Public: Policy | Public

The feeling's mutual: co-producers of services

Thu, 11 Mar 2010 15:04:07 GMT

All the talk is of mutuals being the way forward for public services. Tory leader David Cameron is a champion of the idea, and there is interest from local government services - but how would they work?

If David Cameron becomes prime minister, he plans to "unleash a new culture of public sector enterprise".

The Conservatives will give public sector workers such as teachers, nurses and social workers and service users the right to form co-operatives to run public services. The new managers would decide how they were run – within minimum national standards.

The twin objectives of reducing public sector debt and reconnecting with citizens increasingly disillusioned by current power structures could spawn some interesting new models for public service delivery.

Lambeth council has already announced plans to become a "co-operative" council. Residents who help run services would get council tax rebates. Lambeth hopes the scheme, based on the John Lewis partnership business model, will save about £30m.

How would it work?

Mutual models could take a variety of legal forms. They could be true co-operatives, established as companies limited by guarantee or industrial and provident societies, where members derive benefit from the venture's economic success.

Alternatively, they could be wholly non-profit distributing vehicles established in the public interest, such as community interest companies or even charitable companies. Civil servants are very attracted to models where citizens would become "co-producers" of services, to reduce costs and improve outcomes.

Growing interest

There is now growing interest from local government services, such as education support services, leisure, cultural services and libraries, as well as from health and social care.

Many managers are attracted by having more control over their own destinies and shaping the direction of their services. Often the services may be seen currently as "non-core" to the public sector host and, by gaining a degree of independence, access to new funding streams and selling their services into wider markets, they may be able to achieve a more sustainable future.

The 'right to request' in health

The Department of Health has encouraged the creation of social enterprises in primary health and social care since 2006. Lord Darzi provided new impetus when he promised frontline staff the "right to request" to set up a social enterprise in his 2008 review.

These organisations were supposed to be the 'disruptive innovators' who would reform the system from within. Progress to date in building scale from these models has been slow.

Our research shows there are essentially three reasons for this. First, there are often powerful vested interests in senior management who simply oppose large swaths of their service empire disappearing.

Yet, under the current process, senior management support must be secured to allow services to float off. Tactics as basic as stopping items from reaching a primary care trust board agenda can be used to halt progress. Some people have even been put through disciplinary hearings for daring to go behind the board's back. Without a powerful independent champion, it may be difficult to gain momentum.

Secondly, there is a shortage of early-stage working capital to support the fledgling enterprises in the initial start-up phase. However, once a contract has been secured, lenders will be keen to support enterprises with often very significant turnover.

Thirdly, the commissioning and tendering process to gain contracts is too cumbersome. Tender documents and contracts are often not fit for purpose and try to load too much risk onto fledgling providers. Outside providers find it difficult to compete on a level playing field. The current debacle over Andy Burnham's announcement that the NHS in-house team should be the 'preferred provider' has magnified the problem.

No one should underestimate the hard slog the 'disruptive innovators' face to launch new enterprises. It is a rollercoaster for some to navigate the bureaucracy to gain approval to spin out and persuade staff to make the jump, faced with union opposition on pension rights, which is often spun unfavourably. They need a unique blend of skills: a mission driven-zeal combined with a strong commercial nous and an appetite for risk. Exercising the 'right to request' requires nerves of steel and a strong determination to succeed. These pioneers will be a rare breed indeed.

Mark Johnson is managing director of specialist public services law firm TPP Law

Improvement in nation's health

Thu, 11 Mar 2010 13:44:24 GMT

Public health has improved but inequalities remain despite billions of pounds invested, a new Audit Commission report reveals

A new Audit Commission briefing, Healthy Balance, published today examines the progress on improving health and reducing health inequalities in England and where the money has been spent.

The Commission estimates that the NHS allocated £21bn to primary care trusts (PCTs) in In 2009-10 to reflect differences in health inequalities.

Overall health improvements include cuts in infant mortality and increases in life expectancy. But they have coincided with a widening gap between the poor and the better off.

Among its conclusions, the Commission suggests there may have been too much policy and guidance for PCTs and local authorities to keep up with.

Andy McKeon, the Audit Commission's Managing Director, Health, said: 'We know the health of the nation is improving. But variation in the health of people living in different parts of the country remains stark. Comparisons can be striking. While teenage pregnancy drops by 38% in one town, it rises by 14% in a neighbouring town.

"Billions are directed to deprived areas. But it is not always clear how much has actually been spent on reducing health inequalities, and what the impact of this or that programme has been. Progress is often disappointing."

He said the Audit Commission wanted to open discussions on some fundamental questions about improving the nation's health and tackling health inequalities because public spending will be more constrained in the years ahead.

The new Oneplace website shows public health outcomes across England.

Council managers: can do, must do, will do

Wed, 10 Mar 2010 15:38:47 GMT

A survey of senior council managers has revealed that despite financial and social challenges, local authorities remain bullish about the future and are being creative with IT solutions as they strive to deliver 'more for less'

Despite expectations for overall budget and staff cuts, there is nevertheless a clear 'can do' mindset in Britain's local authorities towards reshaping their activities in order to achieve improved services built around the individual - and to deliver 'more with less'.

This upbeat assessment comes from a survey of 100 senior council managers attending Civica's recent annual conference in Manchester. Despite the current financial and social challenges to local authority services and flexibility, it is clear that there is still plenty of scope for savings for service delivery improvements through greater exploitations of technology.

