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Carillion’s collapse massively distracts from the real problems the public sector faces
Adam Lent, Director, NLGN, 17 January, 2018

Ask public service workers to identify their biggest challenge and the answer is close to unanimous: demand. The crush in A&E, the backlog of elderly patients desperate to escape their hospital bed and get back home, the children’s social worker buckling under a growing caseload of troubled kids, the homeless woman left on the street because no-one has any space or time to help her out. Each speaks to the pressure that has been building for many years.

If we genuinely care about having world-class public services then these rising levels of demand need to be at the heart of national debate. But the collapse of Carillion has launched a policy dispute that will prove to be an utter distraction. Predictably, Labour has used the crisis to demand an end to out-sourcing while equally predictably the Government has rushed to defend partnerships with the private sector. We are shaping up for an over-heated public versus private battle which is likely to last all the way through to the next General Election.

This is a fight based on party political nostalgia. It is a struggle between two historical models of public service neither of which were designed to meet the biggest challenge we face today. Labour looks back wistfully to a post-war era when all core aspects of public services were delivered in-house. The Conservatives are still in thrall to the New Public Management theories of the 1980s and 1990s when bringing the supposed disciplines of the market to bear on the public sector was the height of radicalism.

It is not at all clear how either model offers a better answer than the other to constantly rising demand. Labour’s preferred model was designed to provide a limited social safety net constructed by an elite of expert technocrats. The Conservative’s ideal was all about efficiency and user choice. Of course, each might claim that they offer a route to saving money which can then be used to meet extra demand. But such arguments fail to acknowledge that the sheer scale of rising demand outstrips any of the savings that might be made.

A&E attendances have risen by almost 20% over the last fifteen years while referrals to out-patient services have risen by over 60%. The number of children in care has risen by 16% and the number of child protection plans by 60% in a decade. The number of people requiring residential or nursing care has risen by over 20% since 2005. It’s a similar story in most public services and the evidence suggests that the trend is only accelerating. You can’t meet such dramatic trends by cutting dividends to the shareholders of out-sourced firms or slicing out public sector waste through business-like efficiency

To meet this challenge, we really need two closely interlinked debates. The first is a realistic, honest national conversation about the funding model necessary to respond to rising demand. Austerity has not made meeting the challenge any easier but calling for an end to cuts is not enough. There are clearly much deeper, difficult questions to be asked of the British people about the right mix between taxation, personal payments and insurance.

The second debate is about how public services need to change radically to meet this challenge. Luckily, the beginnings of a new model is emerging from within public services themselves. It is one that emphasises early intervention over emergency crisis care. That means identifying and helping families before children need care. It means ceaselessly promoting public health so that the diabetes epidemic which threatens to overwhelm the NHS is stalled. It requires a fundamental shift towards prevention and away from cure in every area.

Such a change requires radical new ways of working employing advanced technology and data analysis, deep integration across the public sector, and often entirely different mindsets on the part of public service professionals. That explains why this new model also places a premium on freeing frontline staff and others to think radically and take decisions free of hierarchical management, rigid inspection regimes and centrally imposed targets.

Whether such changes are best delivered in-house or by external organisations is a colossal distraction. It is a shift in the funding and delivery models we use to provide services that will allow us to meet the challenge of rising demand – not whether the service is provided by staff employed by the state or by a private company.