Friday, 23 December 2011

Who is really creating neighbourhood level outcomes – self organising communities, co-production or public agencies?

In spite of several decades of intense research on public participation, there is still very little understanding of what the relative roles of citizens and public agencies are in creating publicly-valued outcomes. Research into public participation has focused on the process, not the outcomes, while evaluation of public interventions has tended largely to ignore the inputs made by citizens. Both these stances have been wrong-headed and have led to serious misunderstanding of the cost-effectiveness of public policies. The time has come to put this right.

One important attempt to correct this ‘citizen-blindness’ in public policy is represented by the Modelling Birmingham project, which is establishing cause-and-effect chains between public interventions and key quality of life outcomes in the city. An important part of this project is intended to be the quantification of citizen inputs as well as inputs from the public sector and business, leading to a whole-systems approach to the evaluation of local governance mechanisms, rather than the public-sector-centred approaches used by government in recent decades.

To understand the potential of neighbourhood governance, therefore, we need to explore much more deeply the levels of self-organising in local communities, the levels of self-help by potential and actual service users and the levels of co-production, where both public agencies and citizens make important contributions to services. Quantitative evidence on these pathways to outcomes is very scarce – the Governance International survey of five EU countries in 2008 is one of the only data sources which explicitly looks at both individual and collective co-production of public services.

Such evidence as we have available suggests that citizens are most willing to make a contribution towards improving public services when it involves them in relatively little effort and when they do not have to work closely with other citizens or staff or professionals in the government – i.e. individual co-production (e.g. the 1.8m regular blood donors, the 8m people signed up as potential organ donors, and the 10m people within Neighbourhood Watch schemes) is easier to promote than collective co-production. Of course, this doesn’t mean that collective co-production is unimportant – in the UK there are about 350,000 school governors, about 5.6m people helping to run sports clubs, 750,000 people volunteering to assist teachers in schools and 170,000 volunteers in the NHS, who befriend and counsel patients, drive people to hospital, fund raise, run shops and cafes, etc. However, the imbalance between individual and collective co-production is worrying, as there is a strong suggestion in the literature that collective co-production is likely to have larger, more sustainable impacts on quality of life outcomes than individual co-production. Our current AHRC Connected Communities project (Bovaird and Stoker – ‘Activating the Big Society’) is exploring ‘nudges’ to identify ways in which the public sector can influence more citizens to engage in collective co-production. It seems likely that more vigorous and imaginative neighbourhood action will be key in the future to unlocking the potential for collective co-production – and for turning ‘self-help’ and ‘self-organising’ activities into genuine co-production with the public sector.

There have been several major problems so far with the public sector’s approach to neighbourhood working (including the wholly inappropriate scale of the ‘neighbourhoods’ which many public agencies have identified (typically far larger than any ‘neighbourhood’ with which local people identify), the unimaginative ways in which people have been invited to get involved, the lack of careful segmenting of who is invited to do what, and the unwillingness of local service providers clearly to differentiate their offer in differ small-scale geographies). Most of these actually derive from one major assumption of public policy makers – that larger scale is essential for more cost-effective services. This assumption now looks seriously misguided.

The conventional wisdom about public services improvement over the last decade, starting from the ‘unitary reforms’ in England, becoming strongly evident in the Beacham Report for Wales, and still partly informing the Christie report in Scotland, has been a differentiation of public services according to their potential for economies of scale in provision:

• Transactional services are seen as having big economies of scale, suggesting centralisation at county, regional or even national level, but subject to competition and regulation.
• Personal services are seen as having few, if any, economies of scale, suggesting a ‘commissioning’ approach (often procured externally) and increasingly co-produced with users and communities.
• Infrastructure-heavy services are seen as needing flexible solutions, partnering with other services and partners to ‘sweat the assets’, e.g. through co-location in service hubs.
• Regulatory services are seen to determined by ‘economies of scope’, seeking to operate at a scale justifying employment of a full team with all specialisms needed for the function.

However, this model, though valuable a decade ago in shift thinking from the previous ‘service silo’ fixation, is no longer tenable. The analytical goalposts have moved, as our understanding of the strategic management of services has widened and deepened. There is now growing realisation that:

• ‘transactions’ are often holistic, with an ‘social component’ – while some ‘back office’ services can indeed be centralised without penalty to cost-effectiveness, many transactions which involve direct contact with citizens can be used for a variety of valuable interactions, many of which get lost completely when the service focus is on a concept of ‘efficiency’ which boils down to minimising contact with the citizen;
• ‘personal’ and ‘infrastructure’ services are seen to have multiple outcomes and therefore ‘commissioning’ is multi-stakeholder – current commissioning processes are often absurdly tunnel-vision (e.g. DWP programmes for getting people into work, which ignore, do not reward, and therefore underachieve, the much wider outcomes often created for the service users) and therefore sub-optimal;
• regulatory services can now be partly externalised, so that internal ‘economies’ of scope are much less important than previously thought. Moreover, key external providers of the ‘specialisms’ needed for regulation are likely to be service users and other citizens, who understand much more clearly than ‘technical’, ‘professional’ or ‘managerial’ staff how, and to what extent, the service produce the desired outcomes.

