Memorandum by the New Local Government
Network (CVP 09)
The New Local Government Network (NLGN) welcomes
the Public Administration Select Committee's (PASC) inquiry into
choice and the role it can play in reforming and modernising public
services. The PASC inquiry paper outlines many issues that need
to be addressed when considering introducing and increasing choice
for service users and we will look at them in more detail as part
of this submission. However, this memorandum is very much to be
read in conjunction with our published report "Making Choices"
which has been submitted separately.
The current debate around choice has become
confused and largely polarised with some commentators regarding
choice as the panacea for all problems currently besetting public
services, and others fearing that choice equals privatisation
and that its introduction would lead to greater inequity, post-code
lottery and the loss of the public service ethos. Choice is a
very complex concept with many facets. So far the discourse has
been far too narrow, focusing largely on one type of choice: individual
user choice over provider and almost entirely ignored collective
choice and choice over how a service is delivered rather than
who delivers it.
NLGN supports the attempt to bring some clarity
to the choice debate to ensure it reaches well beyond political
rhetoric. We regard choice as an important tool as part of a public
service reform agenda that tries to make services more responsive
to users' needs and ensuring that services evolve in line with
public choices rather than professional or producer preferences.
However, we disagree with the view that choice is a good in itself
and should be implemented in all service areas at all costs. It
has to be applied under the correct conditions if negative effects
on equity and service standards are to be avoided or minimised.
BACKGROUND
In March 2004 NLGN published its Making Choices
report, the result of an eight-month research project that
addressed many of the issues raised in the paper by PASC. The
NLGN research particularly focussed on choice in local public
services and drew its case study material largely from examples
of choice models used in local government services.
We regard the extension of user choice as part
of a wider debate about how we can modernise public services and
understand the concept as one way of ensuring that services evolve
in line with public choices and that they become more responsive
to the needs and desires of individuals and their communities.
The report carefully examines benefits and problems arising from
enhanced choice and demonstrates that these are influenced by
the conditions under which choice is widened rather than resulting
from the inherent nature of choice.
Below we will consider some of the issues in
more detail.
Defining what choice means in the public sector
There is considerable confusion over what enhanced
choice actually means. The different participants in the debate—academia,
think-tanks, central government, local government, the wider public—all
work with differing definitions of choice of varying validity.
The NLGN study "Making Choices" defines enhanced choice
more precisely as "delegated decision-making" whereby
choices once made by professionals are made instead by service
users.
This is not to denigrate in any way the potential
transformation of public services caused by mechanisms that substantially
increase the role and influence of user voice in individual services.
We do, however, feel that the issue is confused when voice mechanisms
are referred to as enhancing choice.
We do not feel choice should be regarded as
a good-in-itself to be applied universally across all local authority
services, but we have concluded from our work that greater choice
works best when it meets the following three criteria:
— it resolves a problem with service
delivery;
— the problem can be perceived by users
through their direct, day-to-day experience of the service;
— the operation of user choice is integral,
rather than incidental, to the resolution of that problem.
Only when these criteria are met, can users
be sure that the extra costs they incur when making choices are
worthwhile.
Choice can be about diverse providers (which
may or may not include the private sector) and contestability,
but choice can also be delivered by one provider (public or private)
providing a range of options.
Our case studies have illustrated that choice
in local public service delivery can indeed mean many things.
The two major case study areas we have identified where elements
of user choice have been introduced could not be more different.
Direct payments in social care offer users increased choice by
delegating financial resources completely to individuals to "purchase"
the care they want from the public or private sector. In this
way it introduces new providers and hence greater capacity. However,
this does not always work in practice, eg in rural parts of the
UK acute care personnel shortages exist and users effectively
have no choices available due to the limited capacity. The choice-based
letting scheme in housing in contrast is about rationing a scare
resource. Choice has not increased overall capacity; no more social
housing is available to tenants. However, the nature of the housing
service has fundamentally changed through the introduction of
the bidding schemes. The old system was opaque and often unfair;
the new system is open and transparent service that responds to
user choices. In both cases users have become empowered to make
life choices that were once made by local authority professionals.
Collective choice
A weakness in the current debate is that it
focuses largely on individual user choice. However, we feel that
collective choice by groups of users is also worthy of consideration.
