The Case for Change

Our public services are under ever increasing pressure. Demand is rising at the same time as budgets are decreasing.  The NHS faces a funding gap of £22 billion and social care faces one of up to £2.7 billion by 2020. Collaborate suggest that to plug the gap would require the largest increase in personal taxation in 40 years or significant cuts to public services.

At the same time, people feel they have little influence over the public services that they receive. Only a small percentage of people receiving a personalised service from providers. For example Ipsos MORI data suggests that only 14% of people feel they have influence in shaping the public services that the receive, and only 15% of people say they regularly experience a personalised service from providers.

Failing to meet people’s need

Locality/Vanguard argue that demand for public services is amplified by ‘failure demand’. According to Seddon, 2003 this is “demand caused by a failure to do something or do something right for the customer”. It is this ‘artificial’ ‘failure demand’ resulting from a failure to meet people’s need that is creating pressure on public services. In their 2014 paper Locality set out analysis that suggests that ‘failure demand’ accounts for 80 per cent of demand into health and social care services. They suggest that it occurs not only within but across multiple services as people try to get their problems sorted. At its root are misplaced beliefs in ‘economies of scale’ and in ‘standardisation’.

Customer satisfaction

In the 1980’s and 90’s the assumption was that competitive tendering for public services would deliver better value for money and better quality of service (Boviard, 2009). However this assumption has been challenged. For example, a Dutch study looking at public transport services in the Netherlands found that competitive tendering did not lead to any clear cut improvements in customer satisfaction. In fact when tendering shifted from quality to efficiency there was a decline in customer satisfaction.

Weak markets

The think tank Reform argue in their 2014 paper ‘Markets for Good’ that ‘human’ public services such as health and education, addiction support and social work are weak markets that lead to: ‘a vicious cycle of lacklustre performance, public anxiety and bureaucratic interference’ . While the paper ultimately argues for regulated competition in the sphere of ‘human’ public services, Reform recognise that fundamental reform is required, involving a greater focus on open, collaborative, outcome orientated service provision.