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Public Services

My Lords, I am sure that we are all grateful to the noble Baroness, Lady Walmsley, for giving us this opportunity to discuss the important issue of how we monitor our public services. However, the issues that she raised in her speech and that are implicit in her Motion on the private provision of public services are, I suggest, equally important to all providers of public services, whether public, private or third sector. There is something slightly quaint about singling out private sector providers for special attention. As the noble Baroness said, in many parts of public services, such as health, adult social care, children’s services and criminal justice, a mixed economy of providers has been the reality for some time. As someone who has, in a variety of roles, spent over two decades promoting such a mixed economy, I believe that if it is done properly, the public can only benefit. I want to concentrate on this wider context and the arrangements necessary to ensure quality, value for money and transparency among all types of public service providers. I shall deal briefly with a great myth that continues to be aired noisily by those who regard private provision of public services as, to coin a phrase, the Great Satan. Good and bad public and private providers of services exist; they have always existed and, no doubt, they will continue to exist. The trick is to weed them out or not to appoint them in the first place. My experience as a long-standing public servant is that there is not much to choose from between a public and a private monopoly for giving the public a raw deal. I have seen and contracted for private providers in health, adult social care and custodial services that match and exceed their public service counterparts. I have also seen the reverse. The evidence on private and hospital-cleaning contractors, for example, is that they are both as good and as bad as their public counterparts. Very often, it is morea matter of the quality of the contract and its management than anything else. Let us never forget that group of small business men with profit-and-loss accounts—we call them GPs—who have been providing our primary care in the NHS for nearly 60 years. More recently, in the field of elective surgery we have seen the introduction of independent sector treatment centres, which has finally convinced some sceptics in the NHS that you can separate emergency and planned surgery lists and that that leads to fewer cancelled operations and increased adoption of day surgery. In all these examples and many others, fair and well drawn contracts, issued on a competitive basis and properly enforced, are critical to success. No one is arguing with that, but even-handedness is the key. The ISTC example illustrates the benefits of competition in improving value for money in public services, but we have seen the same results in other areas. My experience as a Minister, as a director of social services and as the first chairman of the Youth Justice Board leaves me in no doubt that a degreeof contestability is critical in most of our public services if we are to foster innovation and improve productivity. As public expectations of our public services rightly grow, the biggest challenge is to respond more effectively and productively than has sometimes been the case. That is why a twin-track approach of investment and reform in areas as diverse as health and probation is important in improving these services. Both services have had a lot of extra money, but they still have some way to go in delivering the productivity improvements that need to accompany that investment. Probation is a good example of where more properly commissioned and contracted private and voluntary sector services, as envisaged in the Offender Management Bill, might also help to reduce the use of custody. We have a long and honourable tradition of voluntary organisations providing public services, which the noble Baroness rightly alluded to. Among the best things that I did as a director of social services in Kent was to contract out to Age Concern many day centres for elderly people and to hand over family support work to voluntary organisations. The result was services that were more responsive to the users than the previous public service provider had been. Of course, not every voluntary organisation is an excellent service provider. I have terminated contracts with voluntary organisations, just as I have terminated contracts with public providers. It comes down to the processes by which you monitor, contract and collect information. To make things more complex, we are now in an era of joint ventures between the different sectors, and we have an emerging social enterprise sector. There is no point in concentrating on the private sector alone. We are moving into a period when a far more complex range of people, in joint ventures in some cases, will provide our public services under contract. This means that we need approaches and arrangements for guaranteeing quality and value for money that operate even-handedly across all providers of public services, irrespective of their governance systems. That is particularly crucial now that the public are largely indifferent about who provides those public services—and they are still public services, commissioned by public bodies that are accountable for spending the money that they use to award those contracts. In the NHS, for example, people across the social classes want more say on where and when they are treated. We are moving towards a situation where people want more choice. That is why the Government are right to promote choice across the public services. This is a means of improving user experience. There is nothing that so interests people as getting a good deal. Leaving them to make some of those choices and to report on their experience is a good way of driving up the quality of our public services. Choice for users is a mechanism by which we can often make improvements. This approach is also generating more and better information for service users. I cite, for example, a pioneering website called ““Patient Opinion””, set upby a Sheffield GP, which allows patients to post their own hospital experiences and encourages hospital improvements. We need more of those improvements. We can trust the service users to drive the quality and VFM agendas. Choice and contestability are two key drivers for improved public services, but they cannot do the job on their own. We also need better commissioning and contracting, good and open performance measurement, and more effective and even-handed regulation. The Government have been working hard to improve those arrangements and I am glad to have had the opportunity to play my part in bringing about those improvements. Local government has done much good work in improving public sector commissioning and contracting, and we all have a lot to learn from its experience in that area under successive Governments—I am not making a party-political point. Other public services could well learn from that experience, too. However, we have to recognise that outsourcing is not a dirty word; it is a way of getting a job done more effectively than often a particular public corporation can do. Done properly, outsourcing is a sensible way of using public money. Saving up our pennies to buy a massively expensive piece of capital equipment that can quickly become out of date is poor value for money; that approach is often better replaced by leasing arrangements, where the lease requires the provider of that expensive kit to train the staff, maintain it and keep it up to date. These approaches that involve the private sector can bring huge benefits to the public sector and achieve better value for money. However, none of these changes in any way diminishes the public accountability of the public body that accounts for the expenditure of that money. Nothing in any way removes Parliament’s ability to scrutinise that way of providing public services. I want to spend a few moments talking about targets, which has become a dirty word in public services. It is naive and disingenuous to suggest that targets have no place in this area. As an aside, I was mildly amused to hear that the Leader of the Opposition is very keen to abolish all targets in the health service but wants to introduce them for climate change. There is an interesting approach on these issues when you are in opposition, compared with when you are in government. It has been the much dreaded targets in the NHS that have actually reduced waiting times and cancer deaths and improved the quality of our A&E services. We must be selective in the way that targets are used, but they are a way of driving up improvements in our services. We need good performance, assessment and measurement in our public services and we need to make sure that that work is often done on an independent basis by independent bodies, such as Ofsted and the Healthcare Commission. They have a responsibility to put their findings into the public arena and to make that information available to the public, which also feeds into helping the public themselves to improve the choices that they make in the use of public services. Let me finally say a few words about regulation. In this country, too much public inspection and regulation has been allowed to become over-bureaucratic and, in some bodies, has delivered a degree of mission creep. The Government are right to have tried to tackle this problem. They should be commended for the Better Regulation Task Force and its work and for trying to integrate and focus many of our public inspectorates. In health and social care, there will be a new combined regulator, which will have to behave even-handedly with service providers, whether they come from the public, private or voluntary sectors. This is an issue for debate and I am sure that we will debate it further, because the Government will need to bring forward legislation in this area. My critical point is that, in regulation, we need to adopt an even-handed approach to providers. There need to be the same rules for entry to the market for providers, whoever they are and wherever they come from. There need to be the same rules for removal from the market for failing bodies. This needs to be even-handed and we should not continue to perpetuate the myth that somehow one particular type of provider is supremely better than another type of provider because they come from either the public sector or the voluntary sector. That is simply not true; there is no historical evidenceto support it. This is all about good contractingand commissioning of services, good performance measurement and assessment, and good regulation on an even-handed basis.