Charles Cochrane replies to the PM on Public Sector Reform

There is no serious difference between the current Labour public sector reform agenda and that of the Conservatives argues Charles Cochrane, Head of the Protect Public Services Unit of the Public and Commercial Services Union (PCS).

The Prime Minister’s article, The Progressive Case for Public Sector Reform, though interesting, is very thin on detail and evidence. Much of his approach consists in setting up a number of straw men and then knocking them down. For example, he begins by saying that there is “always” a progressive case for reform, and asks—rhetorically, one must suppose—what progressive case is there for the status quo, except in utopia?

This is astoundingly innocent. Instances of a status quo preferable to destructive, unnecessary reforms are not hard to find. German Labour laws in January 1933, for instance, were infinitely preferable to the “reforms” which the newly elected Nazi government introduced. That does not make Weimar Germany a “utopia”, but it does serve to illustrate that reform is not always and automatically a good, positive and beneficent alternative.

Other generalisations by the Prime Minister are equally dubious. He claims that “In the early days of universal services the standard of service provision, in all aspects of our lives, was poor”. This is a definitive and damning statement for which he provides no evidence at all. All public sector universal provision was poor? Health? Education? Welfare? Not mixed, even, but simply and completely poor. This is a ridiculous argument, which nobody with any knowledge of the welfare state from 1945 would dream of making (leave aside the gratuitous insult offered an entire generation of dedicated, low paid public sector workers).

As ever, the Prime Minister’s enthusiasm for new technology unbalances his argument. He moves from the obvious need for improved service delivery to exploit the benefits of new technology—changes that can and should be introduced within a properly funded public sector model of public service—to conclude that public services must therefore be provided through an entirely different model of public services based on increased private sector provision, outsourcing and a variety of other delivery methods, none of which on their own necessarily enhance or integrate new technology into service delivery any better than adequately funded, well managed public sector provision.

Nevertheless the Prime Minster asserts that the alternative to reform “according to our values” is not no reform at all, but reform lead by the values of “another political creed”. He leaves unclarified what “our values” are, and why they differ from that of “another political creed”. As well he might, as there is no serious difference between the current Labour public sector reform agenda and that of the Conservatives’ rather vague visions for the same. As we know, David Cameron’s Conservatives have pledged to maintain current levels of public service spending and there is no reason to believe that is essentially untrue. What then? Methods of delivery? Labour is keen to press on with its programme (already far in advance of John Major’s government) of privatisation and outsourcing of public services. So are the Tories. Labour favours use of the “Third” (voluntary) sectors in public service delivery. So do the Tories. All use “choice” and “contestability” as their mantra, leaving aside what that might actually mean.

But these polices are hardly immune from challenge. To take but one example, my own union (the Public and Commercial Services Union—PCS) have already established from discussions with management in the Department of Work and Pensions (DWP) that not only do the skills required to fulfill the tasks envisaged in the DWP reform programme not exist in the private and voluntary sector, but their decision to use only private and voluntary sector providers for the proposed Pathways to Work programme is driven by the Treasury’s demand for a reduction in staff numbers in the Jobcentre Plus network, arising from the implementation of the Gershon “Efficiency” programme.

In reality, the evidence supporting a move to further private and voluntary sector provision in employment services is weak or non-existent. It is unfortunately the case that many of the advocates of such involvement have a vested interest in accruing a profit-making business for their sector, which will generate funding to support their existing infrastructure, or in plugging the gaps left by a mechanical pursuit of staff cuts in the DWP.

The Treasury maintains that greater labour-market “flexibility”, and the increasing use of the private sector in the public sphere will produce efficiency savings and improve the overall performance of public services. However, there is no reliable evidence that the private sector is more efficient than the public sector. Private companies are not producing the anticipated improvements in delivery time or cost, nor are they meeting quality standards, as the record of companies like Balfour Beatty have evidenced.

Privatisation does, though, mean massive profits for multinational companies such as Fujitsu and Siemens. Since 1993 these two companies have won contracts in areas such as taxation, defence research and the Driving Standards Agency. These profits made by private companies are out of all proportion to the risks taken, which—especially when providing a basically monopoly service such as water supply or a train service—are minimal.

