The Purple Papers and Steve Van Riel’s chapter on Public Services and Political Choices rightly emphasise that there are no pain-free options for public services in the future. They accurately describe the risks and trade-offs which a future Labour government would have to navigate. Van Riel is right to point out that pretty much any reform option has potential cost associated with it, either political or fiscal. His proposal for a kind of negotiated autonomy, in which services are delegated to frontline staff and institutions which have the capacity and capability to run them, makes sense.

However, there is one glaring omission in Van Riel’s piece. There is no real discussion of the relationship between public services and the social economy. His chapter reflects thinking rooted in the New Public Management rational choice paradigm, in which reform is really a question of supply-side change to create better functioning public services markets. But efficiency, choice, competition and service autonomy can only get you so far in an environment where the money is running out, demand is escalating, living standards are declining, the economy is flatlining and social outcomes are plateauing. These circumstances require a much bigger social and economic response that goes to the heart of our social settlement.

The RSA’s 2020 Public Services Hub has called for a new operating framework for public services based on the concept of social productivity. Its starting point is strong relationships between citizens and services and between different sectors of society as a whole. Value in public services is not transactional: it is the product of a nuanced relationship. It is not just about delivering services to meet needs, it is about enabling people to achieve their goals; to be capable, autonomous and socially responsible.

We need greater coherence between strategies for fiscal sustainability, sustainable growth and public service reform. The big challenges of the future – responding to growing and changing demand, improving inadequate and unequal social outcomes, and creating inclusive growth and prosperity – are complex, multi-layered, and interrelated. They require a joined-up and coherent approach that cuts across traditional service divides, geographical boundaries and the historical relationship between citizen and services.

Labour’s commitment to a strategic spending review, if it wins the next election, should be matched with a frank discussion about the way we make policy, how we deliver it, and what we measure and value in public services. In a report published jointly with the Social Market Foundation, Fiscal Fallout: The Challenge ahead for public spending and public services, Henry Kippin and I argue that a strategic spending review should promote three core principles:

1. Rebalance and realign: Previous spending reviews have been strongly focused on delivery from the centre and overly protective of siloed budgeting, top-down departmental management, and have insufficiently promoted multipolar growth. There is a need to fundamentally rebalance revenue-raising and expenditure towards local government, encouraging greater service collaboration and integration, and enabling smart cities to compete internationally. The process for this transfer of power should be based on combining city deals with Total Place to create a single budget and consolidated powers. The Heseltine report and the deals which cities like Manchester and Leeds have negotiated provide a good starting point for this.

2. Citizen-side innovation: Our public service operating framework is too Whitehall-centric and not concerned enough with the collaborative role public services and citizens can play in reducing demand and transforming delivery. We should be focusing much more strongly on partnerships between citizens, service providers and local government among others to shape public services to both respond to local need and prevent that need from arising in the first place. Labour councils like Sunderland and Oldham have successfully developed approaches based on community leadership and the principles of cooperation to broker the terms of new social compact to strengthen local social institutions and reduce service demand.

3. Manage for social productivity: We should be assessing service performance based on public service productivity and the social and economic value that services create. We should also be more transparent about how citizens themselves contribute to, and benefit from, public services. We need a new performance framework explicitly focused on driving economic productivity and social value through the commissioning and delivery of services.

Change on this scale cannot be achieved by a new government simply pulling a few levers in Whitehall. Public services are an expression of social solidarity. So any substantial system change must be rooted in popular consent and local insight. As a recent Ipsos MORI poll commissioned for the RSA showed, most people in the UK don’t yet feel affected by cuts. Fifty-nine per cent of respondents don’t think that their lives have been changed by cuts so far. Given that most of the 2010 cuts are still to be implemented, that’s likely to change. Research conducted by the SMF, and published jointly with the RSA, predicts a further £48bn in cuts after 2015 if the coalition government  sticks to its fiscal rules. Politicians need to be honest about the consequences of this for citizens, and to start a frank public debate about the often stark social and economic choices we face as a society.

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Ben Lucas is principal partner, 2020 Public Services Hub and RSA chair of public services

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Photo: nrares