The government says it will encourage commissioners of public services to break up contracts into smaller lots “where appropriate” to enable smaller providers to participate in service delivery.
And it will push commissioners to disclose TUPE liabilities at an early stage in the commissioning process so that voluntary sector providers can price their bids more accurately.
The commitments are contained within the Open Public Services White Paper published yesterday and form part of a host of policy proposals that the coalition promises will “signal a decisive end to the old-fashioned, top-down, take-what-you-are-given model of public services”.
The reforms will also “profoundly change the future roles of both central and local government”, the paper states.
Principles of Open Public Services
Various principles underpin the new framework: where possible, people should have direct control over the services they use; power should be decentralised to the lowest appropriate level; and competition should be encouraged amongst a range of providers to improve service quality. Access to services must be fairly available to all, not just those able to pay, and service providers must be responsive to the needs of the people they serve.
“We are determined to create public services that are directly accountable to those who use them, and where providers stand or fall by their ability to deliver a good service, regardless of which sector they are from,” the paper states.
The White Paper suggests that providers of public services from all sectors will need to publish information on performance and user satisfaction. The government will consult on how this can best be achieved in each individual service, including whether such data should be collected in a standardised form to enable comparison and transparency.
It will also consult on possible ways to “establish zero tolerance of failure on a service-by-service basis”, and examine how Ombudsmen can play a bigger part supporting people’s ability to exercise choice in specific services.
Financial incentives
Payment-by-results models will help to boost the effectiveness of services and an annual innovation prize will be created, where David Cameron (pictured) and Nick Clegg will award the top ten public sector bodies that demonstrate the most innovative ways to deliver better quality and more responsive services within their budget. Payment-by-results will be applied right throughout the offender rehabilitation sector by 2015.
The government said it recognised the limits of a “pure market approach” in improving equity of provision to different social groups, and insisted it would “intervene in markets to advantage those who would otherwise lose out”.
“We are therefore establishing financial incentives and regulatory interventions to tilt the playing field to ensure fair opportunities…and prevent, for example, ‘cream-skimming’ of easier-to-treat patient groups by new providers in the NHS.”
Such incentives are already in place under the Work Programme, where payments range from £13,700 for each ‘hardest-to-help’ person that finds sustainable employment, to £3,800 for those that don’t need much support to secure a job.
Addressing barriers to entry
The White Paper promises the government will regularly assess and tackle barriers to entry and exit that may prevent diversity and innovation in service delivery, particularly by smaller private, voluntary and charitable enterprises.
It will consult on whether voluntary sector bodies could be supported to acquire current public sector providers that would benefit from being run as a specialised charity, say in offender management or children’s services.
Deregulation will continue where appropriate and leadership for this agenda is being brought into the Cabinet Office.
The government will also consult on whether providers should have right to appeal to an independent body if they feel they have been unfairly precluded from a commissioning process.
Response to Modernising Commissioning
A response to the Modernising Commissioning Green Paper will be published shortly, addressing access to open markets, bureaucratic barriers to entry and improving commissioning. And the government promised to “keep under review” those VAT barriers that impede sector organisations from delivering services.
The paper also seeks to reassure the sector about public spending cuts. “We do not believe the voluntary, community and social enterprise sector should bear a disproportionate burden from reductions in public spending. Therefore, we will introduce greater transparency for spending decisions so that communities can see where reductions in public spending have fallen.
“In addition, each year the Prime Minister and Deputy Prime Minister will meet and recognise the ten local authorities that are most supportive of the voluntary and community sector.”
Next steps
The consultation on the White Paper will take place from now until September, and in November the coalition will set out how various departments will implement the Open Public Services policy over the rest of this Parliament. From April next year departments will have to publish regular progress reports.
