2012 Reform scorecard

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2011 saw some undoubted successes for the Coalition Government’s public service reform agenda:

  • The Open Public Services (OPS) White Paper successfully set out an intellectual framework for reform across the public sector.
  • The Home Office and the Ministry of Justice showed how ideas of accountability, flexible delivery and value for money can come together into coherent programmes of reform.
  • The Ministry of Defence showed rare imagination in its ideas for improving the management of the defence estate.
  • The Open Data agenda of the Cabinet Office has given particular energy to the ideas of holding public services accountable to their users.
  • Progress was made on some of the most controversial reform ideas such as the aim to make senior civil servants personally accountable (via the Levene Review of the Ministry of Defence).

The experience of 2011 has major implications for all sides of the political debate:

  • Cuts are working. The big successes of the first 18 months lie in those services subject to real terms budget cuts. Ministers are now able to point to examples of genuine change in line with their policy goals. Conversely the big reverses lie in those services with protected budgets, notably health.
  • Management of reform matters. The management of reform went wrong in 2011. Ministers began with exactly the right intention: to begin the year with a White Paper on public services that would set the principles for reform and lead policy development within departments. The late publication of the White Paper (in July) derailed this effort. By that time, the equivocation in the health reforms had led to a loss of confidence and then retreat. As the year ended, the Prime Minister had regressed from support for reform to support for centralism.

2012 is a year of renewal for the Government. The agenda set out in the Coalition agreement will largely have been implemented in 2010, 2011 and early 2012. The Coalition needs a new policy agenda to carry through its objectives of freedom, fairness and responsibility into years three and four of this Parliament.

The public service reform agenda also needs renewal. The Coalition has the advantage of 18 months of (sometimes bruising) experience on which to draw. The lessons to be learned cover not only the reform of public services themselves but also the management of reform at the heart of government.

The recommendations for 2012 follow from this analysis:

Reopen the Spending Review on the NHS, schools and other “protected” budgets, on the premise that these services must deliver real terms cuts. Reform and innovation are too slow in both the NHS and schools. Both services are awash with funds due to the spending increases of the 2000-10 period.

Implement a full-scale review of the health and education workforces, on the model of the Winsor Review of policing, with a view to transforming their flexibility. The proposal to introduce regional setting of public sector pay is only a baby step towards the kind of change that the Winsor Review should deliver.

Renew the commitment to NHS reform. The passage of the Health and Social Care Bill will allow the Government to draw a line under this episode of reform. Ministers can then restate their initial objective of health reform, i.e. to put the doctor-patient relationship at the heart of healthcare (“no decision about me without me”). Ministers will need to be as consistent about the transfer of accountability, the introduction of competition and the drive for value for money as they have been in policing and justice.

Reboot the public service reform agenda. The Cabinet Office is proposing to review how departments are delivering the Open Public Services agenda. Much more importantly, the Open Public Services agenda needs to be restated and then implemented across government. This will require a new commitment across the Government and strong leadership from the Prime Minister and Chancellor. Ministers must replace policies that contradict the Open Public Services principles.

Reform fast and at scale. The Cabinet Office is prioritising mutuals and SMEs as deliverers of public services. These organisations will take many years to make a significant contribution. The Cabinet Office must also consider the merits of large public service providers, in the public, private and third sectors, who are able to make a major contribution immediately. That approach is already working in the Work Programme, for example.

Give Ministers powers to appoint senior civil servants. Most of Whitehall has yet to grasp “more for less”. Selective appointment by Ministers will greatly accelerate the pace of change.

The history of public service reform under other governments shows that this is a moment of truth. It is practically impossible for governments to recover the momentum of reform once it has been lost. Typically, governments make their major achievements early on and then lose ground once they have expended their political capital. The Coalition Government will need to buck that trend.