It is of particular concern to PCS that despite previous assurances from the government, core frontline services in the DWP are now being privatised. For example, after the closure of Jobcentre Plus Action Teams (previously praised for their high performance) the government announced that their replacement would provide employment services exclusively from the private sector. No in-house bid was allowed. This is simply political dogma riding roughshod over “what works”.

Similarly, over 20 000 MoD civilian staff currently faces job cuts and privatisation, which PCS fear will adversely affect the current high quality of logistical support to our armed services. Areas under threat of privatisation include specialist and basic training, and most of the defence supply chain—including procurement and delivery of frontline equipment, IT and military communication systems, and maintenance of military vehicles. PCS believes these plans will make the MoD less accountable to Parliament and weaken the cohesiveness of Britain’s defence forces at a critical time for those forces. But, again, such wider considerations are being ignored in the rush to impose a simplistic model of private sector provision, despite the clear need for an integrated approach.

Perhaps the most alarming example of this approach was the government’s plans—unveiled in 2003—to privatise the UK’s Forensic Science Service. Only a campaign by PCS and Labour MPs forced the government to pledge that the service would remain in the public sector for two more years. If privatisation now goes ahead, it will make the UK the only country in the world that considers the detection of crime should be a matter for private profit. The possibilities of miscarriages of justice are obvious.

PCS does not put its head in the sand. We have endeavored to engage with the government’s reform agenda, by acknowledging their criteria for debate and responding with constructive proposals of our own. A PCS sponsored conference in December 2005, attended by senior civil servants, business leaders and cross-party political figures, made a significant contribution to taking forward the debate. The conference launched a major publication by Professor Roger Seifert and Mike Ironside of the Centre for Industrial Relations, Keele University, The Case for Civil and Public Services: An Alternative Vision (PCS, 2005).

But engagement with the government’s reform agenda can not preclude serious and fundamental criticism when major planks of that agenda are so misconceived. PCS has grave concerns about the nature and impact of the Gershon Efficiency programme, announced by the Chancellor in the Comprehensive Spending Review 2004, which included a commitment to achieve 104 000 civil service post reductions by 2008. PCS is on record as opposing this headcount reduction as the very epitome of the top-down “diktat” model for public services that the Prime Minster now so strongly opposes, especially as the post reduction was not decided upon after a careful, evidence based analysis of performance targets, workloads and staff in post across individual departments and NDPBs from which appropriate “efficiencies” were concluded as practical and desirable, but rather a centralised imposition of broad brush targets on a wide variety of different bodies performing different tasks.

The result of this has been predictable—many front line services such as Benefit Offices, Pensions Centres, Tax Offices, Child Support Offices, etc, have cut back on delivery to the public in order to achieve their targets, with a subsequent negative impact on service delivery (to take but one example, the House of Commons Work and Pensions Select Committee found that the DWP’s efficiency programme has led to many calls now going unanswered and benefit calculation taking much longer, resulting in a “catastrophic” level of service delivery). This flows directly from an ill planned and impractical programme that may have initially aimed for qualitative improvements in service delivery, but is now focused more on crude headcount reduction than reforming public services to become more effective, innovative and user-friendly.

PCS’s analysis and concerns are not based on a narrow view of “producer interest”, nor we do we suppose that the only required solution to better public services is a huge injection of cash, without efficient and accountable administration (including full and flexible use of new technology to meet the requirements of a diverse population) Yes, we seek to protect the interests of our members, but we see no contradiction between doing so and promoting the health and effectiveness of the services they devote themselves to delivering.

In that regard we are ready to engage with the government at any level about the future direction of public services, and to consider all options for reform, if they are necessary, fair, effective, and the product of genuine consultation with all stakeholders, including public sector trade unions. Sadly, the Prime Minster’s article hardly demonstrates that he is pursuing such options, and is not supported by very clear evidence of the failures of private sector provision of public services.

Charles Cochrane is Secretary of the Council of Civil Service Unions (CCSU), Head of the Protect Public Services Unit, Public and Commercial Services Union (PCS).

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