Memorandum by Middlesbrough Council (PSR
1. What should be the principles guiding
the reform of public services?
It is apparent that the debate round Public
Private Partnerships has become polarised in a traditional public
vs private dichotomy. This may be because there are not enough
alternative models of service delivery available to providers/commissioners.
It should also be recognised that many public
services exist because private markets have failed to provide
for some of the most fundamental human needs in a civil society.
In that sense we agree with the NLGN recommendation
to move beyond the pragmatism of "what matters is what works".
This carries an implicit assumption that "what works"
really means "what works for the customer", but there
are problems with it.
An exclusively customer focus cannot cope with
the complexities of public service. What works for an individual
or small group may not work for the broader community. This is
particularly important in relatively deprived urban areas which
lack the social capital necessary to sustain effective and efficient
public services. Also, we may find that "what works"
is more than we can afford locally due to the constraints of national
So it must be more sensible to consider individuals
as citizens as this will encompass what people can contribute
to the well-being of their communities as well as what they receive
from the local state.
Finally, as it seems to be a paradigm for public
service that equilibrium cannot be achieved, the issue of rationing
as raised by NLGN and others becomes crucial. The only way to
resolve this in a democratic society is through a political process
but this should operate at or as close as possible to the point
of delivery and political decision making should be as inclusive
as possible through a concerted process of engagement. The modernisation
approach using LSP's and Community Strategies provides a potentially
strong vehicle for delivering this. NLGN assert that choice is
to some extent illusory in public service and the Local Government
White Paper "Strong Local LeadershipQuality Public
Services" (paragraph 3.79) accepts this. "Consumer choice
can also come from active participation in Council decisions on
the choice of provider". We would add that this choice also
extends to active participation in decisions about the rationing
of resources that govern the nature and level of local services
and not just who provides them. So if the main purpose of reform
is to ensure higher quality public services, Councils need to
reinvent themselves around the needs of citizens. The underlying
principles of the reform are those of good corporate governancetransparency,
inclusivity and accountability.
2. Does central government have clear principles
and an effective strategy for reforming public service? Does it
need to have a strategy at all, or is it better to let public
bodies make their own arrangements for improving services?
Evidence of clear principles and an effective
strategy are apparent in the Prime Ministerial and other political
level statements, but it is not clearly apparent that such principles
are being practiced. It is not conceivable that national policy
objectives can be met without the reform process being extended
to the machinery of central government itself and the central
local relationship. The culture of central government, its structure
and processes are not conducive to the development of clear and
effective national frameworks with which local delivery can be
affectedand by definition delivery can only be local. This
can be achieved without changing fundamentally the constitutional
relationship but it requires the same principles to be applied
at central government level. There are signs that changes are
being made but these are taking place in an atmosphere that does
not suggest rationalisation or urgency. The Local Government White
Paper's proposals for plan rationalisation and deregulation are
welcome but unconventional in nature and will not deliver outcomes
within time horizons that are likely to be politically acceptable.
The problems of central departmentalism must be addressed as a
priority and there must be a further principle that links local
accountability with the idea of local responsibility. The concept
of local community leadership is fine but it will always be constrained
if local leaders are accountable for issues for which they are
3. Do the devolved institutions and local
government have clear principles and effective strategies for
reforming public services? Could there be a role for strengthened
The answer to this question is inextricably
linked to the previous one. Clarity and effectiveness locally
is conditioned by the relationship with the centre. This will
also apply at a regional level if new or strengthened institutions
do not have the capacity (and accountability) for the functions
4. What would be the consequences if there
were significant differences between the policies adopted by central,
devolved, regional and local government on public service reform
We do not necessarily accept the premise of
the question. If the relationships between tiers of governance
are clarified in some form of constitutional settlement based
on a subsidiarity principle, the ability to achieve regional/local
variations would be a positive virtue given the current economic
and social imbalances between regions. This issue has not so far
caused major problems in relation to Scottish and Welsh devolution.
5. How do we know if public service reform
One of the problems with Best Value as it currently
operates is the insistence on achieving cross authority comparisons
but the sheer diversity of local conditions means that comparisons
between authorities that might appear to be similar are often
The central theme of Best Value is continuous
improvement and this should mean that the system allows Councils
to assess their current performance against their past performance
and, through a continued programme of engagement, communicate
with citizens about that performance. But this always has to be
done within a national framework that requires exclusively quantitative
data to allow ratings and tables to be produced.
The problem is (and this also applies to LPSA's)
that there is often a mismatch between data and perception (eg
fear of crime rising while actual crime is decreasing). It is
to be hoped that the new Best Value regime will admit the use
of more qualitative information as well as quantitative. So the
short answer is we will know if the public tell us it is succeeding
and that their views are evidenced through proper performance
6. Is the concept of a public service an
"Public Service" is not an anachronism
because markets fail and the state will always need to intervene
in the interests of social justice. However, the concept has to
be redefined away from a producer orientation at all levels of
governance and given a new focus around achieving outcomes for
individual citizens and society in general.
