Wanted: better, cheaper public services

Whenever people discuss cuts in public services in response to the national fiscal crisis, the otherwise gloomy conversation invariably ends with a rousing call to seize the opportunity to achieve long-overdue service transformation. But the intense pressure to deliver early cash savings makes this much easier said than done. No self-respecting service commissioner or provider would admit to slashing and burning their way to savings targets. However, the speed with which the coalition government has set about ordering cuts risks leaving little time for careful preparation of real change – or for measures that might yield economies only in the medium term. Introducing a recent report on the work to date of the Commission on 2020 Public Services – an inquiry into how public services need to adapt over the next decade – report author Laura Cumming recommended a recipe for transformation comprising "one cup of new opportunities created by evolving technology; one cup of long-term demand crisis driven by ageing population; half-cup of sense of urgency created by current fiscal crisis". All to be simmered, no doubt, on a low light. To judge from some ministerial rhetoric, the alternative recipe in the government cookbook might require lashings of urgency, a pinch of demographic change and a dusting of technology to taste. Bang it in the microwave on full blast and trust to luck. Unfair as such a summary may be, it is instructive to compare and contrast the emerging principles of the 2020 commission's approach with the Treasury's criteria for the upcoming spending review. The former are: a shift in culture from social security to social productivity; a shift in power from the centre to citizens; and a shift in finance, reconnecting funding with the purposes of public services. The latter comprise nine questions, starting with: "Is the activity essential to meet government priorities?" and including: "Can the activity be provided by a non-state provider or by citizens, wholly or in partnership?" Best of both worlds Difficult as it seems, the challenge for service commissioners and providers is to combine both approaches. If you can pass the Treasury's value-for-money test, while at the same time ticking the 2020 commission's boxes, you will be truly on the path to transforming public services. What kind of thing might fit such a demanding bill? The words on everyone's lips in public services for the past 12 months have been Total Place, the idea of pooling all public resources in a given area and rethinking how they might be used to better effect. Now known as "place-based budgeting", in deference to the new government's desire for a fresh start and fresh language, the notion lives on. But the task now is to turn a dry blueprint into something that people can relate to. "The 'Aha!' moment for me was not simply the idea of having a partnership between, say, the local authority and the [NHS] primary care trust, because that's a bit abstract," says Jon Sibson, government and public sector leader at consultancy PricewaterhouseCoopers. "It was the idea of thinking about a service through the lens of the service user. That's the key." A second, not unrelated, concept is that of service co-design, involving the enduser of services in shaping and delivering them. This is manifested, in turn, in the practice of self-directed support and the mechanism of the personal budget. Far from being an idealistic vision, there are now around 60,000 users of social care services with personal budgets, according to the In Control social enterprise that promotes them. The idea is being road-tested in the NHS among people living with a long-term condition. "People with the biggest interest in getting all they can from every pound tend to spend the money better than in the previous system," says Jon Glasby, professor of health and social care at the University of Birmingham. Critics would argue that, for all their merits, innovations like personal budgets and place-based budgeting are unlikely to show big savings in the short run. To feed the Treasury beast in the meantime, public services must throw it some red meat. Shortcuts to bigger savings One way would be by cuts in back-office costs through sharing overheads, something regularly mooted but rarely realised. Calculations suggest that public sector agencies spend £7.2bn on finance, human resources and procurement – a figure that could be halved if every agency was as efficient as the top 25%. The Labour government sought to shame poor performers into taking action; the coalition may be inclined to be more directive. Another way to produce quick cash without hitting services would be to introduce more selective charges. For all the kneejerk indignation that such a proposition provokes, there is remarkably little complaint that the Identity and Passport Service offers one-week passport renewal for £112.50 and a same-day turnaround for £129.50, as against a standard charge of £77.50. A despicable dilution of basic service quality, or a thoughtful convenience for travellers? As our public services come to terms with the age of austerity, no changes are going to be free of controversy or pain. But a judicious mix of short-term, proven economies and longer-term, imaginative reform could spare services from the more brutal surgery that some would be only too pleased to see carried out. David Brindle is the Guardian's public services editor Return to the home page for more on public services