There are some services, particularly those dealing with the public
space or those requiring considerable strategic co-ordination,
where individual choice is not suitable or possible. Collective
choice can also address some of the concerns about equity by encouraging
pooling of resources between users and equalisation through democratic
procedures; it can also allow local democratic representatives
more influence over user choices than might exist with individual
choice. Clearly collective choice links to several other agendas
we have worked on, including neighbourhood and local governance
that come under the banner New Localism (Corry and Stoker (2002)
New Localism: Refashioning the centre-local relationship,
NLGN; Corry et al (2004) Joining-up local democracy:
governance systems for new localism, NLGN).
Choice and equity
One of the most controversial issues when considering
widening user choice in public services is equity. Some commentators
believe that enhancing choice must have a negative impact on equity
and argue that it exacerbates existing inequalities; encourages
market-type reasoning into public services; polarises the quality
offered by different providers with the less well-off receiving
the poorer service; and that middle-class users who are rich in
resources such as information and inter-personal skills have a
considerable advantage. Others believe choice enhances equity
and argue that it offers choices to the poor that have always
been available to the wealthy; improves access to higher quality
services for the poor; and keeps the middle classes and their
tax contributions within the public sector.
The NLGN report concluded that the probably
most powerful argument for enhancing choice without diminishing
equity is that by offering choice to poorer users one is positively
enhancing equity since such choice has always been available to
the wealthy. The latter are free to use their money to exit the
public sector and purchase services from the private. This has
been the case particularly with healthcare, education and long-term
assistance and care for the disabled or elderly.
The research considered in the study suggests
that the direct payments and choice-based lettings schemes can
offer a high degree of equal choice to all users. However, such
schemes come at a price—particularly in terms of building
capacity and support systems (although not necessarily any higher
overall than normal provision without choice). However, for choice
to really increase equity without exacerbating existing inequalities
a very great deal of effort has to be put into the equalisation
of resources between the resource rich and resource poor.
Choice and capacity
Capacity is another key issue when considering
widening user choice. Choice and user preferences are only real
if the capacity to respond to them exists. In particular, offering
greater flexibility over the timing, location and range of options
for a service will sometimes incur extra cost and will almost
certainly require some expansion or redirection of capacity in
regard to staff skills and possibly institutional structures.
The issue is important because while services with much greater
choice over service form can drive up service standards and equity
by reaching new marginalised or under-resourced groups, the way
capacity is built and the way costs are met may diminish or enhance
these benefits.
Choice does not need to imply anything about
user charges. However, it may be helpful to comment on them here.
For certain services, it may be acceptable to employ user charges
for an enhanced service above a minimum, because the benefits
of purchasing the service do not have a particularly significant
impact on equity. However, other services options—for example,
those meeting minority religious requirements or basic educational
needs—should probably not be subject to user charges on
the grounds of equity. In addition, there must be some concern
that if the provision of a wider range of service options and
extra services becomes the norm in local government, then the
better-off will be able to purchase a far better service overall—the
cumulative result of choosing and paying for a wide range of alternative
or extra service options—than less well-off users. Of course,
the way these problems are normally dealt with is to subsidise
poorer users through general taxation.
Limited capacity and provider choice can have
serious effects on equity. Services facing higher demand, which
will tend to be the better services, can choose less costly, more
beneficial users ensuring their service improves while less popular
services, likely to be the poorer services, are left to treat
the more costly, less beneficial users leading to an ongoing reduction
in their quality. This is particularly true in health and education,
where this phenomenon is known as cream-skimming. In effect, therefore,
lack of capacity turns user choice into provider choice and raises
serious equity concerns. A mass of dissatisfied users, lack of
clarity about why some choices are rejected, and overt manipulation
of the system can be the result.
Strategies must be established to expand capacity
by improving less popular providers or options and by encouraging
other public, private and voluntary organisations to join the
market to deliver a service. Increased contestability would give
providers an incentive to respond more directly to user needs
and evolve quicker.
The key concern for any provider entering a
new market must be the balance of risk and cost against the potential
reward. Greater choice has obvious risk and cost implications
as providers no longer have guaranteed throughput.
