Serco Group Plc · LSE:SRP
Serco — CORE Seminar, Ottawa 2006
54 slides from Serco's conference presentation, Jan 11, 2006
Slide 1: 'An obsession with delivery': public service reform in the UK
presentation to CORE Seminar Ottawa, Canada 11 January 2006 ‘An obsession with delivery’: public service reform in the UK The Serco Institute
Slide 2: Government as a 'work in progress'
Government as a ‘work in progress’ “What of policy? Our approach is ‘permanent revisionism’, a continual search for better means to meet our goals, based on a clear view of the changes taking place in advanced industrialised societies.” - Tony Blair, 1998 The Serco Institute
Slide 3: Blair's 'work in progress'
Blair’s ‘work in progress’ ¾ A clear view of the changes taking place in the world ¾ A strong belief that these changes will redefine the role of public services in society ¾ A firm conviction that social democrats must preside over that re-definition ¾ A vague idea of what public services will look
Slide 4: What are these changes?
What are these changes? ¾ Globalisation – markets, mobility, migration ¾ Remorseless technological innovation ¾ Mass communication & mass culture ¾ Rising consumer expectations ¾ The speed of change The Serco Institute
Slide 5: Some Implications 1: Adaptability
Some Implications 1: Adaptability “In an era of rapid globalisation, there is no mystery about what works: an open, liberal economy, prepared constantly to change to remain competitive.” - Tony Blair, 2005 The Serco Institute
Slide 6: Some Implications 1: Adaptability
Some Implications 1: Adaptability “It means replacing monolithic, ‘one-size-fits- all’ state provision with a far more flexible and adaptable system that encourages innovation.” - Tony Blair, 2003 The Serco Institute
Slide 7: Some Implications 2: Affordability
Some Implications 2: Affordability “The basic principle for me is that the service should be based on need, not ability to pay .” - Tony Blair, 2001 election The Serco Institute
Slide 8: Some Implications 2: Affordability
Some Implications 2: Affordability And yet - “In parts of the welfare state, like pensions and transport, we have to find new ways of funding services, based on contributions from citizen and state.” - Tony Blair, 2003 The Serco Institute
Slide 9: Some Implications 3: Universality
Some Implications 3: Universality “We have to confront the 20/60/20 society – 20 percent well off; 60 percent reasonably off; 20 percent left behind.” - Tony Blair, 2003 The Serco Institute
Slide 10: Some Implications 3: Universality
Some Implications 3: Universality “One of the most glaring faults [in the NHS] is the huge variation in performance between parts of the service.” - Alan Milburn, 2002 The Serco Institute
Slide 11: Some Implications 4: Accountability
Some Implications 4: Accountability “The public want education and health services free at the point of use – but they don’t want services uniform and undifferentiated at the point of use, unable to respond to their individual needs and aspirations.” - Tony Blair, 2003 The Serco Institute
Slide 12: Some Implications 4: Accountability
Some Implications 4: Accountability “The relationship between state and citizen has changed. People have grown up. They want to make their own life choices.” - Tony Blair, 2004 The Serco Institute
Slide 13: Modernising public services
Modernising public services Performance accountability Diversity Contestability User choice The Serco Institute
Slide 14: Modernising public services
Modernising public services Performance accountability The Serco Institute
Slide 15: Performance accountability: the politics
Performance accountability: the politics “For the public, what matters is what is achieved. They are less concerned with the processes of government. . . Across the world, a revolution is underway to refocus government on outcomes. . .” - Tony Blair, 1998 The Serco Institute
Slide 16: Performance accountability: the policy agenda
Performance accountability: the policy agenda “It only becomes delivery when it makes a difference.” - Sir Michael Barber, 2005 The Serco Institute
Slide 17: Performance accountability: the results
Performance accountability: the results Percentage of 11-year olds achieving Level 4 or above in English 90 85 80 75 70 65 60 55 50 1996 1997 1998 1999 2000 2001 2002 2003 2004 The Serco Institute
Slide 18: (i) Public Service Agreements: the politics
(i) Public Service Agreements: the politics ¾ To ensure that budget allocations were tied to outcomes: the introduction of 3-year budgeting a significant increase in spending on public services ¾ To systematise performance accountability across government The Serco Institute
