Saturday, December 23, 2006

Consumerism in the NHS and other public services

Consumerism and choice in public services have been in the media this week.

On Wednesday David Walker in Guardian Society attacked "the Tesco model" in public services. Essentially his argument was that:

The very basis of social policy is assessment of need, followed by distributive decisions that give relatively more to one group than another.

And, therefore, unlike shopping. (Isn't social policy about more than need assessment and distributive decisions - shouldn't it be about empowerment?)

Then on Thursday BBC4's Analysis programme explored how ideas and expectations of choice are affecting everything from personal relationships to public services. It was a more balanced survey than David Walker's polemic. (The second half of the programme on Listen Again focuses on education and health.)

One of the academics suggested that market forces of choice and competition in public services eventually dissolves the state.

I would ask - is this a problem? As long as the state facilitates, funds and regulates provision - does it matter if its not the provider?

What is important is that the state develops the role of society with social enterprises and mutual organisations like co-ops - so that we are more than individualistic consumers.

Friday, December 22, 2006

HA (and other not-for-profit) boards as a reputational risk

A couple of recent news stories have made me think about housing associations, governance and reputation.

This week, the Housing Corporation released a summary report on the problems involving senior managers and board members at ARHAG Housing Association. Earlier this month, a former board member of Highland Housing Association was placed on the sex offender register.

While it is doubtful that references would have helped in either case, I do think that housing associations have to ensure that they do check out people the bona fides of people keen to join their boards.

Do housing associations (and other not-for-profits) always take up references? I don't think mine were taken up when I joined a HA board. (In fact I've just been reminded that I was never asked to give them!)

Housing associations - how beautiful is big?

The Forward to the "Growing Up" report from the Future Shape of the Sector Commission comments:

The largest associations do have some important natural advantages - their ability to lead and deliver strategic mixed tenure communities, develop more homes with less public grant, and the scale of social capital they can generate within neighbourhoods to name but three - so it is critical for customers, for government and for the sector’s future that we capitalise on them.

I agree that large housing associations (even "mega-associations") can contribute to regeneration and development on a scale beyond that smaller organisations. However, I have some concerns.

The thought of the largest housing associations rivaling some of the huge council housing departments fills me with a degree of concern. I suspect that the size of some housing associations may have contributed to the wariness evident in, for example, in transfer ballots. Large associations have to work that much harder to stay in touch and, when in trouble, be turnaround.

I have dusted off my copy of the Chartered Institute of Housing's "A briefing on the size, efficiency and effectiveness of housing associations" which looked at a range of measures of "big is beautiful" including:

- cost in terms of the Operating Cost Index and financial Performance Indicators (average operating cost)

- effectiveness in terms of repairs, rent loss, tenant satisfaction, etc

Many of the results were ambiguous. It summarised the findings:

We have found no compelling evidence that size has real benefits in terms of the efficiency of organisation, better delivery of services or costs of borrowing. Indeed it appears from the evidence above that a focus on outcomes and effective management is more important than structures.

The CIH Briefing went on to conclude:

In the absence of clear evidence that larger associations deliver better outcomes, there is a need to question whether the possibility of a sector dominated by a small number of large developing associations working within a strong central government agenda is in reality going to deliver the best homes and services in localities.

Without the disciplines of a market or a real means of localised accountability there is a danger that the needs of producers rather than customers will predominate.

While I am positive about many of the sensible recommendations of the Shape of the Sector Commission, I am not so enthusiastic about the prospect of housing associations of 100,000 plus properties.

Monday, December 18, 2006

Resident involvement - and exclusion

The Housing Corporation's "Delivering change through involvement" consultation paper should be welcomed. It generally chimes with the talk in the housing sector and through out public services of changing the emphasis from regulation towards accountability to and participation by customers/patients/users/residents

I fear that the requirement for housing associations with over 250 properties to have at least one resident/tenant board member will attract the most attention and debate – with other issues overshadowed. (I believe that housing associations should have resident board members but feel uncomfortable with yet another regulatory requirement being imposed on housing associations when we are meant to be heading towards lighter-touch better regulation.)

