The Blog

Public Services We Can Believe In

The taxpayer it seems, doesn't actually like privatisation very much. Successive governments have often been to the right of the taxpayer, outsourcing regardless of a public mandate, not least in the NHS.

Tony Blair - the man probably most responsible for introducing the language of 'public service reform' into our national lexicon - once famously floundered in Parliament when asked to sum up his political ideology. The heirs to Blair - Miliband, Clegg and Cameron - have followed his lead in recent weeks as they rustle up policies to sort out pay day lenders, mortgages and energy markets. What should government do when private markets fail? Each party variously advocates price-fixing, sometimes subsidies, sometimes tax and sometimes regulation but with little consistency to suggest any deep, driving principles are guiding their approach to managing markets. Blair would surely nod approvingly, as a firm believer only in 'what works'.

But what about public services, where ideology is perhaps still at large? Any politician seeking to drive forward public service reform is likely to be confronted by those with a vested interest in the choice between the state and the market, between in-house provision or going out to tender.

The taxpayer it seems, doesn't actually like privatisation very much. Successive governments have often been to the right of the taxpayer, outsourcing regardless of a public mandate, not least in the NHS. PWC polling suggests that citizens prefer public control in most cases, reporting a "visceral belief that the profit motive is inherently harmful and likely to erode service quality".

Among public servants, ideology is also strong. Trade unions representing the staff side have fought for public ownership, often from a political rather than practical position in order to provide a counterweight to the mainstream political parties fondness for outsourcing, whatever the limitations or failure of public models in certain circumstances and whatever the views of the staff.

Finally, the beneficiaries, 'customers' or service users have had almost no voice at all in decisions over who runs their public services.

So for too long, each of these groups have been ignored, neglected or short-changed by their representatives. Partly, this is because of an unimaginative ideological framing set in the 20th Century which pits public against private and ignores, a meaningful third way (in lower case) of social, common or co-operative ownership.

It turns out that taxpayers are also very supportive of a role for not-for-profits, such as charities and social enterprises. Sadly, public bodies have had almost no levers at their disposal to select such a provider if they do go out to competition; procurement law has been 'ownership blind'. Crudely put, the choice is to keep it public or cross your fingers and hope that somehow the social sector wins against the might of private competition. But this is changing. A space is opening up for public bodies, staff and beneficiaries to choose a space between public and private. The Social Value Act, which entered into force earlier this year, now places a duty on public officials to consider wider social value in the procurement process. And this summer, the EU provisionally agreed new procurement rules which allow public bodies to reserve contracts exclusively to social enterprises - those with a public service mission, which reinvest profits in pursuit of that objective, and are either employee, user or stakeholder owned or managed - for a time-limited period.

Space is opening up for staff too. Sometimes, working for an independent, not-for-profit can appeal to staff as a way to take greater control over their own destiny and reconnect with their public service ethos. Yet often, those interested in this model have been accused of "opening the back door to privatisation", which is ludicrous given the scale of the services being carried out the 'front door' to the private sector through competitive tendering. But this too is changing. Earlier this year, Co-operatives UK and the Trade Union Congress came together to agree principles for when 'public service mutuals' can make sense, as long as staff are up for it and assets are locked in. Workers' representatives are becoming less suspicious of social enterprises and some are starting to see the possibilities for a new era of empowerment of our public sector professionals and workers.

Finally, service users are also finally starting to have their frustrations heard - from the Olympics to the Work Programme and care homes. On the back of public sentiment, a new campaign called We Own It has introduced the idea of a Public Service Users Bill, intended to give the beneficiaries of public services a greater say in decisions which affect them.

So politicians can move beyond a tired conflict between 20th century concepts of left versus right, without falling into a hole of believing in nothing at all. A position beyond public versus private which can enable greater innovation and entrepreneurial approaches while retaining a public service ethos and a commitment to social value. Politicians can seize this idea, filling an ideological vacuum at the heart of our politics, and meeting the aspirations of the taxpayer, workers and beneficiaries, who still believe in our public services.

A new report by Social Enterprise UK - Out of the Shadows - was published on 28 October.