Nearly 60% of those surveyed indicated IT remains a "key investment area" for 2010 in order to deliver critical service improvements.

Square the circle

Different pressures on local organisations to 'square the circle' are highlighted in the key priorities identified by our delegates. These include sustaining service levels and delivering improvements in service performance and efficiency, as well as protecting local communities through to economic recovery - further evidence that local government managers are doing their utmost to balance targets with meeting their community needs.

While nearly half of managers interviewed (47%) expect spending cuts, councils are adopting a range of operational strategies in response to such pressures. One third of delegates said they were re-engineering workflow processes, which suggests strongly that there is still considerable opportunity to remove duplication and stream line business processes, supported by modern IT systems, The mobilisation of local authorities' workforce continues - nearly a third (31%) said that greater use of mobile and flexible working is a key strategy.

Perhaps most encouraging, authorities appear to be planning to work more closely with their neighbours and other partners. One quarter of those interviewed said use of shared services was a key lever within the current climate.

Senior local authority managers are closely watching the performance of innovations that might support their citizen-centric services in the future. Nearly two thirds of respondents think that the data.gov website will influence community services in some way. One third (33%) believe that it will help councils identify demand for specific services. Almost as many (29%) say it will drive local authorities to improve their service levels.

Organisational change

Perhaps the greatest long-term significance for councils' performance came with the delegates' recognition that organisational change is the most critical factor in local government transformation and cost reduction process. This was recognised by more than 40% of delegates - up from 33% at our 2009 conference. It was significant, too, that only 25% of interviewees believe that the so-called 'easyCouncil' approach to running a local authority would be appropriate. Personnel buy-in is preferred to risky radical change.

The quiet confidence of local government over its ability to deliver continued efficiencies and change is both striking and encouraging. Our council managers still believe that effective change and greater productivity will come from within, by modernising and streamlining the delivery of their local services.

David Roots is managing director, local government & regulated markets, Civica

Property: government adopts a professional approach

Wed, 10 Mar 2010 12:40:17 GMT

This week the government's launched its property asset management with a vice admiral at the helm to steer it through the choppy waters currently lapping at Whitehall's shore

Among its objectives of saving money the government hopes to drastically reduce the cost of running its estate. But as well as talking the talk it has to walk the walk and a new campaign has been launched to ensure that Whitehall departments have all the relevant skills in place.

The launch, under the auspices of the Office of Government Commerce, an independent office of the Treasury, also helps to clarify the role of the "head of the asset management profession", a newly created position to which Vice Admiral Tim Laurence was appointed last summer.

Laurence launched the initiative this week explaining that its aim is to identify and build the skills needed to support the delivery of the government's high performing property strategy.

That in its turn aims to reduce the annual running costs of the government's £30bn estate by up to £1.3bn before 2013.

The OGC says that the approach mirrors methods it adopted to build the government's procurement programme and project management professions.

As well as publishing best practice guidance and developing a competency framework the campaign will establish a professional community within government.

Laurence commented that a key objective of the new profession is to build a sense of community. He added that the "pan-government" campaign will "help develop our identity and our role in managing government's property assets to meet business objectives."

A census is being conducted across the civil service to establish definitions for the profession and support the recruitment of professional membership in order to encourage membership of this community.

The launch also included an open invitation to "public sector individuals" registering an interest in joining the government's property asset management profession to contact the OGC service desk.

As part of the campaign the OGC simultaneously published guidance on the operation of the Property Asset Management Capability Assessment Model (PAMCAM). This is described as a self-assessment tool that will highlight shortfalls in skills and capabilities.

The Royal Institution of Chartered Surveyors (RICS) is working with OGC to develop best practice standards, guidance, training and qualifications.

Right to Control: Trailblazer councils test disabled access

Jane Dudman — Wed, 10 Mar 2010 09:08:00 GMT

More choice and more control over services will give disabled people a more personalised support by integrating areas such as housing, employment and community care

The way disabled people access government services has taken a step towards integration, with the announcement of eight 'Trailblazer' local authorities that will test the new Right to Control policy.

Right to Control aims to give disabled people more choice and control over the services they receive and is seen as a major step towards the government target of achieving disability equality by 2025.

The policy has involved intense negotiation between different central departments to enable local authorities to provide personalised support for disabled people, by integrating different services, including housing, employment and community care - but not health.

Personalised budgets for healthcare

Jonathan Shaw, minister for disabled people, said that the health bill going through parliament will be an opportunity to look at personalised budgets for healthcare, but added that identifying funding streams within devolved health budgets is more challenging than identifying the budgets for social care and access to work. "We will do the health pilots and see if it is possible to align them to the Right to Control areas," he commented. "But this is the direction of travel and the 'Trailblazer' areas will give us good and important lessons as to how to shape future policy."

He added that it will be important to develop sustainable funding for user-led organisation that are going to provide advocacy and support for disabled people.

The eight Trailblazer areas that will test the new arrangements include Greater Manchester, Leicester, the London borough of Barnet and Essex county council. James Wilson, programme manager for Right to Control at Essex county council, says the programme will, for the first time, enable disabled people to combine money from different state funding streams, as a cash payment, to be spent on whatever they think most appropriate for their needs.

