Paul Gosling, Public Service Magazine, December/January 2002-3
|There is more than just rhetoric to the fast developing UK government policy on
new localism, argues free lance journalist, Paul Gosling.
Having established a reputation as possibly even more centralist than Margaret
Thatcher's Conservatives, New Labour is now reinventing itself as the party that
Of course, the Labour government had already delivered real devolution, with a
Scottish Parliament and Assemblies in Wales and Northern Ireland. But these were
seen as policy commitments Tony Blair inherited from John Smith, rather than
issues he was personally committed to.
Labour's new localism goes further than this and, if carried through, represents
a fundamental reshaping of public administration across the whole of the UK.
"Now is the time to devolve power," said Gordon Brown as he announced proposals
for local authorities to have greater decision-making ability, less ring-fencing
of funds, fewer performance targets, more borrowing powers and an enhanced
ability to trade.
Meanwhile, a parallel process is taking place in the National Health Service
with the introduction of foundation hospitals. These will also win greater
borrowing powers, improved ability to trade, fewer performance targets and more
decision-making ability. The foundation hospitals are set to have so much
independence they are even described by some commentators as becoming rather
distant members of the National Health Service (NHS) family.
It is a similar story with social services. Health secretary Alan Milburn has
told local authorities they can set up children's trusts to bring together
children's services across existing council departmental boundaries, while also
commissioning some health services. How they do this, Milburn has told them, is
basically up to them. The best ideas will be rewarded with pilot status and much
There is a clear philosophical framework here. While no government is ever
likely to shout, "whoops sorry voters, we got it wrong", what the Labour
administration is implying is that its centralising tendencies have failed to
deliver quickly enough the reform of public services demanded by the electorate.
Instead, it will be up to local managers and politicians to decide how to meet
Yet the devolution will be balanced by central government exercising greater
control - in some situations. With local authorities and NHS hospitals, it is
only the best performers that will be given more flexibility and freedom. The
worst service providers could be suspended and handed over to another public
body or not-for-profit organisation (or even a trading company) to run instead.
This has already famously happened with some of the worst local authorities and
schools - now we can expect it to happen more often with hospitals, councils and
their social services departments. Government will also continue to issue
performance targets covering core objectives.
Despite retaining and even increasing these strong central powers, there is wide
acceptance that new localism is more than rhetoric. Michael Jacobs, general
secretary of the Labour-linked Fabian Society, argues that all the main
political parties share this change of outlook. "It is really a recognition of
sociological change", says Jacobs. "What they have all recognised is that in a
very fragmented, diverse, plural society, trying to provide services more
responsively to their users can't be done by the centre, which can't have that
much understanding of differentiated users."
Indeed, new localism represents such a profound change of culture - or shock to
the system - that it is implausible that it can be introduced without severe
birth pains. Gordon Brown for one realises that it means not only more diversity
in services, but also more variability in standards. It seems unlikely that the
electorate is yet ready for a big increase in the number of press stories
talking of postcode lotteries in terms of health treatment or admission criteria
to elderly people's homes. And politicians' resolve may flag when the pain of
reality hits them.
The policy is driven by the need to turn public services around more quickly.
But there can be no guarantee that devolving responsibility for the services
will speed up reform. Believing that it will, runs contrary to every instinct
known to a politician.
These pressures will cause local service-delivering bodies to adopt new
structures and forms of accountability that are largely untried. Failure to make
the new organisations accountable will simply make they old-style quangos, which
Labour was, in part, elected to get rid of.
Instead, the government is look to public interest companies (PICs) to deliver
many of the local services such as foundation hospitals and social services.
These are largely untried organisational forms, based around the idea of
companies limited by guarantee, which are not-for-private-profit. It is intended
that they will be able to run services more cheaply than the private sector
because they will not pay dividends, but they are intended to adopt a more
commercial and efficient approach than the public sector.
The only examples there are of similar bodies underline the government's
difficulties. Network Rail - Railtrack's successor - has been criticised for
having an excessively complex structure which tries to represent too many
interests, while still being unaccountable in any real sense. And many
universities, which have PIC-type structures, are regarded as too removed from
the interests of wider society.
Proposals for PICs largely came from the Public Management Foundation (PMF). Its
chief executive and author of its PIC plans was Paul Corrigan, who is now Alan
Milburn's special adviser. Jane Steele, head of research at the PMF, says that
the PIC concept took-off quicker than was expected and now, to an extent, has a
life of its own.
"A lot of people are talking about PICs without being clear on what is actually
being talked about," says Steele. She suggests they could use several models,
including a two-tier board structure - in this scenario the overall board has
management and financial responsibility, while a secondary board may be the
forum for holding the service accountable to local citizens and service users.
Further, argues Steele, accountability will be achieved through contract
commissioning as with social services provided by a PIC for a local authority.
New localism may be a new term, but it does also seem to have a real meaning.
However, so, too do some old phrases - like carrot and stick and flying by the
seat of your pants.
Contact the editor of Public Service Magazine or Paul Gosling at:
Web site: www.fda.org.uk