Aveek Bhattacharya, chief economist of the Social Market Foundation, says that with tax bills rising 2022 must be the year when politicians return their focus to the neglected issue of public service reform.
The report comes after the head of the National Audit Office warned that too many big public sector projects end up wasting money. (See notes)
With Britain’s tax burden set to rise to its highest level in 70 years and the pandemic, net zero transition and population ageing all putting pressure on the public finances, getting public money to go further will be critical in the years ahead, the SMF said.
Yet the report suggests there is little political appetite for a return to the approach to public service reform pursued in the 1990s and 2000s, predicated on increasing choice, competition and marketisation.
Instead, it says that policymakers should consider three different approaches to public service reform in the 2020s:
- Making public services more evidence-based: training doctors, teachers, police and other public servants in the use of evidence, mandating regulators like Ofsted to promote evidence-based practices and investing more into research as to ‘what works’.
- Investing in the development and use of technology: developing new bleeding edge technologies, such as robotics, but also ensuring existing technologies are fully utilised (for example, digitising services).
- Ensuring services are more user-focused and ‘relational’: breaking down silos between different services, and making interactions with public servants more ‘human’ and personalised.
According to the Office for National Statistics, public sector productivity rose by just 4% between 1997 and 2018. This has been driven mostly by improvements in healthcare, up 22% over that period, which may reflect the sector’s greater adoption of evidence-based practice and technology – the National Institute for Health Care Excellence, which reviews evidence and develops guidelines for doctors is the best established of the UK’s ‘What Works’ centres. However, productivity is lower than it was 20 years ago in areas like social care, policing and the administration of benefits.
Health Secretary Sajid Javid told Conservative Party conference last year that “2022 will be a year of renewal and reform” for the NHS, while Shadow Chancellor Rachel Reeves has proposed the creation of an ‘Office for Value for Money’ to oversee public spending.
The SMF report challenges both parties need to be clearer about how they intend to achieve these goals.
Aveek Bhattacharya, Chief Economist at the SMF, and the author of the report said, “A decade of arguments over austerity has led politicians to take their eye off the ball when it comes to making sure the money we do spend goes as far as possible.
The Blair government’s approach to public service reform produced mixed results, but it was at least backed by a coherent theory of improvement. Its time has likely passed, but there are alternative ideas out there – making services more evidence-based, technologically advanced or human and personalised.
“New ideas and fresh energy are needed if the public sector’s stagnant productivity is to increase. That increase is vital. Voters facing ever-higher tax bills need to know that their money is being used more effectively.”