"This really gives us the opportunity to take our personalisation agenda to the next stage," comments Wilson. "We have a vision in Essex to move to an approach that includes all public sector organisations, not just the council, and this will be the catalyse to do some of that change."

More tailored services

The services will include most of the main funding for disabled people's services, says Wilson, although it will not include disability living allowance, attendance allowance, employment support allowance or health funding. Despite this, it will enable people to arrange more tailored services, or to buy equipment they need and has been warmly welcomed by disabled people's organisations.

Richard Watts, director of policy and development at the Essex Coalition of Disabled People, said the new policy is "incredibly important" as a natural extension of moves towards more personalised services, particularly in its inclusion not just of social care services, but also employment and education. He said the long term aim would be to include health funding as well. "But we know this is a really innovatory way for statutory authorities to work," he said. "It is a really good first step to integrating services around individuals' lives."

One example could be that if someone is assessed as qualifying for a disabled facilities grant, a local authority may authorise funding for a stairlift and an upstairs shower. "Under Right to Control, the user will have the cash equivalent, to which they could contribute a bit of their own money and could, for instance, build an extension downstairs, using builders they know and trust, rather than those used by the local authority," explained Watts.

Essex is hoping to develop a single, integrated way of assessing disabled people's needs, rather than individuals having to fill out different forms for each type of funding.

Last month, the Office for Disability Issues launched a consultation, which will run until mid-May, on the regulations that govern the Right to Control Trailblazers.

Jane Dudman

Nudge, nudge, say no more

Tue, 09 Mar 2010 12:53:00 GMT

Shadow chancellor George Osborne wants to embed 'behavioural economics' throughout government. This says that policy-makers should 'nudge' people to make particular choices

So, if government wants people to save to avoid a looming pension crisis, then it should automatically enrol them into a pension scheme. This is a feature of the forthcoming personal pension accounts, and nudging is being explored in places such as Barnet for council services.

Nudging is undeniably attractive for policy-makers searching for how to make smarter use of public spending. But nudging is not a quick fix and should only be seen as part of a broader approach to tackle policy challenges.

The US academics Richard Thaler and Cass Sunstein popularised behavioural economics in their book Nudge, and Thaler is now an adviser to the Conservative party.

Behavioural economics

Behavioural economics suggests that people are not simply the rational choosers of standard economics. Instead, people are thought to be shaped more by habit, inertia, and social norms. This view questions some existing approaches to policy. If people are inert and driven by habit then we might expect that formal education and information to have a limited effect on behaviour.

More emphasis should be placed on the way that institutions and policy guide the choices that we make: the so-called 'choice architecture'.

But how valid is nudge theory? I have been reviewing this as part of an Economic and Social Research Council project looking at 'asset-based welfare', that is the Child Trust Fund and Saving Gateway.

Behavioural economics assumes that government knows best. But often this may not be the case. For good reason, government might find it difficult to unpick the different parts of a policy problem, leaving aside any moral qualms we might have about pushing citizens in specific directions. Furthermore, government might lack proper evidence to guide its decisions. Government might only know the right nudges in a limited number of areas where there is plenty of evidence.

Going beyond nudging

Even if policy-makers can decide on the right nudges, citizens still have to make choices. Thus nudging still means it is important to consider the help and support people may need to make choices. This means going beyond nudging. If people are defaulted into a particular savings scheme, then there is still a need to consider what types of support should be made available for those who decide they want to contract out.

However, nudging is not a catch-all solution. It is one of a series of approaches that may be useful for policy-makers. The challenge then is to see how nudges can combine with more conventional policy approaches.

Take efforts to boost saving to provide security in retirement. A behavioural approach might highlight the role of institutions such as automatic enrolment as a way of encouraging people to save. But, this should exist alongside the continuing importance of public spending on the state pension as well as financial education.

Relying on nudges alone is not enough. As with most shiny new toys, the gloss comes off once you take it out of the packet and start playing with it.

Dr Rajiv Prabhakar, a Lecturer at the Open University and fellow at the LSE

Efficiency savings: are they simply cuts in disguise?

Tue, 09 Mar 2010 11:19:17 GMT

Very few of the government's much-vaunted 'efficiency savings' can be justified by hard evidence, experts say. As a result, they may actually harm services

The pressure on local bodies to run services better and save money is constant, and growing. But when councils and other agencies start changing services to achieve so-called 'efficiency savings', how can they be sure they are doing the right thing?

Experts are increasingly worried that many programmes have little evidence to suggest they will work, and are not being assessed in the right way. As a result, they warn, changes may simply result in worse services and fewer people being helped.

Eilis Lawlor, a researcher at the New Economics Foundation (Nef), wrote a report in 2008 looking at the pressure on childcare providers to work more efficiently. "What seemed to be happening," she says, "is that this really translates into cuts.

"The idea is that they will reduce back-office functions and let go of administrative staff, but in reality, what people [at councils] were experiencing was greater pressure on unit costs – the cost of services they were commissioning – and passing on the cuts to providers."

Little systematic checking

The heart of the problem, she says, is that there's little systematic checking, after the fact, of which changes have really made services more efficient and which have simply cut them back.

Cheryl Hopkins, Birmingham city council's commissioner of children's services, agrees. "A lot of the government initiatives that are rolled out, number one aren't evidence-based, and number two, have no cost-benefit analysis assigned to them" she says.

