The Big Society - Public Administration Committee Contents

Examination of Witnesses (Questions 201-249)

Q201 Robert Halfon: Why can it not lend directly? Why do there need to be intermediaries? If a little charity in my constituency comes to the Big Society bank, why can it not get access to funds?

Adrian Brown: The Big Society bank is not being constituted as a direct lender in that way. That is how it is being set up. Gareth will know more about that.

Robert Halfon: In essence, it means that it will still be decided by the great and the good.

Q202 Chair: We are taking evidence next week on the Big Society bank, so perhaps we can leave that. On the question of contracting, we all know that the public sector tends to migrate towards larger providers. How do we get through to the smaller providers, which tend to be the mutuals?

Adrian Brown: I think you have to ask: why does the public sector do that?

Chair: Because it does not have the capacity to deal with it.

Adrian Brown: Because it is a lot easier to deal with fewer larger contracts with people with a track record of doing what you have asked them to do and can provide the data you need to see that they have done it. In future what one would hope according to the Big Society logic is that commissioners change their mindsets and—to go back to my definition of deployment of resources efficiently, effectively and easily—do not think how they can get the resources out and commission services that will achieve what they want to achieve but instead think how they can tap into a much wider range of resources, which would force them, if they were thinking in that broader sense, to start approaching maybe smaller charities and organisations that they would not necessarily turn to just because it was a big, easy contract for them to write.

Q203 Chair: You need different people with different skills, don't you?

Adrian Brown: I would have thought so.

Andrew Haldenby: If I may come back to the idea of scale, some problems in public services are big. Yesterday we had a conference of international health reformers. Some of the people there were from Valencia in Spain. What they have done in that region is divide up their health regions into 25 big sections each having hundreds of thousands of people.

Q204 Kelvin Hopkins: Like PCTs?

Andrew Haldenby: Like PCTs, but they ask private-sector organisations to run them, and they do that at a cost that is at least 25% less than the public-sector operators, and they have just as good, if not better, quality metrics. It is a huge success and they are very proud of it. But the point is that one organisation is responsible for the health service. Because of that they have been able to bring together primary and secondary care. I will not go on about it, but it is a perfect model of what this Government want to do.

Q205 Lindsay Roy: We seem to be preoccupied with profit-making companies and financial profit. As far as I am concerned profit is endemic in all of this and it is about dividends, benefits and improvements. Whether it is a private enterprise company, a mutual or a local authority, it is bringing the biggest dividends you can to the people who are engaging.

Andrew Haldenby: Perhaps the profit-making organisations have scale and they will be able to make progress quite quickly on this agenda.

Q206 Lindsay Roy: All I am saying is: let's not get it out of perspective.

Andrew Haldenby: Perhaps, but let's not forget the benefits of speed of action. This talk of other ideas creates uncertainty and prevents investors wanting to come in to finance all of this. There is no sign of a wave of investment in public services of a new kind, which is what the Government were hoping for, and this talk of different models is hindering that.

Q207 Alun Cairns: Mr Davies, obviously the Government are keen to see more public-sector mutuals and social enterprises, but do you think that the Civil Service and other public-sector agency staff are geared up to allow and facilitate that to happen?

Gareth Davies: There is a range of action on mutuals. First, there are the 21 pathfinder areas and a range of quite small examples where we are partnering organisations with what were public-sector bodies but have been spun out to create some kind of social enterprise structure. If you look in Cambridge, Tribal are working with the families and children at risk to create an organisation focused on problem families. Interestingly, the Cabinet Office has recently announced reforms of the Civil Service pension administration. We are now looking to create a mutual joint venture as a formal structure and spin out the Civil Service administration, bring in a private-sector partner and create a mutual environment. There is a lot of interest there. More generally, we are already seeing a lot of interest from civil servants across Whitehall to create their own mutuals. What they see is the opportunity to have more control and power over the services they provide and to sell their services to other bits of the sector.

Q208 Alun Cairns: I recognise that, but I want to highlight a situation where an innovative, entrepreneurial civil servant, or group of civil servants, thinks service can be delivered in a better way but it is not in the interests of senior management within the Civil Service to allow that to happen because their staff count would drop and, I would expect, their terms and conditions would change as a result.