The consultation paper notes examples of good practice in involving residents. Several of these are seen in organisations shaped by a co-operative or mutual (member owned and controlled) approach - Preston's Community Gateway Association, Redditch Co-operative Homes. (More generally, these kinds of organisations may well be the key to making stock transfer attractive and winning the trust of council tenants wary of housing associations.)

One depressing note is hit by the consultation paper when it refers to benefit rules and board members:

The Elton Review [on regulation in housing] recommended that the tax and benefit rules for resident board members in housing associations that pay their board members should be revisited. The Department for Communities and Local Government/Housing Corporation joint action plan for delivering the Elton recommendations confirms that this matter has been raised with the Department for Work and Pensions. Regrettably, there are no plans to change the tax and benefit system at this time.

Currently if a board member is paid (or even if they decline payment when board remuneration is adopted by a housing association), they can on occasions lose all their means tested benefits - which could be well in excess of any payment. When many housing association residents are in receipt of such benefits, this puts actual and potential resident board members in a difficult position. They can be excluded from involvement on housing association boards - never mind the mandatory one resident board member!


Sunday, December 17, 2006

Community Foundation Trusts - NHS changes not in the news (yet)

Just over a week ago on 11 December, the Department of Health published "The NHS in England: the operating framework for 2007/08". It touched on changes in the way that Primary Care Trusts work. Surprisingly after past furore over so-called "privatisation" of primary care, there was no kerfuffle over the document. (Stick "Community Foundation Trusts" into Google News if you don't believe me.) Presumably there will be such cries when PCTs move down this path.

The operating framework talked about extending the Foundation Trust model to primary care. (The FT model was developed in the first instance for hospitals.). The framework elaborated on previous plans for Primary Care Trusts to hive off their direct provision to Community Foundation Trusts. The operating framework said:

community NHS FTs: we have been working with Monitor and a group of interested PCTs to explore the feasibility of NHS FT status as one of the options for providers of community services.We are looking at how this might work in a small number of areas. Like other NHS FTs, Community NHS FTs would be publicly-owned organisations that would be part of the NHS. They would have greater operational freedoms to respond to the needs of commissioners and patients. Further discussions will be carried out with stakeholders around these options, and we will involve staff and their unions, as well as patients and the public, in considering how this work might be taken forward

The Keep Our NHS Public website was strangely quiet on the extension of Foundation Trusts to primary care. However, it is likely that they will condemn this as "privatisation". In the past Frank Dobson referred to the idea of Community Foundation Trusts as "crackers".

The Kings Fund think tank views these proposed organisations positively: “We welcome the idea of community foundation trusts alongside other providers, such as social enterprise organisations, as they provide a solid model for engaging patients and the public. These are likely to be small-scale organisations however and so shouldn’t be overly burdened by bureaucracy.”

The Department of Health appears to continue to support the involvement of social enterprises in primary care saying that they "bring new opportunities for PCTs to enhance the quality of health and social care provision and to better fit services to the needs of particular client groups."

Community Foundation Trusts would be an option, often along side social enterprises. There may be a scale threshold on Community Foundation Trusts so there number may be restricted.

If Community Foundation Trusts operate with the accountability and membership arrangements of mutual societies, they should be welcomed - even if there are only a dozen or so such organisations. Hopefully, they will more actively promote these arrangements of governance by the members of the Trust than the Foundation Hospitals. (Indeed, these governance arrangements will be particularly important for Community Foundation Trusts where they account for a substantial proportion of local primary care provision.)

Friday, December 15, 2006

Public Sector Rich List - pay and good governance

This makes interesting reading. The Taxpayers' Alliance have published their Public Sector Rich List. (The list does not of course include the social housing sector where there have been controversies.)

There are three people in the public sector who earn more than £1 million a year. The Prime Minister is only the 86th highest paid person in the public sector.

I don't have a problem with high salaries in the public sector - as long as they are rewards for success rather than failure.

I do worry that some organisations in the public and not-for-profit sectors have weak arrangements for the scrutiny of executive remuneration and appraisal. Unless robust arrangements are in place, it can all end in tears and another huge pay-out when senior managers aren't up to their roles.