For a different point of view, Hopkins and her colleagues are looking overseas – in particular, to a man called Steve Aos, who works for the Washington state government in the US. He helps run the state's institute for public policy, an agency dedicated to testing the effectiveness of supposedly 'evidence-based' programmes.

Aos takes a tough line on the claims made for many schemes. Taking crime reduction as an example, he says he has no time for studies that simply look at how much crime individuals commit before and after they go through a particular programme.

"Too many other things can cause changes in someone's offending behaviour. We throw out that kind of study," he says. Unless the evaluation compares one programme against another, replicating the scientific standard of a randomised, controlled test, "we don't even consider that real research ... we don't go there."

Aos is only slightly more enthusiastic about research carried out in the "rarefied" setting of academia. Such programmes tend to be run by highly motivated individuals with a level of ability that can't be replicated "in the normal labour market" – and so he discounts their predicted benefits by 50%. (That does make some researchers "angry". But he has a thick skin, he says.)

Programmes have to be monitored once underway, too. Aos cites a Washington State programme that aimed to reduce juvenile violence through therapy. The therapists following the programme's instructions "by the book" got the expected results, he says.

"But the ones doing something else were not getting the expected effect. When you looked at the whole thing, the effects cancelled out and it looked like it was achieving nothing."

Lawlor says the UK has no equivalent of Aos's work. "Some [agencies] do, but it's more sporadic and it is not done in a systematic way." She cautions, however, that his work is "quite a narrow" cost-benefit analysis focussed on whether programmes save money.

Measuring outputs

"The problem with measuring outputs is [often] you are measuring something that's irrelevant or perverse," Lawlor says. For instance, if GP workloads fall, it is often seen as a sign that people are becoming healthier.

"Actually, it could mean they have completely disengaged from the system and have become homeless and that's why they are not accessing the GP services. It [measuring outputs] is telling you things have changed. It doesn't tell you things have improved."

In response, Nef has developed a measure called the social return on investment, which rates programmes on harder to define outcomes, such as the health benefit of keeping people in work. Charities use it, but as yet few councils do.

Hopkins says Birmingham is now carrying out its own randomised tests on, for instance, community-based justice programmes. The council wants to set up a dedicated unit, modelled on Aos's, to carry out such scrutiny.

There's even a chance it could host a national centre for evaluating public programmes, which the Conservative social justice spokesman, Iain Duncan Smith, has indicated he would like to set up if the Tories win power at the next election.

Unless these moves towards better measurement become more widespread, efficiency programmes remain "a blunt instrument", Lawlor says.

"There's a lot of public services that don't work, but at the moment we don't have a clear enough sense of which ones do and which ones don't. Any cuts will just be removing the good with the bad."

Reach Higher for more equality on local councils

Mon, 08 Mar 2010 13:29:10 GMT

Reach Higher is a new initiative aimed at representing more black and ethnic minority staff at senior management level in local government. Simon Ighofose, the first black voluntary director in Leicester city council, explains its mandate

Workforce diversity needs a higher profile if it is to be considered as a priority by local authorities and translated into serious action that will drive out inequality in the workplace.

I was the first black voluntary director in Leicester city council. Working with colleagues in the council's black workers groups, equality forums and senior management teams, we developed the Reach Higher programme, which is helping address under-representation at a senior management level within the council.

A rolling annual programme selects eight black and ethnic minority (BME) staff to attend the council's most senior decision-making boards as voluntary directors. Each candidate is expected to contribute to and inform strategic discussions from their perspective, using their understanding of the situation.

In addition, Reach Higher provides a wrap-around support programme, utilising mentoring and training to develop management competencies in areas identified by a 360-degree survey conducted at the outset.

The survey also serves as a baseline against which individual performance can be assessed. The annual cost of implementing the programme equates to approximately £2,500 for training and 20 days participation per candidate.

A second phase of Reach Higher will see the current pilots, targeting middle-managers, rolled out across the organisation.

Once implemented, this will create up to 21 further opportunities for candidates to attend divisional management meetings as voluntary heads of service, again supported by mentoring and training.

Compete successfully on merit for middle and senior management posts

Reach Higher will continue to develop, empower and grow a pool of BME staff that can inform as well as challenge the quality of service planning and implementation across all parts of the council. We hope that this in turn will increase the likelihood that candidates from this home-grown BME management talent pool will compete successfully on merit for middle and senior management posts as they become available through recruitment.

The programme has been championed from the outset by Sheila Lock, the council's chief executive. It has received unanimous cross-party support from all the council's elected members.

Unlock, tap into and focus talent

The process of developing Reach Higher has helped unlock, tap into and focus talent, passion and capacity latent among BME staff, many of whom now advise and help council divisions implement positive action aimed at delivering a workforce that at every level of the organisation reflects the local population.

On its own however, the Reach Higher programme is not enough. Targets around workforce diversity are also required because competing priorities place great pressure on local authorities to allocate sufficient resources to deliver a workforce that, at every level, reflects the local population.

In developing the next phase of Reach Higher, we are looking into the possibility of creating Reach Higher apprenticeships in middle and senior management. This would seek to further develop managerial competencies among BME staff by supporting them to take on greater budget and management responsibilities.

Reach Higher is designed as a positive action initiative and as such, future phases of the programme will seek to tackle under-representation of other equality groups.