Gareth Davies: What is important, as ever with these reforms, is to get the incentives right. One thing we are looking to bring in in the early autumn is something we call the right to provide, where civil servants have the right to put in a request to spin out as a mutual or social enterprise, which then needs to be considered by Ministers. They will have power to ask that, and that needs to be considered transparently. The full details are being worked through, but that is the way in which it will operate, just as in health you already have a right to request to spin out to a social enterprise. We have seen a lot of that in terms of social work practices. The obvious example is Central Surrey Health. They have already spun out and created a very viable organisation.

Q209 Alun Cairns: The Localism Bill has a community right to challenge. Any group, or even individuals within the local authority, can challenge the local authority to deliver a particular service. Do you think civil servants should be given the same right within national agencies or within the Civil Service in general?

Gareth Davies: Yes, and that will be the right to provide. The right to challenge will be for third sector bodies, communities and local authorities; the right to provide will be for civil servants to spin out their own services.

Q210 Alun Cairns: I am still not clear from your answer about the response from the senior management within the Civil Service, who really do not want to see it or have not bought into the process, bearing in mind that could well be their line management. I am thinking of a situation with which I have been quite closely involved, where an innovative civil servant came up with an idea and was almost put on disciplinary action because he dared to share that idea with me rather than his senior management. As soon as senior management saw it, they sat on it.

Gareth Davies: I would be worrying if that was happening. As ever, in any large organisation there will be mixed practice. Certainly, in the sessions that I have been running with senior civil servants there is a lot of interest. The critical way in which the right to provide will operate is through that ministerial check. The fact is that it will be considered by Ministers will allow civil servants to bypass people who might be more resistant to ideas.

Q211 Alun Cairns: Mr Brown, you talked about the risks of romanticising mutuals. Do you want to share your thoughts on that?

Adrian Brown: I think you are referring to a blog I wrote at the Institute for Government. There is a danger with the mutuals agenda that, because they sound very enticing, with people running their own services and public servants being able to carve out their own bit and have the freedoms and vision to go off and do it by themselves, that very positive view—no doubt all those benefits are real—masks the significant organisational and managerial challenges of making that happen. That is why I think the Cabinet Office is putting effort into the pathfinders.

As soon as you look at any particular area of public service and say, "Can we make a mutual out of this?" and think about the practicalities of doing that, then you can imagine the legal implications of taking a piece of an organisation and pulling out the staff contracts; you have to think about pensions, etc. When this organisation is outside of the public service, it has to fend for itself; it will have to have a business plan and a long-term vision about how it will create value, and from where it will get its income. It will have to manage its own IT and back office functions in ways that probably it did not have to think about before. All of that might be a price worth paying, but we should not underestimate the challenges of all those things when thinking about whether or not to go for mutuals. I think I said in that blog that the tone of the debate tended to focus far too much on mutuals as a wonderful, warm, glowing future place where we could all head, and not very much on the quite dull managerial challenges of making that happen.

Q212 Alun Cairns: Are there inherent risks in mutuals because of their lack of access to capital, for example?

Adrian Brown: I think that is a risk, but I would say a greater risk is that, even if a mutual can carve itself out and have access to capital in order to do what it wants to do, it is suddenly opening itself up to competition. Some of the bigger organisations, who are swimming around in whatever space they happen to be mutualising themselves into, will have a direct and immediate interest in the new kid on the block and whether business is being taken away from them. I would worry that the people who take these mutuals out suddenly find themselves in a highly competitive situation and are up against the big boys, and find that any bit of value that is worth having will be immediately taken away from them, or they will find themselves in a highly competitive position. That will be very challenging. As you think about mutualisation, how you manage the transitional period during which you go from the safe, protected waters as part of the state to a future where you are out there fending for yourself is extremely important.

Q213 Alun Cairns: So, how should policy evolve to best manage that position?

Adrian Brown: I think that transition has to be thought through a lot more because it will take time. As many people have already said, a lot of the elements of the Big Society are such fundamental changes to the way the state is organising itself and the way the culture of the people who work in the state develops that they do not happen over night; they will not happen in one or two years. As Matthew said, it is probably a 10- or 20-year vision. Therefore, I think that on the mutuals agenda we need to be honest that certainly it is great to have a vision where mutuals are a core part of our public service delivery, but is that in the next six months? I do not think so. It will have to be five or 10 years, and you will have to take your time to manage this transition; otherwise, you risk destroying everything in an instant because it will all be competed away.

Q214 Alun Cairns: Mr Taylor, do you have anything to add to that?

