Tuesday, March 27, 2007

Blair, Brown and public sector reform - diversity of providers

Last week's government's policy review document on Building on progress: Public services (pdf) included 11 references to a diversity of providers as well as a section entitled "Opening up supply".

But rewinding to last summer's Releasing the resources to meet the challenges ahead: value for money in the 2007 Comprehensive Spending Review (pdf) document published by (and concisely titled by) the Treasury last summer there was a list of the key elements of public service reform as:

1. establishing clear goals, national standards and accountability for performance;
2. devolving decision-making to the frontline and improving the capability and capacity of public servants;
3. engaging public service users and communities in the design, delivery and governance of public services; and
4. empowering users, including through the exercise of choice.

No mention of diversity of provision there. In 55 pages there is only one reference to "diversity and competition among providers" - in the Foreward by the Prime Minister and Chancellor of the Exchequer.

Does this mean anything? A lot? Perhaps not. It does cast some doubt on the suggestion that the velocity of reform will be sustained under a Brown premiership.

Sunday, March 18, 2007

FE Governance - does size matter?

On yesterday's The Bottom Line on Radio 4 (available on Listen Again for one week), there was a discussion about the optimal size of project teams. One of the business people suggested that six or seven was the best size with the maximum practical size being - with complexity of communication increasing exponentially above that.

That wasn't a revolutionary or unique insight - there has been plenty of research on the size of teams - but it struck me that many governance "teams" are a lot bigger in public services.

In social housing the National Housing Federation is encouraging small boards - urging housing associations to avoid having boards more than 12 members. Things are different in Further Education colleges, where governing bodies are typically about 18 members - normally coming from particular constituencies.

Big boards and governing bodies have to constantly confront the risk of degenerating into talking shops. Sir Walter Puckey could have been talking about FE governing bodies when he commented:

Too many board meetings display verbosity among a few and almost complete silence from the rest.

Its not the fault of FE colleges. The Instrument and Articles constituting governing bodies, creates a one-size-fits-almost-all template with limited flexibility around the edges. (There have been cases of FE colleges seeking even larger governing bodies than required by the Instrument and Articles - often after mergers where there was felt to be a need for 11 a side or whatever on the new governing body.)

While the Department for Education and Skills can reasonably have some rules on how governing bodies are constituted, why can't FE colleges be allowed to try new approaches and constitutions that reflect their specific requirements, culture, history, etc?

If "super-colleges" emerge with large turnovers and varied activities, there will be an even stronger case for allowing colleges to try forms of governance more akin to plcs with small boards - perhaps including executive directors. (This form of governance may emerge happen by the backdoor if the private sector take over the activities of failing colleges through contestability.)

There is certainly a need for the voice of customers, staff, local authorities, local civic society,
etc. But would this be better served through some kind of stakeholder council influencing strategy and holding directors to account? This is the model developed with NHS Foundation Trusts.

Even if such a model isn't considered appropriate for any FE colleges, it would be good see smaller and more effective boards and governing bodies.

Friday, March 16, 2007

The budget - the real story for public services

Wednesday's budget will be a budget for business according to Gordon Brown in the Financial Times today.

It'll be a budget for social policy - education, families and welfare to work schemes - according to a Brown ally, John McFall, on ePolitix today. (The ePolitix podcast is notable also for its dropped plastic cup, the rustling of papers and the emergency services sirens in the background.)

The certainty is that the real event is the Comprehensive Spending Review - with a tightening of public spending constraints and a greater expectation that public services will have to deliver "more for less" through efficiencies.

Sunday, March 11, 2007

Monte Carlo: public services and risk management

I was pleased to read in Inside Housing that the Housing Corporation is to require the use of Monte Carlo scenario modelling in appraising the capacity of housing associations to deliver development programmes.

The article is not very clear on what Monte Carlo modelling is. Essentially it is a tool for factoring in uncertainties into financial forecasting. Uncertain variables can compound or counteract each other – Monte Carlo techniques factor this in and calculate a most likely outcome as well as a broader range of outcomes. (Apologies to investment analysts and other experts.) The Housing Corporation published a short paper on the use of Monte Carlo models as a risk management technique a couple of years ago. (Be careful googling "models".)

Generally I don’t like regulators telling independent organisations what to do. But I do hope that other funding bodies will encourage organisations, such as FE colleges, to use scenario modelling.

Far too often organisations delivering public services are only asked to forecast a single future - a gross simplification and dangerous too. In a world in uncertainty in terms of inflation rates, interest rates, pay rises and funding levels, it is vital that organisations manage risks – especially when they are being asked to embark on ambitious plan to build (and borrow for) more homes, new campuses, etc etc.

Saturday, March 10, 2007

Regulation in the news: the NHS and social housing

Red tape is in the news this week.

According to the NHS Confederation, bureaucracy in the NHS is increasing with 56 bodies having a role in inspecting, assessing or monitoring the NHS. Is this necessary? (Report pdf available.)

With greater patient choice and more diversity of providers there should surely competition should replace regulation to some extent at least. Regulation should focus more promoting competition among providers (like OFCOM and other regulators) and disseminating information for “consumers”.

There is the on-going debate about regulation in social housing with the Cave review. This week Inside Housing has an interesting overview of the arguments from the various interested parties. (Sadly the article is not on the IH website.)

I strongly favour proposals for contestability and “choice based management” with the tenants able to exercise choice when their landlords fail them. This mechanism has been suggested by the Audit Commission in their submission to the Cave Review.

Monday, March 05, 2007

Affordable housing and community land trusts - more than talk?

On Saturday I went to the annual conference of the Labour Housing Group. The key note speaker was the Labour MP and former housing minister Nick Raynsford who spoke about the successes of the Labour government (particularly the decent homes standard and improving the quality of social housing) as well as the challenges ahead – notably the need for more new build to meet housing need.

In the afternoon there was an interesting discussion on the issue of mutual home ownership. David Rodgers of the CDS spoke on how these offer the promise of affordability with:

1. The public sector transferring land to a community land trust at nil cost so home buyers only buying the bricks and mortar.

2. The residential property being bought through a co-operative entity with the members buying equity stakes in the entity’s units in a manner similar to a pension fund.

(More information, including A simple guide to Mutual Home Ownership, is available on the CDS website.)

This does sound like an effective mechanism for enabling local people to get on the housing ladder in high cost areas. It has been supported by the Labour party and Liberal Democrats. It now appears to be a Conservative party “policy initiative”. It also figured in the recommendations of the Affordable Rural Housing Commission.

Let’s hope there is some action on this - as well as talk. It appears more promising than the suggestion that of 10% shared ownership.

Friday, March 02, 2007

Further education colleges and choice

This week’s debate about Brighton & Hove City Council’s approach to over-subscribed schools (“lottery” to the media; “equal preference” to the Council; “random selection” to the experts) was interesting.

The issue has arisen from the need to manage fairly the challenges of schools choice. (I’d recommend the podcast on schools choice from Bristol University’s Centre for Market and Public Organisation for background on these kinds of issues.)

For a long time I've been waiting for the simple idea of choice arriving on the agenda of the further education sector. There is now lots of talk of “personalisation” and “contestability” (for the uninitiated - reducing barriers to entry for new providers). Recently “learner choice” has been spotted in the pipeline.

Yet since the creation of the Learning & Skills Council (and to some extent before) there has been pressure for mergers. While some mergers have made sense – particularly where well-managed colleges have effectively rescued weaker ones – others seem to have been driven by a belief in rationalisation and reducing to the sector to 150 or so colleges. There is a real risk that the scope for learner choice as well as the impetus for innovation and the possibility of meaningful benchmarking could be merged away.