Simon Ighofose is chair of the Regeneration & Culture Black Workers Group at Leicester city council

• More information about the Reach Higher programme is available from his website

Civil service strike: walkout begins

Mon, 08 Mar 2010 11:33:38 GMT

Up to 270,000 civil servants, including House of Commons security staff, are expected to join a two-day strike called by the PCS union as a protest against changes to redundancy payments

Civil Servants in Leicestershire and Somerset have joined the two-day strike called today by the Public and Commercial Services union in response to plans by the government to cut redundancy payments.

As more and more regions joined the protest a spokesman claimed that the "vast majority" of its members will support the walkout.

Up to 270,000 civil servants are expected to join the protest nationwide that threatens to cause disruption in government regional offices, jobcentres, courts, call centres and Whitehall departments. The strike is also expected to affect parliament, where House of Commons security staff are due to stop work for the first time in 25 years.

Mark Serwotka, the union's general secretary, said there was "incredible anger" about the proposed changes. Membership had grown since the strikes were announced last month, he said.

"Civil servants face losing up to a third of their entitlements and tens of thousands of pounds if they are forced out of their job. The government is tearing up the contracts of low-paid civil and public servants whilst it claims it can do nothing about bankers' bonuses because of contractual obligations," he said.

The government has spent 18 months negotiating the changes, which will cap redundancy payments for those earning more than £30,000 a year at twice their annual salary. Five other civil service unions have accepted the deal, which will save £500m over three years.

Tessa Jowell, the Cabinet Office minister, said the government had already agreed that civil servants earning less than £30,000 – 80% of the total – will still qualify for redundancy worth up to three years' salary. "This package brings the civil service more into line with the rest of the public sector and still offers more generous terms than much of the private sector," she said.

Quangos: back in the firing line

Nick Huber — Mon, 08 Mar 2010 10:52:55 GMT

There may not be the predicted 'bonfire of the quangos', but they are in for a bumpy ride and a overhaul, which ever party wins the next election. Those that do survive may find themselves merged with others or brought back under central control

As politicians fine tune plans for public spending cuts in the run up to the general election, quango leaders could be forgiven for feeling that they have a big target sign on their backs.

Quasi-autonomous non-governmental organisations, which deliver services ranging from nuclear commissioning and teacher training to arts grants and national savings, have long been accused of creating unnecessary bureaucracy and being unaccountable.

Now they are under the spotlight again, as political parties hunt for areas to save money.

Both Labour and the Conservative parties have announced plans to cut the UK's 750-or-so quangos, which spent £46.5bn in 2008/9. In December, prime minister Gordon Brown announced plans to abolish or merge more than 120 quangos.

Speaking last week at a conference on the future of quangos (Public Bodies 2010), Francis Maude, shadow minister for the Cabinet Office, told public sector managers that a Tory government would want to come to "fairly rapid conclusions" about the future of quangos.

Tory review

A Tory review would decide which quangos should be scrapped and which could be bought back within government departments, in order to make them directly accountable to ministers, Maude said.

The Conservative party has said it will decide the fate of quangos based on a three-point criteria, including whether the quango is politically impartial and whether it is "transparent", allowing important facts, such as national statistics, to be presented clearly.

At the same conference, the Institute for Government, an independent charity aimed helping improve government effectiveness, revealed some provisional early findings from its research into quangos.

One of the biggest challenges facing quango managers is a lack of clarity over quango roles and responsibilities, and their relationship with government department "sponsors" who fund them, said Tom Gash, a fellow at the Institute.

"In many cases government departments treat Arms Length Bodies (ALBs) rather differently," he said. "We found entire policy functions duplicated across ALBs and government departments."

The Institute revealed a series of draft recommendations including: "light touch" reviews of quangos every two to five years; having a "sunset" clause for some quangos, requiring their functions to be renewed; and requiring politicians to prepare a business case when planning a new quango and present it to Parliament.

How can quango leaders help safeguard the future of their organisation (and keep their own job)?

Flexible and positive

Matthew Flinders, a politics professor at the University of Sheffield and an expert on public sector reform, advised quango heads to justify what they do on a single piece of paper, focusing on where their service gives "added value. Quango leaders should be "flexible and positive", he said, presenting minister and civil servants with different possible options for reform.

Flinders was relatively upbeat about quangos' prospects. He said that moves towards a "smarter state" will probably mean some quangos will merge and become more streamlined, but Flinders predicted that there would not be a "bonfire of quangos".

Whatever the scale of reform, it is important to learn from previous quango culls, according to Lord Warner, a former health minister from 2003 to 2006 who oversaw a review of health "Arms Length Bodies" (ALBs), which helped reduce the number of health ALBs from 38 in 2004 to 20 in 2009.

Managers overseeing a quango overhaul need their political bosses to go public about the plans in order to reduce the "risk of departmental backsliding and Sir Humphrey manoeuvring," Warner told delegates.

In addition, the reasons for cutting quangos, and the benefits to the public, need to be explained in order to avoid looking like an "unguided axman" Warner said.

Quango managers are in for a bumpy ride, whatever the result of the next election. Quangos are a tempting target for cuts, and there is confusion over their exact number, powers and relationship to government departments.

One delegate at the 2010 conference asked Maude what life will be like for quango managers under a Conservative government. "Pretty fraught," quipped Maude to slightly nervous laughter from the audience.

