It can be done

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The debate on public service reform in the UK has reached a pivotal moment. A new Government has made pledges to open up public services, including to for-profit providers. But the critics of change have put the Government on the defensive and, on the National Health Service, Ministers have become as critical of competition as their opponents.

Our job is to raise the level of debate above the politics and look at the evidence. Inevitably people will have different views about the future of public services but there are facts and experience on which all should agree, and which the examples in these pages bear out.

The first is that for-profit companies (and of course not-for-profit companies and charities) are delivering public services successfully in the core areas of health, education, prisons and policing, both in the UK and overseas. The second is that they are doing so at greater value and with equal if not better quality. The third is that the fears raised by the critics of competition have not materialised. The German healthcare system has not “fragmented” under competition, for example. In fact, the involvement of the private sector has added to the richness of German healthcare and provided new services from which every German citizen can benefit. Competition has strengthened the fabric of the UK prisons system in the same way.

This is not to say that private organisations will always be better than public providers or that public monopolies should be replaced by private ones (far from it). It is to say that Ministers are right to base their policies on the principle of competition. As Alan Milburn said recently, “Monopolies in any walk of life rarely deliver either operational efficiency or customer responsiveness.”

Ministers can actually go further. In practice there isn’t much difference between a company running school improvement programmes at a profit (allowed by the Department for Education) and a company running schools at a profit (banned).

Last year, the former reforming Finance Minister of New Zealand, Sir Roger Douglas, wrote a pithy guide on public service reform for the incoming Government. His advice included the following maxim: “Consensus for quality decisions does not arise before they are made and implemented. It develops progressively after they are taken, as they deliver satisfactory outcomes to the public.” It will take real political leadership to implement open competition in UK public services and opposition is inevitable. But these case studies show that reform will indeed generate those “satisfactory outcomes” that go on to change the political weather. It can be done.