Matthew Taylor: I think one has to distinguish between the goal of allowing parts of the public sector to break away from being part of a huge bureaucracy, and therefore to have more freedom to focus on a particular set of functions and to be more entrepreneurial and develop different ways of working and collaborating, and the question of governance. How should those things be governed? At the risk of being repetitive, it takes you back to what you are trying to achieve here. The idea of mutualism is that it is a good idea that people who work in an organisation have a stake in it, whether it is a financial or governmental one. That is fine. It is an important idea. It works in certain circumstances, but there are also downsides in relation to flexibility, for example, and possibly in relation to spontaneity. These organisations may want to spend a lot of time talking about what they want to do rather than necessarily acting.

I would concur with what Adrian said. On the one hand, one needs to be pragmatic. I am in favour of greater plurality, so it is good for any system to have different ways of doing things. Let's have more mutuals, private sector, public sector and local authorities; let's have lots of different ways of doing things. I am in favour of that, but in terms of the specifics let's be pragmatic and not underestimate the dangers; in particular, as Adrian implied, remember that when we create a mutual how will we ensure that it will stay in that position in three or five years? How do we know that what we do not have is someone who just comes in to asset strip it? We have seen what happened to Southern Cross, which is a different kind of example. If you are a medium-size organisation that has a good contract you are a sitting duck for somebody to come along and take you over. How do we vest these organisations with a long-term commitment to public good?

Q215 Kelvin Hopkins: Referring to the question of profit-making companies in what were public services, Mr Brown and Mr Haldenby seemed to dismiss the realities that mutuals can do very much and it will actually be profit-driven private companies. What is the role of private companies in future for delivering our public services?

Adrian Brown: Of course, today private companies are responsible for delivering a lot of public services, so again it is not a case that the Big Society suddenly leads to an instant transformation in the role of the private sector in the delivery of public services. That is the reality and that has developed over quite a few years. It is important to acknowledge that private companies do have a role in this agenda because often the talk of Big Society has been very much to emphasise charities and mutuals and perhaps to downplay the role that the private sector can play. But, as Matthew just said, the plurality of provision is one of the most important parts of this, so the private sector undoubtedly has a role to play in that mixed market.

As we have just been talking about, the challenge will be: how do you balance the different types of incentives that these different organisations have if they are out there competing, directly or indirectly, for the same space? How do you balance the different capacity of these organisations to access capital and respond to Government tenders, which we have already talked about, because one would imagine that the larger private-sector organisations would be better placed to do a lot of those things compared with the smaller non­private organisations.

Q216 Kelvin Hopkins: So, we go through a temporary period of Maoist chaos and eventually it all falls into the pockets of the global corporations who can really do the job and make a lot of profit?

Adrian Brown: Only if the commissioners of public services are completely blind to their responsibility not just on a moment-by-moment basis to say, "Have I procured the best value service today?" But I think commissioners need to think about the long-term health of the systems for which they are responsible. It sounds terribly technocratic but it is the simplest way I can think of to describe it. They should feel that they have responsibility to manage those kinds of tensions in the long run.

Q217 Kelvin Hopkins: Earlier Matthew Taylor talked about the importance of having competition, profit, contestability and a variety of providers in the health service. Elswehere in the world, the health service that is actually private and competitive is in America. They spend twice the proportion of their GDP on health than we do and get a less good service with millions without any proper healthcare. Certainly, at one time the most efficient health service, despite criticisms in the world, was the National Health Service. In terms of equity it was incomparable with America.

Matthew Taylor: But a lot of our health and social care is provided through the private sector. GPs are private contractors. Our care sector has long been largely dominated by the private sector. Certain areas of healthcare with very vulnerable patients, people with severe mental illness, have also been provided by the independent sector, for example quite a lot of secure accommodation.

Q218 Kelvin Hopkins: You state the case, but I was coming on to that in my next example.

Matthew Taylor: I am just saying that the system you are praising is already a mixed market, so it obviously not a principled issue here.

Q219 Kelvin Hopkins: But you are stating what exists. What we want is evidence that one is better than another. Under the Blair Government we had measures that effectively forced local authorities to close down care homes and shift everything into the private sector, like Southern Cross. It happened in my constituency. First-class care homes, which were loved by the people who lived there, by the staff who worked there and by the communities, were forcibly closed down and now they are all in the hands of companies like Southern Cross. Vast profits have been made out of that and put into rich people's pockets. Is that the direction in which we are going?