Nick Huber

Per diems: women can earn more in local government

Thu, 04 Mar 2010 11:26:20 GMT

Inequality in pay between women and men has been much cause for debate in recent months, but one area where females fare better is local government interim management, says a new study

A recuruitment agency has found that female interim managers earn, on average, 7% less than men - except in local government and education.

Local government and education are the two sectors that buck an overall trend tracked by specialist recruitment agency Russam GMS. In local government, women earned £540.50 a day, compared with £512.50 for men, while in education, women earned £678 and men £630.

In all other sectors, both private and public, the survey by the agency revealed that women are still lagging behind men on pay. On average, across all sectors, women interim managers are paid £553 a day, compared with an average daily rate for men of £592.

In the NHS, male interim managers earn £630 a day, on average, compared to £515 a day for women, while in charities and non-profit organisations, male interim managers earned a day rate of £537.50, compared to £466.50 for women.

The survey offers little clue as to why the rates for men and women should still differ in this way. It is not to do with unwillingness to negotiate rates. Almost the same numbers of women and men in the survey - just under half - say they "often" negotiate their rates.

Only 3% of men and 4% of women say they never negotiate rates.

Consultancy: look at the benefits as well as the cost

Thu, 04 Mar 2010 09:38:00 GMT

Consultancy fees are often the focus of discussion, especially when public sector managers have to be accountable for every penny they spend. A new comprehensive report from the Management Consultation Association claims the industry is delivering 'significant value' to its clients

The use of management consultancy is accepted business practice in many sectors. The UK industry, recently described by a government-sponsored report as a 'world leader', generated fee income of around £9bn in 2008; there is clearly considerable demand for consulting services.

But the focus of public discussion continues to be on the cost of consultancy; there is very little research or analysis that identifies and quantifies the value that this spending generates – either for individual clients or the economy as a whole.

This matters for the public sector especially. Without a deep understanding of the return on the investment, how can public sector managers know whether they are spending wisely on consulting? And how can politicians take sensible decisions about the appropriate level of spending on consultants if they are looking at only one side of the equation?

This week, the Management Consultancies Association (MCA) addresses this gap in a new report, The Value of Consulting. We have based our conclusions on research into 1,800 consulting projects and in-depth interviews with 30 clients. We don't claim that this is the last word on the subject; but our findings strongly suggest that the UK consulting industry is delivering significant value to its clients.

To assess this value we first collated the results of the largest ever survey of client satisfaction levels with consultancy projects. A large proportion of clients say that they are satisfied or very satisfied with the work carried out by their consultants.

Project delivery

Second, we built a model which indicated that the contribution of consultants comes in three parts: the specialist knowledge that helps clients take better decisions; their experience in project delivery that helps clients execute plans more effectively and efficiently; and the skills of individual consultants that improve the capability and team of managers in client organisations.

Based on this model, we then asked clients in detailed interviews to judge how much value they gained from consultancy projects. We were careful only to ask them about the return in the first year.

Very satisfied clients reported that this is a multiple of the fees that they spent, estimating that it ranged from around twice to 20 times the cost, with most grouped around the midpoint.

Assuming an average of 10 times the fees paid, and taking account of other projects where value is equivalent to price, this suggests that the benefits provided by consultancies are equivalent in value to around £56bn to UK clients, a return of £6 for every £1 spent.

This way of thinking about consultancy will help consultancies to engage in the sort of dialogue they need to have with their clients. It will help clients to be intelligent and demanding customers.

And, second, it will help re-balance and re-shape the conversation we have as a country about consulting. We should look at the benefits as well as the costs, and think of the value as well as the price.

Many clients already do this when they plan, commission and review their work with consultants. The public sector more generally should follow their lead.

Significant savings for the taxpayer

After all, management consultancy will be a big part of the solution to the country's problems with the public sector finances. Consultancy can – and does - deliver significant savings for the taxpayer, along with major improvements in public services. Any arbitrary decision to reduce the use of consultancy could easily lead to the public sector paying a far bigger price in lost opportunities and higher expenditure over all.

Too many discussions of consultancy begin and end with the assumption that it is just a cost. A 'smart' government would see that it is also an investment which can deliver excellent returns.

Alan Leaman is chief executive of Management Consultancies Association

Co-operatives: Something old, something borrowed, something blue?

Wed, 03 Mar 2010 09:35:00 GMT

Are the Conservatives attempting to steal Labour's clothes with new initiatives that encourage third sector organisations to take over services usually delivered by the state - or have they got a new trick up their sleeves?

When David Cameron announced the new Conservative plans to transform the public sector by allowing public servants "to become their own boss" the well-informed readership of Public might have asked themselves whether the Conservatives have been paying attention.

What he appeared to be announcing was something that was already government policy. There have already been numerous initiatives to encourage third sector organisations (charities and other not-for profit- social enterprises) to take over services traditionally delivered by the state.

In particular "the right to request" was launched in 2008 to give NHS staff the ability to create social enterprise businesses to deliver healthcare services to NHS patients. There is even a sponsoring department within the Cabinet Office, the Office for the Third Sector, that exists to make this sort of thing happen.

An uncharitable view might be that the Conservatives are deliberately attempting to steal Labour's clothes. But in fact the Conservatives' proposal is different in one key way: the Conservatives see the delivery vehicle being workers' co-operatives, rather than charities or quasi-charitable social enterprises.

