtaining five or more good GCSE passes has improved at a faster rate than pupils who are not entitled to them, the education gap between rich and poor remains stubbornly wide. We need to find new ways of breaking the cycle of poor services reinforcing poor social outcomes.

Pupils from deprived or disadvantaged backgrounds that are struggling or falling behind would be able to choose a new Education Credit. It could be spent, by agreement between parents, the pupil and the school on providing extra one-to-one support either in school or with an approved educational tutor.

In addition, parents in schools that are designated as failing could be given the right to choose an alternative school for their child. This would be accompanied by an opening up of the school supply market to new providers in areas where the overall performance of schools in an area is poor and where a high proportion of parents don’t currently get their first preference of school.

Improving public services is the bread and butter of British politics. New Labour has achieved much in the last decade. But old problems and new challenges are combining to demand further fundamentals reforms. A new agenda beckons. It is not slowing down on reform that will best realise our values. It is speeding up.

The Progress Public Service Reform Policy Group wants to hear your views. Download their green paper at archive.progressonline.org.uk

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