The prime minister’s drive to open up public services is threatening to replace “public sector monopolies with private sector oligopolies”, a charities’ leader has said.
Sir Stephen Bubb, chief executive of the Association of Chief Executives of Voluntary Organisations, was among David Cameron’s most high-profile supporters when he launched the initiative in July 2011, standing alongside him as he declared the old approach to delivering public services as “broken”.
However, in a letter to Mr Cameron, seen by the FT, Sir Stephen says that the implementation of public service reform has too often “emphasised narrow cost savings” rather than “engagement, collaboration and social value”.
He adds: “The public sector monopolies that you were so keen to break open have been threatened by new private sector oligopolies.”
In particular, Sir Stephen, who led a government-commissioned review of choice and competition in the health service, cites health reforms, which have handed the majority of the NHS budget to groups of clinicians.
The move was intended to give financial clout to organisations that were closer to the communities they served. However, Sir Stephen claims, “private sector companies have been highly aggressive in their tactics and have cornered the market through their purchasing power”.
Sir Stephen adds: “The result is that there exist now in our country large deserts of anti-competitiveness: an oligopoly of large private companies that dominate service delivery contracts and relegate civil society and other smaller providers to the margins.”
Charities that had tried to work with the private sector had often been “set up to fail”, particularly those involved in the work programme, which aims to help the long-term unemployed find jobs, he writes.
Several private sector “prime” contractors had been “guilty of poor treatment of civil society subcontractors, including failing to refer sufficient clients and refusing to lessen the degree of financial risk to which subcontractors are exposed”, he adds.
Making clear he still supports the prime minister’s original aim, Sir Stephen said the ideas Mr Cameron set out in the Open Public Services white paper “are as relevant and important today as in 2011”.
He called for a Whitehall-led review of how to give people more say “across every interstice of our public services, their commissioning, design and their delivery”.
Steve James, chief executive of The Avenues Group, a social care charity that supports people in their own communities, endorsed Sir Stephen’s views, and said that his organisation had, in effect, been excluded from tendering for work with government, partly because it did not have the scale to deliver big contracts.
Mr James said: “Despite the rhetoric about patient choice and services being wrapped around individuals, it’s increasingly being commissioned in large block contracts of episodic care. People don’t live their lives in that way.”
He added: “We are not in a position to bid for £100m community health tenders – it is completely beyond us.”
The Cabinet Office said: “We have opened up public sector contracts to the charity sector to an unprecedented degree, from health services to probation. We have also put in place a comprehensive package of support to help the sector make the most of those opportunities, investing in their commercial capacity and supporting their to access finance.”
Homeless group’s hopes dashed
St Mungo’s, a long-established charity that specialises in helping homeless people, had high hopes of playing a role in the government’s scheme to get people off benefits and into jobs when it launched in 2011, writes Sarah Neville.
But the following year it was forced to withdraw from the work programme, saying it had received no referrals from the contractors with which it had partnered.
In his letter to the prime minister, Sir Stephen Bubb, a charities’ leader, cited St Mungo’s as one example of “well-regarded, skilled, specialised civil society organisations [that] have been forced to pull out of delivery on grounds of cost”.
Mike McCall, executive director of operations at St Mungo’s, said: “We took the decision with regret as we had hoped that . . . through the work programme we would be able to assist people who were long-term unemployed and disadvantaged to gain jobs.”