This does not mean that where state intervention
is deemed appropriate by the exercise of political judgements
that the state should always be the provider. However, it is the
absence of a broader range of delivery mechanisms that perennially
reduces the debate into the usual public/private dichotomy. A
greater degree of local experimentation than is currently allowed
for by the legal framework and the cultural imperatives of central
government is needed.
7. Is there a public service ethos, and how
can it be defined?
Although there is no real evidence of the "pure"
motivation of those of us who work in the public sector, it is
nevertheless likely that many of us would cite as reasons for
our choice of career as embracing some notion of social justice.
It is not however inconsistent to link this concern with a notion
more often associated with the private sectorthat of business
efficiency. This is a pragmatic basis for identifying a public
service ethos. But as recorded above the parallels with the private
sector do not extend to the range of incentives available to companies
for Councils to achieve better outcomes for their customers/citizens
and current proposals in the Local Government White Paper seem
weighted more in terms of penalties for failure than rewards for
success. The lack of a diverse range of service delivery mechanisms
that would allow "profits" to be retained in the public
sector in a serious constraint to developing such an ethos.
8. How is the public service ethos different
from the private (or voluntary) sector ethos?
We do not see that "ethos" needs to
be differentiated. Clearly companies are more driven by the profit
motive and shareholder accountability and there are more similarities
in the mission and roles of public and voluntary organisations.
The key issues and differences relate to the treatment of profits
and about what happens in the case of business failure. What is
most important in the case of Public-Private partnerships is a
shared understanding of the cultural differences between the partners
and an agreed plan to overcome such differences through training
9. Is a public service ethos necessarily
a good thing? Can it be an obstacle to the effective delivery
of services to the public?
A redefined public service ethos using the principles
of corporate governance, partnership, diversity and citizen focus
would be a positive virtue. If it were defined according to producer
interests (whoever the producers might be) then it would not and
could be an obstacle.
10. Would the creation of a single public
service help a public service ethos?
No, if diversity of provision is a desirable
outcome the ethos must extend to all involved in the production/delivery
process regardless of who employs them.
11. Is it possible for profit-oriented organisations
to maintain the public service ethos?
Yesit is imperative or they will not
profit in the long-term.
12. What measures, if any, need to be put
in place to ensure that the search for profit does not undermine
the public service ethos?
We do not necessarily believe that this is a
matter for legislation or regulation. However, extending the ability
of public sector bodies to trade and retain profits for investment
will encourage more innovative joint ventures. Legislation could
possibly allow for new forms of service delivery such as American
style public benefit companies.
13. Can lessons be learned from the experience
of private sector involvement in public services in other countries?
We do not doubt that foreign experience could
be valuable and we also suggest that lessons can be drawn from
the discretion afforded to local authorities in other countries
not only to enter into partnerships with the private sector but
also to trade more extensively on their strengths than is currently
envisaged in this country.
14. Do private sector people working in and
around government, including secondees, task force members and
others, undermine the public service ethos? Are special measures
needed to regulate their activities and prevent positive conflicts
We are not aware of evidence that would suggest
this. To the contrary their involvement may help to redefine the
public sector ethos. If the principles of corporate governance
are applied properly then their activities should be transparent.
15. Many companies are becoming increasingly
aware of social and ethical issues. Does this make them more suitable
for work in partnership with the public sector, or does it make
The bottom line is whether the private sector
partners can deliver the required outcomes, and we are still required
to treat cost as the major procurement criterion. However, social
and ethical awareness is an important cultural factor in ensuring
that PPP's actually work. As such it becomes increasingly important
The answer to Question 8 above is also relevant
16. Do the views, motivations and attitudes
of public sector workers differ from those in the private sector?
Does any difference in motivation have an effect on the delivery
of public services?
We do not believe it is possible to generate
in a way implied by the question. While it may well be that some
public sector workers have a different ethos, the important issue
is that staff should be highly motivated regardless of who their
employer is. This requires effective human resource and communications
strategies to ensure that front line staff understand and own
the mission and values of the organisation. In the case of private
sector partners it is crucial that the partner shares in the public
service objectives, is committed to the economic and social outcomes
desired by the Council and communicates this effectively to its
own employees. The outcome should be that recipients of the service
have no need to differentiate between service providers from different
17. There is conflicting evidence as to whether
the public is in favour of private sector involvement in public
services (MORI polling, June 2001). What in your view is the truth
about public attitudes?
We are convinced based on evidence from MORI
and others and our own researches that the public in general are
not concerned about the structures and processes of public service
provision. They are concerned with outcomes but they retain a
desire to be able to hold someone to account when things go wrong.
