Growing need among local communities in the face of diminishing resources means local authorities are inevitably expected to do more for less. Now, more than ever, the limited cash available must be focused where it really matters; on delivering high quality frontline services and not on wasteful bureaucracy.
A recent poll by the Association for Public Service Excellence (APSE) for the TUC found that while almost all public sector managers think pressure on services has increased due to the recession, more than half expect cuts to their particular service. Efficiency savings of almost £6bn have been achieved already and the respondents see no room for further savings without impacting on standards.
So how can resources be most effectively channelled towards providing vital services upon which local residents rely?
This is the subject of today's debate at APSE's annual conference in Cardiff. A discussion of 'Models for future service delivery' brings together experts on commissioning, private sector provision and in-house approaches to improvement to hammer out which option offers the best way forward.
Any discussion of the future of public services must start by clarifying what we mean by commissioning, procurement, and outsourcing, which has become a blurred distinction.
Crucially, it must be recognised that commissioning is not the same as crude 'market testing'. Commissioning is a more subtle, well thought-through analysis of how services are designed, how precious resources are spent and what outcomes are required. Commissioning must also be about delivering continuous improvement in services. And, in my view, this is best achieved through an ongoing review process driven by elected members who are ultimately responsible to local people.
This ongoing review process requires performance to be constantly measured and challenged.
APSE has developed a 'Competitiveness Continuum' tool to enable local authorities to compare data on how their current delivery option is performing against other options – regardless of whether the provider is from the public, private or voluntary sector.
This enables choices to be made as to which are the most responsive, flexible, accountable and sustainable ways of delivering on the front line. It means councils are able to use hard facts in a straightforward way to decide if they wish to stick with their current service provider or pursue alternatives.
I believe that using objective data in such a way will prove that the best way of delivering excellent services is by using in-house teams in the vast majority of cases.
Prevailing orthodoxy has pushed councils to externalise, when, in fact, local government has more than enough talent to improve itself from within.
This has been demonstrated by our research on insourcing: the phenomenon of bringing previously externalised services in-house. Insourcing: a guide for local authorities bringing services back in-house, analysed the reasons behind the growing trend and benefits that have resulted in some 50 local authority examples.
Poor contractor perfromance
The most commonly cited reason for insourcing was poor contractor performance, with numerous cases of contractors unable to meet key targets. Low staff morale, due to poor terms and conditions and short-term contracts, also impacted upon quality of services.
By contrast, insourcing has allowed councils to: respond positively to changing policies; join up services at neighbourhood level; and meet strategic goals such as tackling climate change.
Paul O’Brien
Delivering services in-house can also be a way of boosting training and employment opportunities and bolstering local economies: APSE's study of the 'local economic footprint' of public services, with the Centre for Local Economic Strategies, showed that every £1 spent on direct services can generate £1.64 as a result of strong local employment and supply chains.
In-house delivery also enables councils to retain core capacity to provide key services, instead of the so called 'public service industry' becoming purely a sellers' market.
Most importantly, direct public employment helps focus resources on the services themselves by avoiding unnecessary management transactions, procurement costs and being flexible in adapting to a rapidly changing environment rather being locked into long-term contractual arrangements.
In short, direct delivery by in-house teams is the best way to ensure increasingly scarce resources are directed at frontline service delivery and have the maximum impact on local economies and local people.
Compulsory competitive tendering process
Getting rid of the compulsory competitive tendering process in the late 1990s helped client and contractor functions to be integrated, which shifted tens of millions of pounds from bureaucracy to delivery. Services users' increased satisfaction that followed has been well documented. In such tough times, we must build upon this progress, not put convoluted new mechanisms in place that divert time, money and energy from provision of top quality services.
Paul O'Brien is chief executive of the Association for Public Service Excellence (APSE)