When did your organisation last review the adequacy of it remuneration committee and arrangements for the remuneration and performance of top staff?

An apology to The Guardian - the 3rd Sector report

I should apologise. The day after my last post The Guardian ran an article in its Society section: "Too much faith in third sector fizz". So the report on Partnership in Public Services: an action plan for third sector involvement was not in the end so ignored by the mainstream media.

But the Society Guardian editor Patrick Butler did try to savage the Third Sector Action Plan.

For example, he commented:

Take the plan's intriguing idea that the third sector should not merely provide services but help design them too - this from a government supposedly in ideological thrall to the purchaser-provider split. Imagine the uproar if ministers declared that private providers - Capita or Group 4 Securicor, say - should help set the terms of the service they intend to provide.

But the overwhelming majority of not-for-profits are nowhere near as big and powerful as Capita and Group 4. Moreover, their motivations are somewhat different being not-for-profits.

He went on:

But that's not all. The plan also envisages a stronger input into public services by user-led organisations. In theory, this allows the possibility that the same charity might help design a service, run the service contract, monitor service quality through its user groups, and (through its campaigning arm) attack the local authority that let the contract.

I don't think that is likely. But if it was, I am sure that the public sector is (generally) sufficiently conscious of probity and conflicts of interest to preclude that.

On much firmer ground he argues:

The plan argues that such close engagement between users and providers and commissioners can be positive, in the spirit of "co-production". This is true. But it also requires deft management skills, and even supporters of the third sector admit to serious concerns about its leadership capacity and the relatively underdeveloped nature of its governance and accountability arrangements.

The Action Plan does talk about training people in both public sector procurers and third sector clients. Arguably more should be in the Action Plan on the issue of governance and management in the third sector. Many of us have horror stories we know of where the third sector has gone wrong. (Of course the government has done work on this - for example, setting up the Governance Hub.)

Hopefully the Guardian will give the third sector a right of reply.

Tuesday, December 12, 2006

Third Sector reports come fifth and sixth (or worse) in media coverage

Amidst the reports from Stern, Barker, Eddington and Leitch, the publication of the interim report of the Third Sector Review and action plan on Third Sector involvement in public services were somewhat overshadowed.

There was little in the press (a footnote in "Inside Housing" and a couple of other references can be found on Google News). There was even less in blogs.

If you do want to know more (but can't wade through the reports themeselves), there is a brief overview available in a news release on the Cabinet Office website.

Given the likelihood that the not-for-profit sector will play a bigger role in the delivery of public services - not least in the NHS - these really are important reports. They should be up there with the other reports.

In his Pre Budget Report, Gordon Brown announced along side the Third Sector reports:

- a commitment to three-year funding settlements; and

- a community assets fund of £30m to enable communities and community groups to take on the management and ownership of assets.

(Of course the stability of multi-year funding can be a little superficial.)

Lets hope that the Tories talk of civil society playing an important role in dealing with social problems will encourage Gordon Brown to carry on thinking of how the not-for-profit sector can be nurtured as a key player in public services.

Sunday, December 10, 2006

Book of the year? The NAO on procurement in the FE sector?

At this time of the year the papers are full of articles surveying the literary output of the year. No one will listing any National Audit Office reports as among the best reads of 2006.

Sadly NAO reports are generally ignored - often overlooked by the people who can get most value out of them. I fear that the NAO's review of procurement in Further Education colleges published in October will fall into this category.

Each year the 384 English FE colleges in England spend £1.6 billion on goods and services from books and stationery to examination fees and energy bills. The NAO found that many colleges need to improve their processes substantially with big savings being generated.

The report recommended that colleges should:

- Raise the priority of improvements to procurement.

- Develop a professional approach to procurement.

- Review their procurement data and how it can be better analysed to provide useful management information.

- Assess their existing mix of procurement methods against good practice benchmarks.

- Improve their supplier management.

- Collaborate with other organisations and through consortia where they can offer procurement expertise, reduced transaction costs and better quality and/or price.