Andrew Haldenby: There are lots of things to say, but we are going in the direction of more efficient public services. For obvious reasons, that is clearly associated with the financial and fiscal environment. On care homes in particular, I think it is important not to single out Southern Cross and deduce from that that the difficulties of that company mean that the entire private social care—

Q220 Kelvin Hopkins: It is reported today in the press that other companies are in similar difficulties.

Andrew Haldenby: Of course they are, but, hold on, let's have a look at the industry. The industry of residential social care is in some difficulties, in the case of Southern Cross because bad business decisions were made, but, most importantly, because local authorities and people themselves would now much prefer to be cared for in their own homes, not residential care homes, so demand for those places is falling and that business model is changing.

Q221 Kelvin Hopkins: We all accept that people want to stay in their own homes but some need residential care, which must be provided. Let's go to another example. The health service is being pushed into a much more-not mutual-but company-like arrangement with foundation hospitals. They were forced through by the last Government. I voted against them. We finished up with Mid-Staffordshire Hospital, where 400 people died as a result of setting up a foundation hospital driven by commercial concerns.

Andrew Haldenby: One of the key conclusions of the inspection report on Mid­Staffordshire was that managers had taken their eye off the ball because they had been preoccupied with Government targets, not their responsibilities to their local populations in being a foundation trust. One should not generalise from individual cases. There are many examples of successful private-sector delivery of healthcare.

Q222 Chair: Indeed, foundation trusts are public sector organisations.

Andrew Haldenby: Yes, they are. But, to take the point about commercial, business-minded organisations, there are many, many examples of successful private-sector organisations in this country and overseas.

Q223 Chair: Would that all our public hospitals had the same infection rates as private-sector hospitals, but that is another matter. Perhaps I may press Mr Davies on the role of private companies and the leaked memo about the meeting between the Minister and the CBI. Will there be a bias against big contractors and big private companies?

Gareth Davies: What is important is to maintain a diversity of suppliers. I think that any good commissioning model will ensure that what you do not do is lock yourself into a single provider. That is where trouble lies. The key is to ensure a diverse range, be they profit making, social enterprises or the public sector. It is about neutrality between models.

Q224 Chair: So, it was a message about neutrality and not about bias?

Gareth Davies: Neutrality is a level playing field. The key question is to make sure you commission services at the right level.

Q225 Chair: I think we have that on the record; it is very useful. Thank you very much.

Matthew Taylor: I know this will be a shocking thought for all of you, but if it was incredibly difficult to find ways of giving contracts to third sector organisations and small organisations and actually they were all going to big organisations, what you might do is have a meeting and let a memo be leaked that said you were trying to do something very different. I see the political art being played here. People are reassured by the memo but the reality is that No. 10 and the Cabinet Office have not found a way of making this a level playing field.

Q226 Chair: Policy wonks are meant to be idealistic; politicians are meant to be cynical. We have role reversal here. Perhaps we can move to accountability. How does accountability work when you are diffusing decision making through the system in the way that is being proposed here? Who will be accountable for what? How do Ministers finish up being accountable for the way public money is spent?

Andrew Haldenby: It is a big question, but I think that from the Government's point of view that is one thing the open public services White Paper, at least on the public services side, is supposed to answer. As Matthew said earlier, different kinds of accountabilities are being talked about throughout the public services, and it is a bit hard to know what the Government's answer is to that yet.

Q227 Chair: But you gave the Government a D on your score card on the issue of accountability? Can you explain that?

Andrew Haldenby: In my view, in much of the public services, as we have talked about, they should be accountable to the people who use them in various different ways. In the case of the police, it is the local electorates; in the case of schools, it is parents.

Q228 Chair: So, Ministers should be able to tell Parliament, "No, that service is not accountable to me but to its users"?

Andrew Haldenby: Yes. In Valencia, which I mentioned earlier, the Government set the contract to the private company to deliver not all but most healthcare for their citizens. They set the rate, which, from memory, is €600 per year per citizen, and define what is to be delivered for that money. It is the private company then that is accountable for the delivery.

Adrian Brown: I think this is an area that requires a lot more thought by the Government. Without really robust alternative sources of accountability that do not come through the Whitehall mechanism it is very difficult for a Minister to stand up at the Dispatch Box and say—

Q229 Chair: Our recommendation will not say that the Government ought to think about this. What should our recommendation be?