In theory it is easy to distinguish these two types of organisations. Workers' cooperatives are run on mutual principles primarily for the benefit of workers. Social enterprises are set up primarily to benefit the community.

Public benefits

But in practice this distinction is often blurred. Workers' co-operatives can and often do provide public benefits – indeed the International Co-operative Alliance's statement of co-operative principles emphasises ethical values that include social responsibility, caring for others and concern for the community.

Social benefit organisations generally show concern to provide good working conditions and job satisfaction for workers. Given also that the same legal formats (industrial and provident societies and companies limited by guarantee) are commonly used for both purposes, it is little wonder that it is sometimes difficult to tell apart these two modes of organisation.

Even so the distinction is important. The policy ramifications of giving the conduct of public services to an organisation that is set up in the interests of its workers are significant. How do you specify service standards without creating the bureaucracy that this is designed to avoid?

How far, and for how long, can you justify outsourcing a service without undertaking a tender competition?

Often outsourcing to social benefit organisations has required grant funding. Can you justify this as easily for an organisation set up to benefit its workers?

How will insurance be dealt with – can the organisation shield behind government self-insurance?

Pensions

Pensions will be key to this as employees are unlikely to volunteer in droves to leave state-backed schemes. The NHS scheme allows former NHS employees of third sector organisations who exclusively perform NHS contracts to continue in the NHS scheme. Additional protections may be needed if the organisations are worker controlled with no protection for a public benefit mission.

It may also be that something is needed beyond TUPE (the regulations that protect a transferring worker's terms and conditions) to persuade workers that this does not prejudice job security, and if the deal is that the workers benefit if the service goes well but are protected if it goes badly we are into the area of moral hazard.

These issues all arise when contracting with third sector organisations to deliver public services, but the more the organisation is recognisably set up to benefit its workers rather than society, the more difficult it is to justify treating the arrangements differently from a commercial outsourcing.

If the Conservatives are elected and start to grapple with these issues, we can expect to see the policy justification start to emphasise the public benefit more and the advantages of workers becoming their own bosses less, and some of the distinctiveness of the Conservative policy may be lost. But it is only after the details are worked out that we will be able to see whether this "blue" policy looks like something borrowed or something new.

Nicholas Thompsell is a partner at Field Fisher Waterhouse LLP

Government reports: file under 'ignore'

Tue, 02 Mar 2010 14:19:21 GMT

Reports commissioned, recommendations ignored, has been a consistent theme throughout Labour's tenure, writes Eifion Rees, so will a new government or a coalition be any different?

As the Winter Olympics packs up in Vancouver, the Olympic torch begins its journey to ... Paris?

This may well have been the story had the government listened to its own experts. In December 2002, the Game Plan report, commissioned by the culture, media and sport department and signed off by then-prime minister Tony Blair, concluded that a successful Olympic bid would produce no lasting benefits for the capital.

It has become a familiar pattern over Labour's 13 years in power. The government commissions reports, the report's authors make recommendations, the government welcomes those recommendations – and for the most part ignores them.

Examples include Kate Barker's review of housing in 2004; a Home Office white paper on 24-hour drinking in 2005; the Crosby report on ID cards in 2008; and Ed Gallagher's damning biofuels review that same year.

Drugs tsar David Nutt

Another example was drugs tsar David Nutt, sacked as the head of the Advisory Council on the misuse of Drugs in 2009 – three months after a Commons Innovation, Universities, Science and Skills Committee (CIUSSC) report suggested scientific advisers should name and shame departments that based decisions on political considerations rather than research.

It remains to be seen whether last week's Home Office-commissioned report into lads' mags will also get left on the top shelf.

Why does the government consistently ignore expert recommendations? Clearly a balance must be struck – accepting all advice is as bad as ignoring it – but the government appears to have found another third way: commissioning reports in lieu of acting upon them.

Chris Game, honorary senior lecturer at the Institute of Local Government Studies, Birmingham, suggests Labour is probably a victim of its own prolific report-commissioning. Having championed evidence-based policy-making, it has provided academics with more ammunition to attack it than any government before – and, he suspects, after.

"Some of the blame must also lie with junior ministers, eager to make their mark and impatient with the time it takes academics to provide considered evaluations," he says.

"They jump ahead without fully waiting for, let alone incorporating, the recommendations of pilots." An example of this was highlighted in the CIUSSC report: the Every Child A Reader scheme, whose national roll-out was announced in 2006, just one year into a three-year pilot scheme.

Game adds that often there is a communication clash: academics are not necessarily very good at negotiating with politicians, providing them with what they need, when and in the form they need it.

Patrick Dunleavy, professor of political science and public policy chair at the London School of Economics, says Labour governments have tended to be more keen on commissioning enquiries, and this was particularly noticeable during the first Blair term, but doesn't believe they have more of a tendency than any other party to ignore their findings.

"Governments sometimes have disagreements with advisers, and there can be quite good reasons for not accepting expert opinion," he comments. "I'm not saying it's defensible, but it's perfectly common and a pretty permanent political thing. We are also currently in an unusual period, with ministers not able easily to bind their successors into long-term plans. If the government were rushing through all the long-term planning it could and trying to bind it in concrete, there would soon be opposition."

