This week there have been two important events for me in relation to Public Services Reform. The first was personal and the second was public news.
Firstly, I have finished reading David Harvey’s excellent book entitled “A Brief History of Neoliberalism“. I thoroughly recommend this well researched and easy to read political-economic history of the last thirty years. The book provides an excellent insight into Margaret Thatcher’s public sector reforms, largely based on privatizing vast swathes of publicly owned industries (reversing Labour’s post World War Two nationalisations). Simply, neoliberals believe that everything should be commoditized, with a market value, including public services. Neoliberalism is closely aligned to globalism (the antithesis of localism). Neoliberalism is a “theory of political economic practices that proposes that human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterized by strong private property rights, free markets, and free trade”.
The second event was to reflect on the Public Services White paper being delayed until July, despite being originally promised by the Cabinet Office for January. Some observers believe that there are three camps within the Coalition Government. The blue camp, which includes David Cameron and Oliver Letwin is reported to favour maximum outsourcing – in essence, this is the classic neoliberal remedy. The yellow camp which includes Danny Alexander and Nick Hurd favours new delivery models and is believed opposed to outsourcing. Finally, it is argued that there is a red camp led by Nick Clegg which is cautious about reform. There is speculation that the White Paper was pulled “for reflection” following the Liberal local election results, with Local Authority reform now being in serious disarray. Also there is new evidence that the Big Society is not understood by 80% of Councils. Before the dust settled, the Cabinet Office announced that the “Big Society Bank gets the Green Light”.
Based on a leaked paper, it is argued that the Coalition is now opposed to wholesale outsourcing and favour reform, based on social enterprises and employee owned mutuals, with private sector involvement limited to joint ventures and not for profit groups. Unfortunately, the new delivery models recently took a hit below the water line, with Suffolk County Counsel’s ambitious plans for outsourcing and virtual local government imploding. The week has also seen criticism of the Coalition Government’s twelve month record on realizing real efficiencies, with mounting evidence of real cuts in public services resulting from financial constraints from the Treasury.
Also this week, despite the Cabinet Office’s draconian controls restricting consultants and professional interims, there is increasing evidence of the Public Sector letting increased consulting contracts. Professional Interims, the natural choice for top-class transformation professionals (based on cost-effective delivery and risk reduction) continue to be marginalized.
Personally, I think that Public Services Reform is a ticking bomb and that based on David Harvey’s history, the neoliberals will prevail. For sure, some money will go into Big Society probably via the Big Society Bank. The big money will sooner or later follow neoliberal traditions and go to outsourcing, consultants, banks, and lawyers etc. Sadly, the Coalition Government whilst being pro-business, favours big rather than small businesses like professional interims. Wholesale outsourcing may be a secondary or tertiary choice but it will continue to stalk in the long grass and will prevail. There will be many detours, U- turns and banana skins along the way and I fear that the professional interims who once supported the Public Sector will remain marginalized. The Coalition Government seems to have little appetite for genuinely transforming Big Government but I predict that Big Society will ultimately be a side-show, leaving a clear field for outsourcing (just like the privatisations in Margaret Thatcher’s era).