Adrian Brown: There are five things that you need to get right if you are to think of accountability. What are you accountable for? Are you accountable for financial propriety or performance of the public service? Different people could be held accountable for different aspects of accountability. We seem to be clear on that. The problem we have at the moment is that, because the vast majority of money flows from the top down, that is where the accountability tends to lie. There is an argument to suggest that, while that remains the case, it is extremely difficult to push real accountability away from the Treasury and the tax-raising powers at the centre.

Second, who are the people to be held to account for these things? Third, who is holding them to account? Is it the public? Is it people acting on their behalf or locally elected politicians or local public servants? Fourth, how will that mechanism of accountability operate? There are all sorts of different ways that it could work. And fifth, crucially, what consequences flow from accountability? If you do not have consequences accountability is meaningless. On all of those questions across the whole of the public service reform agenda there are a lot of blank spaces at the moment.

Q230 Chair: So, how would a Minister go about doing this? For each of the public services under his control would he have an accountability memo, say, which would be put out in a statement to Parliament, saying this is what is being held accountable and by whom and how, so Parliament is aware? Is that a method we could use without destroying the principle of ministerial accountability?

Adrian Brown: Ministers certainly need to be clear what they are and are not being held to account for and then have good answers to those other questions. The problem is that because good answers to those other questions are often lacking—to be honest, Ministers do not like standing at the Dispatch Box and being accused of things over which they do not feel they have control—the natural inclination inevitably as Governments mature in office is to pull accountability back up. It takes real strength from the Government to—

Q231 Paul Flynn: A mature Government that is full of blanks and holes is a guarantee of chaos.

Adrian Brown: It will take time to fill in these blanks and for accountability mechanisms themselves to mature. You cannot say over night that now that you have an elected police commissioner, a mayor or voice in a market, that is how it will work and you should feel happy that is the case.

Q232 Paul Flynn: I have been in public office for 49 years and have lived through reorganisation after reorganisation. I cannot think of one of them by any Government that paid any return for the losses, chaos and disorganisation of the change itself. Would it not be a good thing if perhaps we stepped away from the ferment of reorganisation? I saw a gleam in the eye of Mr Haldenby when he talked about Valencia, where they are to split everything up into 25 bits. I guarantee that within a decade or two someone will say, "No, no; we should join everything together for economies of scale." This is a constant ferment. It is great for you guys, but would it not be better if you all went into monasteries for about a decade or two and let the Government run the system as it is?

Andrew Haldenby: I think the Government do want to leap into this ferment particularly because of the position of the public finances, and it is absolutely right that they have to save money.

Q233 Chair: Mr Davies, what do you have to say about this? As we are trying to implement the Big Society across Whitehall, how will accountability work?

Gareth Davies: I think it will differ from industry to service and will be based on the users. I think that in some areas there will be individual accountability.

Q234 Chair: What about using this IFG matrix?

Gareth Davies: I think there is a lot in what Adrian said. Different types of accountability will work in different situations. Sometimes it will be individual accountability; sometimes it needs to be more community based. Local Government is an obvious example; an elected chief commissioner is another; and sometimes it will happen nationally. Ministers will still need to have some overall system responsibility.

Q235 Chair: Ministers will need to specify who is to be accountable for what.

Gareth Davies: In any successful system what is important is clarity of accountability and responsibility.

Lindsay Roy: Are there not five other basic benchmarks, whether it is micro or macro, in relation to the Big Society initiative? They are fairly simple questions. Where are we now? How do we know? What are we going to do to improve? How will we improve it? How will we know whether we are successful?

Chair: Mr Davies?

Paul Flynn: Five seconds of silence.

Q236 Chair: Do you want to write to us on that one?

Gareth Davies: What are we trying to achieve? It is the Prime Minister's diagnosis that, while we are richer as a country, we are more fragmented and dislocated as a society. What we are trying to achieve is an improvement of well-being. What does that look like in terms of specific measures? I would look at measures of trust and people's sense of power and connectedness. There are lots of different Government data that we are still keeping in terms of DCMS and ultimately society. That is all the attitudinal data. You do not expect to see some behaviour change in terms of giving time and money and the use of different powers, and also the role that more wider independent providers play in public services. More fundamentally, what are we as civil servants doing now? We are implementing the coalition programme and we can be measured by the achievement of the milestones in the business plans. They would be the three tests that I would apply.

Q237 Lindsay Roy: Do these five basic questions not relate to drugs and alcohol misuse in a local community and a project there, right through to the macro issue of the Big Society and the Government's initiative?