In terms of what happens after the general election, Dunleavy believes a hung parliament would be good and a coalition government better for evidence-based policy-making: "A minority government cannot pass legislation without the parliament's agreement, for which it need consensus and a strong, legitimising consulting process to get everyone on board.

"Two parties working together will mean several commissions and committees, plenty of focus on detail, and no strong ideological ability to resolve everything along party lines. To avoid mistakes and running an ineffective government, they will consult more and adopt things that work well."

Challenge of charity partnership

Mon, 01 Mar 2010 12:27:24 GMT

Partnerships with large companies can make a big difference to charities. But should there be a better way of choosing which charity to support?

While having a charity of the year can be a very beneficial and worthwhile venture for both the company and the charity, so many smaller and less emotive charities lose out that it would surely make more sense to let individuals chose their own charity.

Being chosen as charity of the year by big companies means big rewards for the relevant charity but the vast majority of charities in the UK never become anyone's charity of the year. They are too small, too unfashionable, don't have enough regional branches or fail to match the corporate brief in some other way.

The competition to be chosen as a charity of the year, particularly by the major UK companies, is intense. There is a good reason for this as the rewards can be huge. Tesco's chosen charity for 2008 was Marie Curie Cancer Care and they raised £6.1m, which will allow far more people to end their life at home. The Tesco Charity Trust added £500,000 to existing monies raised. This year, Tesco has chosen the Muscular Dystrophy Campaign this year and hopes to raise £3m.

Even companies lacking the might of Tesco provide a a huge boost for charities. Santander has raised over £200,000 for Help the Hospices while CLIC Sargent's partnership with Chelsea FC over the past four years has raised over £2m.

But there are around 189,000 charities in the UK and most of them don't get a look in for charity of the year status.

Charity pitch

Charities involving children and cancer are the most popular choices for charity of the year. One very experienced member of staff from a health charity believes that if you get shortlisted, and staff vote, that vote is probably most influenced by the extent to which the charity pitch can make a person cry, followed closely by how wide the appeal of the charity is. Vulnerability seems to be a fairly consistent theme among winning charities.

Many charities are asked to put forward a proposal to become charity of the year but as one member of staff from a national charity said, 'It takes us a long time to prepare our proposal and there are no prizes for coming second."

Many large companies want tangible propositions like buying wheelchairs and find it more difficult to motivate staff to support causes which offer emotional support.

Rachel Kirby-Rider, director of fundraising and communications at Samaritans says: "Winning charity of the year is a real achievement for any charity and Samaritans will continue to apply for these partnerships.

"However, there is a lot of competition from other charities and there is a perception that it can be difficult to demonstrate how funding confidential helplines, like Samaritans, make a difference to individual people's lives. Another challenge is that mental health problems, depression and suicide are still widely stigmatised and misunderstood, making it hard for companies to align themselves to such issues; however there has never been a more relevant time to support charities in this field."

Another senior charity worker notes that being chosen as charity of the year is often driven by corporate criteria. The quality of the application and how recently a similar charity was supported are crucial factors and a charity is often asked to absorb a high proportion of volunteering, which they may be unable to do.

Joanna Woolcock from Crisis, the charity supporting the homeless, finds that when it comes to a vote for charity of the year, "our client group aren't often perceived as being most in need and homelessness is not an issue at the forefront of employee's minds when they vote. Despite being shortlisted by the company itself, at voting stage we lose to children's or cancer charities, hospices and those who are benefiting from high media profiles. Geographical spread also makes a massive difference, particularly with such strong emphasis on volunteering. We can't deliver a partnership with a high volunteering requirement and often our locations don't reflect those of the company."

Volunteering opportunities

A corporate fundraiser from a well known medical research charity is frustrated: "Our feeling is that we are not a very "sexy" charity and do not have a high brand profile for those companies wishing to be "seen" to be supporting a charity. The current vogue in many large companies is volunteering opportunities for their staff. It's pretty hard for us as a medical research charity to find a garden to makeover, a scout hut to paint or a patient to befriend but our work is still so vital! There are only so many volunteers you can squeeze into our charity shops or help at abseils and walks!"

There are causes which are small with a low profile, but fit in well with a particular company. Get Connected, although small, has had a great partnership with Carphone Warehouse for the past nine years because a helpline for young people and a mobile phone retailer have a natural synergy.
Not all companies have a staff vote by any means. Some charities of the year are just decided by directors and/or the corporate social responsibility department.

Although charity partnerships can be a very beneficial and worthwhile venture for both the company and the charity, because so many smaller and less emotive charities lose out, wouldn't it make more sense to let individuals chose their own charity?

I went into companies for over 12 years, talking to individual employees about giving to charity from pay. I was taken aback by the level of feeling within some organisations about how the charity of the year had been chosen. Mmany employees felt aggrieved that they hadn't been involved in that choice or that their chosen cause would never be elected as it wasn't a high profile charity. Individuals often shared their personal stories with me about why they wanted to help a particular charity and many of those stories have remained with me as they were very moving.

When I went into companies which matched or enhanced their Workplace Giving scheme, employees felt that their employer was backing their individual choice of charity and they often said how much difference it made to their view of the company.
Many employees want to give and give generously to charity. Companies interested in corporate and social responsibility should help them to do this.

Elena Joseph is head of charity liaison and new projects at Workplace Giving UK