Slide 19: (i) Public Service Agreements: the framework
(i) Public Service Agreements: the framework ¾ Public Service Agreements, signed with Treasury every 2 years ¾ Service Delivery Agreements (details on how PSAs will be delivered) ¾ Technical Notes (how performance will be measured) ¾ NAO audit of systems underlying targets The Serco Institute
Slide 20: (i) Public Service Agreements: the results
(i) Public Service Agreements: the results “Some butterflies were caught, no elephants stopped.” The Serco Institute
Slide 21: (ii) Intervention: the language
(ii) Intervention: the language “We have to deal with failure, which we have never managed to do inside a state monopoly.’ - Alan Milburn, Health Secretary, 2002 The Serco Institute
Slide 22: (ii) Intervention: the policy model
(ii) Intervention: the policy model “A system that has the capacity to know early whether something is going wrong, intervenes and prevents it.’ - Sir Michael Barber, 2005 The Serco Institute
Slide 23: (ii) Intervention: the framework
(ii) Intervention: the framework ¾ Separate and clearly identifiable service units ¾ Clear performance standards for service levels ¾ Objective methodologies for measuring performance ¾ Independent inspection service ¾ Publication of results ¾ Willingness/capacity to intervene and impose change ¾ A
Slide 24: (ii) Intervention: the tools
(ii) Intervention: the tools ¾ ‘Fresh start’ or ‘reconstitution’ ¾ Send in ‘hit squads’ of proven managers ¾ Franchise the management to private firms ¾ ‘Take-over’ by a successful public service ¾ Market-testing and full private operation The Serco Institute
Slide 25: (ii) Intervention: the results
(ii) Intervention: the results 2001: Intervention in 20 failing LEA’s, with 9 outsourced to private management. 2004: The 9 private sector LEAs had: ¾ improved more than the national average ¾ improved more than the 11 non-outsourced LEAs ¾ improved more than LEAs with similarly low levels of attain
Slide 26: (iii) Rewards: the politics
(iii) Rewards: the politics “. . . a funding system that rewards the successful and takes something away from under-performance.’ - Sir Michael Barber, 2005 The Serco Institute
Slide 27: (iii) Rewards: the tools
(iii) Rewards: the tools ¾ Greater freedom from inspection & monitoring ¾ Freer access to capital resources ¾ Authority to vary national agreements on pay & conditions ¾ Freedom to trade & take over failing institutions The Serco Institute
Slide 28: (iii) Rewards: the results
(iii) Rewards: the results The jury is still out, but there is little evidence of success thus far. The Serco Institute
Slide 29: Performance accountability: new directions
Performance accountability: new directions “In our third term, we must seek to strike a new balance between centrally imposed targets and empowering public service customers to drive performance themselves.” - John Hutton, 2005 The Serco Institute
Slide 30: Performance accountability: new directions
Performance accountability: new directions “But it is handing power to individual service users – increasing the levers they can pull to get the public services they want – which will be the most powerful dynamic for change in the future. Extending the ability to choose between public service provid
Slide 31: Modernising public services
Modernising public services Performance accountability Diversity Contestability The Serco Institute
Slide 32: Contestability: the politics
Contestability: the politics “Long gone are rigid demarcations between public, private and voluntary sectors, at least in the public’s mind.” - Tony Blair, 2004 The Serco Institute
Slide 33: Competition & contracting: many different frameworks
Competition & contracting: many different frameworks ¾ PFI/PPP – right across government ¾ Interventions – education sector ¾ Additional capacity – ISTCS in health ¾ Market-testing – prisons ¾ Best Value – local government ¾ Shared services – central & local government The Serco Institute
Slide 34: Competition & contracting: some examples
Competition & contracting: some examples The Serco Institute
Slide 35: PFI/PPP: the results
PFI/PPP: the results ¾ 700 PFI deals signed ¾ Major infrastructure spending programme delivered on-time & on-budget ¾ Reduced construction times ¾ Reduced construction & operating costs The Serco Institute
Slide 36: PFI/PPP: the results
PFI/PPP: the results 0-10% 15-30% 10-15% The Serco Institute
Slide 37: Contestability: the real policy agenda?