PRODUCER CONDITIONS
Some staff and trade union representatives fear
that the greater contestability promoted by enhanced user choice
will lead to cuts in pay and jobs and poorer working conditions
in order to provide a cheaper service. There are also claims that
delegation of responsibilities to users will mean deskilling for
the professionals.
This study found little evidence of job cuts
and adverse conditions for workers. By contrast, there were some
signs of improved job satisfaction under the choice schemes considered
in the research.
RAISING SERVICE
STANDARDS
Some commentators believe choice has a detrimental
effect on service standards and argue that it encourages providers
to offer differing quality of services to users with different
levels of resources; that it allows users to make inappropriate
or ill-informed choices; increases the transaction costs of service
delivery; and creates dissatisfaction amongst users who want good,
convenient services not choice. Others believe choice has a beneficial
effect on service standards and argue that it improves standards
by allowing contestability between different providers; raises
user satisfaction; and allows public services to evolve more effectively
to changing user demands.
The NLGN study found that choice can improve
the services available particularly to the resource poor but this
is not an automatic process. Considerable time and effort have
to be put into the moderation of pre-existing conditions if services
are to be improved, quality polarisation is to be avoided and
greater equity to flourish.
As with equity, the evidence suggests that the
positive or negative impact of choice is dependent on the conditions
under which it is implemented.
INFORMATION FOR
USERS
The research clearly demonstrated that authorities
must ensure users are adequately resourced in terms of funds,
information, personal skills and links to professional networks
if they are to be able to make informed and successful choices.
The extent to which information is distributed
and how it is presented is vital to building awareness of a scheme
and encouraging take-up. Including the identification of those
groups which might be hard to reach and ensuring that strategies
are in place to make them aware of schemes and encouraging them
to take part in the scheme if appropriate to their needs is key.
Poorly thought-out information distribution and poorly-presented
literature will have a negative impact on the equity of a scheme.
All professionals who participated in the NLGN
research acknowledged that the sharing of information between
users, frontline staff, management, different local authority
departments and private and voluntary sector partners is absolutely
vital if a choice scheme is to run effectively and to improve
over time.
This is particularly important as the relative
novelty of choice schemes means that lessons about choice are
still being learned and this can only be done if the different
elements of a scheme delivering or receiving different aspects
share their experience. Also the emphasis on being more responsive
to user demands requires that knowledge of those changing demands
and the implications for service delivery is widely shared to
ensure that all providers are working with rather than against
each other. And since choice schemes often involve more providers
and agencies than in the past, playing roles which might once
have been carried-out entirely by the local authority, it is vital
that information is fed freely to the key body charged with overall
co-ordination to ensure that schemes are effective.
Thus procedures such as good data systems reporting,
ongoing reassessment of user choices, the establishment of well-supported
partnership groups, the creation of a culture of inter-departmental
co-operation and professional flexibility and the encouragement
of frontline staff feedback, all take-on an extra importance in
public services characterised by choice.
EVALUATION
The regular monitoring and evaluation of choice
schemes is essential to establish whether users are satisfied
with their choices and to identify the impact on equity and service
standards. Questionnaires and telephone surveys are commonly used
for this purpose, but our study found that many lack sophistication
and response rates vary greatly. Local authorities need to think
hard before implementing elements of choice about which mechanism
would best assess the likely impact of increased choice on their
services. They also need to be able to collect meaningful data
on the impact of greater choice on cost, user involvement, staff
satisfaction, provider capacity etc to be able to compare their
choice schemes with previous service performance. Inspectorates
like the Audit Commission must also seriously consider these issues.
CONCLUDING COMMENTS
The NLGN study has found that offering choice
to users is no simple matter. Major shifts are required in working
practices and new infrastructures have to be established to monitor
and administer the operation of service provision based on user
choice.
The enhancement of choice has the potential
to have both a positive and a negative impact on equity, service
standards and the working conditions of public service workers.
Whether enhanced choice does have a positive or negative outcome
in these areas relies heavily on the conditions under which choice
is enhanced. Given that the range of these conditions and of these
ways of enhancing choice is so varied, there can be no sense that
a "one-size-fits-all" model of choice exists. Indeed,
enhancing choice should be far more about flexibility and open-mindedness
in response to the particularities of each service and each scheme.
Many of the issues raised in the inquiry demand
further detailed research.
April 2004
| 