Of course, organisations in other sectors can also learn from this kind of thinking about buying.

While some organisations may not be big enough to have their own procurement specialists they can still buy in or share the expertise that is available.

Saturday, December 09, 2006

Spend, spend, spend? Or a slow squeeze on public services?

The future levels of public expenditure seemed to be rather overlooked in the media coverage about the Pre Budget Report.

Sometimes the analysis was just wrong - like Kevin Maguire's comments in the Daily Mirror on Gordon Brown's strategy: "His masterplan is to spend, spend, spend on public services then force the Tories into a corner as the party of cuts."

The real story - not just of the PBR but before too - is that the time of (relative) famine for the public sector is arriving. It might not seem like it to many in the public sector but we've had the years of plenty - and they are coming to an end.

The most considered analysis can be found from the independent Institute of Fiscal Studies. Their immediate review of the PBR stated:

"The weakness of the underlying public finance forecasts suggests there will be no let up in Mr Brown's tough spending negotiations with Whitehall departments. In addition to sticking with his Budget assumption that public spending (excluding investment) will grow by just 1.9 percent a year on top of inflation over the three years of the forthcoming comprehensive spending review, the Chancellor pencilled in another year of spending growth at the same rate in 2011/12. This suggests that Mr Brown is ready to fight the next election presiding over a steady fall in public spending as a share of national income. This did not stop him from attacking the Conservatives for proposing the same thing as a long-term goal.

Real increases of 1.9% sound impressive - but in recent years real increases have been about twice that!

On the IFS website there are several Powerpoint slides on issues around the PBR including one on public spending.

The IFS's expert suggests:

"Spending plans could prove incompatible with aspirations. Plans could be subsequently topped up, but would require additional finance"

What can be done by those managing public services caught between the rock of tightening resources and the hard place of government targets and aspirations? One approach can be seen in the NHS with training budgets being cut. That may not be too healthy in the long term.

As well as the efforts to trim administration and save on procurement, perhaps more thought should be given to streamlining processes so that they focus more better on delivering customer satisfaction and outcomes. Research by the ODPM shows how effective this can be the field of housing.


Friday, December 08, 2006

Gordon Brown, blueprints, green homes

One of the key elements in Gordon Brown's Pre Budget Report this week was the pledge to set "a long term framework for curbing the carbon emissions from homes - 30 per cent of all emissions." Next week Ruth Kelly as the Secretary for Communities will set out plans to "ensure that within 10 years every new home will be a zero carbon home, and we will be the first country ever to make this commitment." There were plans for stamp duty concessions on new zero carbon homes as well as suggestions of energy audits and cheap loans to improve the energy efficiency of existing homes.

These moves are welcome if a little overdue.

Useful background on the issues can be found in "Blueprints for Green Homes: A housing & energy policy for the 21st century" from two Labour party affiliated groups - the Socialist Environment & Resources Association and the Labour Housing Group.

The report touches on the interesting issue of the high carbon footprint of building houses. (Will Gordon's zero carbon homes be zero only after they are built? I fear so.) This issues poses challenges to the demolition policies which are a key element in the response to housing market collapse in parts of England - like on Merseyside where there have been more homes than demanded as a result of demographic and social changes.

On a brighter note, some housing associations are doing something. For example, Family Housing in Birmingham with its award-winning eco home which is actually an existing home. (I declare an interest - I am a Family board member.)

McKinsey and public sector reform

A brief but interesting article on public sector reform can be found on the McKinsey Quarterly website. (You'll need to register but its free and painless.)

It concludes:

Reform in the UK public sector is heading in the right direction, but unless government departments and public services have the necessary leadership and capabilities, the results will be disappointing.

One omission from the article is any mention of how mutual forms of organisation can improve public services. There are ideas out there from people like the think tank Mutuo.

We are seeing this in the UK - some tenant-led housing associations taking over council housing; new forms accountability in the NHS with Foundation Trusts.

The article does seem to think of public services and reform in terms of government, officials and managers.

To empower people and renew trust, reform need to put the customers of public services centre stage.