This makes it essential that the public sector should retain the
commissioning role, even if it is not providing services directly,
and should be able to hold all service providers to account through
a local system of representative democracy in a way that allows
citizens to be involved in ways that suit them.
18. If there are to be rules regulating private
sector involvement in public services should they apply also to,
for example, the voluntary sector? Should there be less stringent
regulation where profit is not involved?
We do not see this is necessary in a mixed economy
of provision. What is important is that anyone involved in public
service provision should be required to uphold the principles
and practices of corporate governance.
19. What kinds of accountability are most
As we are dealing with public services (defined
as public partly because they involve the expenditure of public
resources that are scarce), the broad answer is that accountability
should be through a process that is both democratic and political,
regardless of the method of provision. This is why public bodies
must retain the commissioning role and be able to publicly hold
to account the service provider. The new structures for local
government introduced by the Local Government Act 2000 provide
the framework of accountability and proposals in the new White
Paper will enhance this, particularly in relation to performance
management systems. However, in a system of representative democracy
that is increasingly based on principles of partnership, the ability
of citizens and stakeholders to share in the accountability process
is very important. This can come through a number of routes; the
Local Strategic Partnership, enhanced involvement in the Scrutiny
process, but also through more sophisticated forms of engagement.
The Partnership Engagement Framework adopted by Middlesborough
Council and its LSP partners is a comprehensive toolkit based
on the principle of fitness for purpose, which allows for much
deeper citizen involvement not only on issues of service delivery
but also on issues of policy and strategy development. This is
acknowledged as a key element of "choice" in the new
White Paper. We would be happy to provide further details on this
20. Is there sufficient coherence in the
accountability arrangements for public services?
The Partnership Engagement Framework mentioned
above, operating in the context of the LSP and the Community Strategy
and the new executive model of governance will we believe, provide
the framework for a much greater degree of coherence.
However, a major issue for us that is not addressed
in the White Paper is the degree to which other public sector
bodies can be made locally accountable through an LSP process
when their formal lines of accountability are to a Minister.
21. Is there too much accountability, or
It is very hard to make a generalised comment.
Rather, we would suggest that a principle of proportionality should
be applied taking into account the level of public expenditure
involved as well as local circumstances (as sometimes low cost
issues can become controversial). This suggests a further principle
that the accountability should be at or as close as possible to
the point of delivery.
22. Does the new pattern of public service
provision require new forms of accountability?
We believe that the framework of accountability
put in place by the 2000 Act should be tested before any judgements
are made about new forms of accountability.
23. In the Government's overall programme
of public service reform, is the need for accountability to Parliament
and to other bodies properly taken into account?
24. If the answer to the above question is
no, what measures should be put in place to ensure better accountability?
As a local authority we do not feel competent
to address these questions in detail. However, the differentiated
approach to accountability outlined above would clearly provide
for some accountability to Parliament mainly through the Select
25. Does the growth in private involvement
in public services threaten to reduce public accountability?
Not if the approach outlined above is adopted
and implemented rigorously.
26. Do the demands of commercial confidentiality
threaten the accountability of public services when the private
sector become involved?
There is a potential for commercial considerations
to blur public accountability and this cannot be addressed without
addressing the imperatives of company law.
This is partly why we would argue for changes
to company law to allow the introduction of Public Benefit Companies
and perhaps other mechanisms that might combine the advantages
of being able to operate as a company with the transparency and
accountability of a public body not governed by traditional shareholder
27. Does the Government's public services
reform programme have sufficient focus on users and consumers
of those services?
In principle a clear focus on users/consumers
cannot be doubted. But as the White Paper acknowledges the issue
of "choice" is difficult in many public services. An
exclusively consumer approach cannot deal effectively with these
issues for the reasons discussed earlier in this response. We
think that of necessity the focus should be more around the notion
of the citizen.
28. If not, how can the position of users
and consumers be strengthened?
It follows from the previous answer and the
answers to questions 19-26 that the issue of citizen choice is
as much about being involved in the setting of local priorities
and processes of local accountability. We believe that a local
approach to implementing the new national frameworks for local
public services will strengthen the position.
29. Should user rights be established in
relation to public services?
Such rights could only be established as statements
of principle and good practice, taking into account national priorities
and constraints and local circumstances. But they should be balanced
in a citizen focused culture (rather than a consumer focused one)
by a consideration of the responsibilities implied by the term
"citizen". Citizens would be expected for example to
take some responsibility for ensuring that public facilities are
30. If so, how could these rights be exercised
As above we believe that the new governance
framework should provide a positive environment for citizen/stakeholder
31. Could the Citizen's Charter/Service First
approach be further developed?
These initiatives or at least the principle
on which they are based could be replicated locally.
32. Are complaint/redress systems for public
service users adequate and effective?
Please see answer to question 30.