Contestability: the real policy agenda? Contestability: ‘a latent but real possibility that services can be switched to other organisations’. The Serco Institute
Slide 38: Diversity: the language
Diversity: the language “Partnership between public, private and voluntary sectors is of critical importance in generating diversity.” - Tony Blair, 2001 Election The Serco Institute
Slide 39: Diversity: the language
Diversity: the language Diversity = contestability Diversity = innovation Diversity = choice Diversity = a ‘mixed economy’ The Serco Institute
Slide 40: Diversity: the policy agenda
Diversity: the policy agenda Social enterprises Private providers Voluntary providers The ‘Mixed Economy’ Trusts & other hybrids Public providers The Serco Institute
Slide 41: Diversity: the results
Diversity: the results The jury is still out, but very promising The Serco Institute
Slide 42: Modernising public services
Modernising public services Performance accountability Diversity Contestability User choice The Serco Institute
Slide 43: Choice: the politics
Choice: the politics ¾ More than two-thirds of people say choice in public services is important to them ¾ 80% believe that public services need to start treating users as customers ¾ 74% believe choice of hospital will push up standards for everyone ¾ 50% say patients need more control over their t
Slide 44: Choice: the politics
Choice: the politics ¾ Strongest support from lower socio- economic groups, women & the north ¾ Choice is regarded as being more important for the disadvantaged ¾ No enthusiasm about paying more for choice through higher taxes The Serco Institute
Slide 45: Choice: the language
Choice: the language “The public want the consumer power of the private sector, but the values of the public sector.” - Tony Blair, 2003 The Serco Institute
Slide 46: Choice: the language
Choice: the language “We need a patient-centred NHS; and a pupil- centred school system. . . Putting the user first. . .” - Tony Blair, 2003 The Serco Institute
Slide 47: Choice: the language
Choice: the language “The right to demand the best and refuse the worst, and do so, not by virtue of your wealth, but your equal status as a citizen.” - Tony Blair, 2004 The Serco Institute
Slide 48: Choice: the language
Choice: the language “We know that reforms that offer public service providers more incentives to give consumers an improved service are powerful tools in driving up standards.” - John Hutton, 2005 The Serco Institute
Slide 49: Choice: the policy agenda
Choice: the policy agenda Health: 1. Expanding choice of hospital provider 2. Towards full choice - ‘Payment by Results’ 3. Choice of provider - Independent Sector Treatment Centres Education: 4. Diversity in schooling - specialist schools 5. Parents can choose to establish a school - City Academies
Slide 50: Choice: the results
Choice: the results Health: ¾ 70% of patients in London exercised their choice to get faster treatment ¾ NHS trusts gave responded by improving service ¾ Waiting lists have fallen dramatically (>15 months → < 9 months) Education: ¾ Specialist schools outperform comprehensives ¾ City Academies – popu
Slide 51: Choice: means or end?
Choice: means or end? ‘Ultimately, it is not choice that matters, but the responsiveness of the particular service to individual needs.’ - Audit Commission, 2004 ‘People have a sense of control when dealing with the private sector. They can take their custom elsewhere: Ask me. Involve me. Value me.’
Slide 52: Modernising public services
Modernising public services Performance accountability Diversity Contestability User choice The Serco Institute
Slide 53: Future directions: market management
Future directions: market management “Local authorities will need to take a view about what market structures. . . are best suited to competition and security of supply. They will also need to influence those structures. . .” - John Hutton, 2005 The Serco Institute
Slide 54: Future directions?
Future directions? “Every time I’ve introduced a reform in government, I wish in retrospect I had gone further.” - Tony Blair, 2005 The Serco Institute