Gareth Davies: Obviously, I am looking at this from the Whitehall perspective, but individual communities will face their own issues and problems. Frankly, neither I nor any of my colleagues will ever have enough information to tackle those problems, hence the importance of pushing power down to the lowest possible level and commissioning action at those levels.

Q238 Chair: What you have just said is a very important point. The man in Whitehall does not know best.

Gareth Davies: There is no way I can know what is going on in a range of communities.

Matthew Taylor: But the objective is not to push power down.

Lindsay Roy: But the theme of Big Society, whether it is about small or local initiatives, is fairly simple. Where are we now? How do we know? What we are going to do about it? How are we going to proceed? How will we know we have been successful?

Chair: And what are the consequences of all of this diversity of provision?

Q239 Kelvin Hopkins: One very important point is that I do not think ordinary people in the street have been asked what they want and who they want to provide things. When they come to me they want me to deal with a problem. If it is a private company I have to say that I do not have any power over them. If it is a public service I can write to a Minister, or at least to the council, and get somebody to do something. They are publicly accountable. But the other factor people want, apart from high-quality services, is fairness; they want to be treated equally across the country and have equity. If people feel that in one part of the country they get better treatment than in another, they think it is wrong. How do we achieve equity with the Maoist chaos that you are proposing?

Matthew Taylor: In neither of those regards is public opinion as simple as you suggest it is. Two-thirds of the public say they think more power should be devolved to local level. Exactly the same proportion says that public services should be the same wherever you live. These are obviously rather contradictory positions. When it comes to equality, what people care about is fairness, but that is procedural fairness; it is fairness about the rules. They want to feel that the rules have been fairly applied. I think that is where accountability comes in. It is not so much equity that people demand as a sense that what you get is what you deserve. You will know that the thing that annoys people when you knock on doors in working-class areas is less whether the system is fair and more whether someone down the road is getting something they should not get, or, "My next door neighbour is getting something that I did not get."

Q240 Kelvin Hopkins: It is to do with equity, isn't it?

Matthew Taylor: It is fairness rather than equity. I think accountability goes to fairness, because one of the key criteria for accountability is a sense of fairness. People want to see that public services are being distributed in a way that is transparent.

Q241 Chair: That sounds like you agree with Mr Hopkins.

Matthew Taylor: No, I am not. When he says "the public thinks this", very often what the public thinks is contradictory and depends on what questions you ask them.

Q242 Chair: I appreciate that, but we all know that the postcode lottery is a natural consequence, and whatever the Government do and the more equal they try to make things very often the less equal the outcomes. It is seen as an obligation on Government to make things equal.

Matthew Taylor: About a year ago someone from the Department for Communities and Local Government came to see me to make the case for localism. They said, "What do we do about the postcode lottery?" I said that that was the wrong way round and what we had to do was start with the critique of centralism. The fact is that central control has utterly failed to deliver equitable outcomes if you look at survival rates in hospitals, school performance or police performance. Labour had a highly centralised system. There was no evidence at all that that led to more equitable outcomes. Therefore, localism does have problems to do with postcode lottery, but let's not posit that against a system of central control that led to equitable outcomes, because it did not.

Andrew Haldenby: Recently, the London School of Economics published a study on the first wave of Labour academies, which showed that their results had improved much more than the national average. That is an instance where decentralisation is leading towards that more equitable level of results that you are hoping for.

Q243 Kelvin Hopkins: We can argue from the particular to the general, which I think is always a logical fallacy. People want equity. I think Matthew Taylor made the point very strongly. Devolution to local authorities is one thing; devolution to a private company, or even an unaccountable charity, is something entirely different. Local authorities are accountable because they are elected. When I go to a council and say that somebody has been treated unfairly because one person has been given a house and someone else in exactly the same position has not been given a house, I have a case that can be made public and can embarrass the council. My councillors have to react.

Andrew Haldenby: But the private companies or charities are accountable through their contracts. Very often the contract is more transparent than the existing arrangements. So, the idea that there is no leverage over providers of public services if they are not public sector organisations is not true.

Matthew Taylor: I do not think this is absolutely right. There are different forms of accountability. If I get a punnet of strawberries from Sainsbury's and find that a couple are off and take it back, Sainsbury's will change it on the spot. If I went to the council and said, "I am not happy with the way you have collected my rubbish," it would take months and months. I am not saying that one is better than the other, but there are different models of responsiveness for different kinds of services. To suggest that the private sector is inherently unresponsive and the public sector inherently responsive flies in the face of people's experience. Different forms of accountability and responses are needed in different contexts.

Adrian Brown: The idea that just because a public service is delivered by a non­state actor, a private company or charity, it is not accountable is wrong. That is a mistake. If we start with that assumption we are not even looking at the possibilities of the rich way in which they can be held to account. As to the term "postcode lottery", a lottery implies that it is pot luck. Local accountability means that you can do something about it. If you have in place really strong local accountability mechanisms, which I accept are not necessarily as mature as they could be in many public services, then it is not actually a lottery; it is something that you can do something about through whatever accountability mechanisms are available to you.

Chair: Postcodes are a far too collectivist notion for my liking.

Kelvin Hopkins: When people come to see me and want to be housed, they want to be housed first in a local authority home. Second, reluctantly they might go to a housing association. The last thing they want is a private landlord. Local authority housing is accountable; they know they can go to a councillor. They come to me and we can get things done. They do not want private landlords but sometimes they are forced into private renting.

Chair: You have made your point.

Q244 Lindsay Roy: I think we would all agree that diversity is healthy. For me, what is quite critical in terms of improvement is the sharing of effective practice. To what extent is that part of the Big Society initiative? How have people thought this through in terms of exemplary work in a small location that can be transferred elsewhere?

Matthew Taylor: That is a very good point. In certain areas I worry. I see a system being replaced but I do not understand what system is to replace it. If you take academies and free schools, I see a deep hostility to local education authorities. Tony Blair had the same attitude, so there is continuity there. But when we have thousands of academies and free schools, what is the method by which those institutions will share practice, resources and collaborate? There does not seem to be any framework at all for collaboration, so it seems that there is no interest in collaboration. If it happens, fine; if it does not, fine. That is not the Big Society. I think that, if the Big Society is about one thing, it is about encouraging institutions to collaborate.

Q245 Lindsay Roy: You touch a nerve. As a head teacher part of my role was to share effective practice with other people. As a school inspector, in the same way there was too much focus on inspection and not enough on sharing effective practice.

Andrew Haldenby: It is the case that, particularly in the school sector, networks of independent schools—it could be in the state sector—are coming together to share that best practice around school improvement, but I agree with Matthew that I do not think that is part of the Government's agenda, as it were.

Q246 Alun Cairns: Mr Taylor, would not the point you are making about the Government intervening to encourage or force collaboration, depending on how you interpret it, fly in the face of the decentralisation and localism agenda? Is it not right to say that these free academies will start working together because it will be in their own interests and the interests of those they seek to teach to do so? If it is in their interests that is the whole purpose behind it. There is ownership and responsibility, and that will facilitate co-operation in itself.

Matthew Taylor: Again, I think you have to look at this on a sector-by-sector basis. It may be in the interests of three schools and the communities of those schools that they collaborate, but it may not be in the interests of the best of those three schools to collaborate with the other two. You look incredulous, but I could take you to almost every education system in this country and would be able to point to those schools that want to collaborate and those that do not. It is the same with universities. Generally speaking, the higher achieving the institution the lower its incentive to collaborate. You do not need to collaborate; you are a high-achieving institution. You get the students and pupils you want. Why do you need to collaborate? Why do you want to sully your reputation by working with the school down the road? Therefore, collaboration is a market failure and that is why you need to create incentives for collaboration.

Q247 Chair: In Colchester the two grammar schools are very anxious to collaborate with the comprehensive sector because they want consent for the diversity of provision across the whole system.

Matthew Taylor: They want to maintain support for the 11-plus.

Q248 Chair: They want to maintain consent for their selective education.

Matthew Taylor: Exactly—so they have an interest of course.

Q249 Chair: They have an interest, but I think that disproves your adage that a high-achieving institution does not necessarily want to collaborate.

Matthew Taylor: I am delighted that Colchester is a communitarian paradise, but I can take you to other areas where the public spirit of head teachers is somewhat less.

Chair: Do we have anything further to add? I think it has been a very useful session. One or two extremely useful nuggets have come out of it as well as an enormous amount of background, in particular how the Cabinet Office could take a more directive role in getting Government departments to ask themselves the questions and produce the answers. That may well be the thrust of our report, and certainly might be the direction of the cross-examination of the Minister on this question as we reach the end of our inquiry. Thank you very much indeed. It has been a very rich session, and I am most grateful to you all.

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