Given the major changes to the way in which we now view services, including public services, there is the possibility of analysing the potential role of neighbourhood governance in service improvement. In particular, the following criteria become important:

Which of the outcomes desired are likely to benefit from neighbourhood inputs?– e.g. the outcomes specified in the Children’s Act (healthy, safe, enjoy & achieve, positive contribution, economic wellbeing) clearly will benefit from neighbourhood action, at the very least to improve the levels of ‘enjoyment’ of children and young people – and probably for most of the other outcomes as well.
When activities contributing to ‘services’ are unbundled, which of these activities could be delivered at neighbourhood level? – i.e. which elements of the ‘value chain’ (governance, commissioning, prioritisation, planning, design, financing, management, delivery, assessment) are likely to be strengthened by inputs at neighbourhood level?
Which configurations of organisations and partnerships are likely to be cost-effective in providing these activities to achieve these outcomes? – e.g. what roles can citizens, councillors and other stakeholders play in these organisations and partnerships
How resilient is the service system, given the risks of failure? – In particular, to what extent could neighbourhood involvement enhance the resilience of the service system and/or the desired outcomes?

The lesson from applying these criteria is clear: Almost ALL services can benefit from being devolved to neighbourhood level, at least in part. We should therefore expect that most of them will therefore be so devolved in the future, at least in some local authorities, as the possibilities become more apparent. Therefore, the real question is not “Should we have EITHER large-scale OR neighbourhood level services?”, it is “TO WHAT EXTENT and HOW should we organise the neighbourhood contribution to services?”


The world of service management is changing radically across the world and in all sectors. In this period of All Change!, the old assumptions no longer hold – a bold new conception is needed for how services can be improved.
This era of radical change comes with huge risks – risks associated both with the scale and nature of the changes being tried but also with misguided attempts to suppress the need for change.

Key to the changes taking place are two major global renegotiations of the relationship between citizens and the state. First, citizens expect their potential role in governance to be appreciated, respected and embedded within decision-making processes. All public services need to come to terms with this new governance agenda. At the very least, commissioning of public services cannot remain an ‘expert’ or ‘technical’ process, divorced from the priorities of local politicians and uninformed by the wishes of local people.

Secondly, the relationship between service providers and service users is everywhere being renegotiated – perhaps more quickly in the private sector (where users are now expected to carry out many of service activities on-line, only using provider personnel for those activities where technical expertise is really essential) but now also in both public and third sectors. This co-production both allows the assets and resources of service users to be harnessed and also allows service users to ‘personalise’ the service in a way which is more meaningful than ‘personalisation’ devised by service providers. The implications of this second global change have still not been fully appreciated in UK public services. It may well turn out to be even more radically challenging than the renegotiation of governance relationships.

And the prospects for these renegotiations? Research continually indicates a substantial latent willingness of citizens to become more involved in the decisions which influence their lives. However, this is only evident where citizens feel they can play a worthwhile role. It is this latter condition which the public sector has, up to now, largely failed to deliver. The public-sector-centred approach to participation has run its course – and we should not underestimate its achievements. However, successful neighbourhood-based working in the future is likely to require a much wider and deeper co-production approach, which responds directly to citizens’ agendas, not simply to public agencies’ agendas.

Such a citizen-centred approach will, of course, need experimentation. Indeed, it may need radical experimentation - since neither the current self-organising approaches in civil society nor the current approaches to co-production with the public sector are well understood as yet, none of the public sector’s current recipes for involving users and communities can be regarded as ‘reliable’.
Experimentation necessarily means that some failures will occur. This means that there will be a need to design resilient systems, develop ‘last resort’ intervention plans, and allow slack resources to respond to emergency needs where the failures are serious. In the private sector, as basic design principle for innovation would hold here – ‘fail early, fail fast, fail cheap’. This is clearly harder to implement in the public sector. However, rather than running away from the prospect of failure (which is occurring to some extent in all of our public services already, although often not visible to the public), we have to be positive – creative experimentation is also likely to turn up many unexpectedly successful approaches which can be rolled out quickly.

To experiment with a much more citizen-centric approach at neighbourhood level, the public sector must be ready for the scary world of ‘trusting’ – trusting users, citizens, partners, voters. Part of this trusting will involved surfacing much more clearly than in the past the likely outcomes of public interventions and the likely risks of outcomes not being achieved. And a further major area of trust will need to be in accepting that the contributions of service users and other citizens at neighbourhood level may well turn out to be ingenious and cost-effective in terms of the overall societal cost-benefit results. Trust between the public and the public sector has been in short supply in recent decades – on both sides. It will have to be earned – by both sides. However, there is little point in waiting for it to emerge of its own accord – the public sector needs to start the process of change and to convince the sceptics in neighbourhoods that it really means to negotiate a new settlement in the use of public resources.

Finally, all radical change costs resources – ‘neighbourhood’ and ‘community’ interventions, even when based on ‘co-production’ and ‘community assets’, are not ‘free’. But they also mobilise new resources. It is time to explore how we might rebalance community and state inputs in order to enhance the outcomes which are jointly produced.

[Based on a presentation to the ESRC/AHRC DCLG Workshop on Neighbourhood and Community Involvement in Public Services on 13 December 2011 in London]

Saturday, 10 December 2011

Has the new 'EU minus one' outlawed leftist governments for ever?

Has the new 'EU minus one' outlawed leftist governments for ever by its banning of public sector fiscal deficits? Are the Centre-Right parties that dominate the current EU using these new intergovernmental agreements to ensure that Keynesian solutions to economic problems are now impossible? These are the views of Owen Jones in his New Statesman blog of 9 December (

However, Owen Jones' arguments are way off-beam. The new 'EU minus one' deal does NOT outlaw expansionary fiscal policy, as long as it's investment- led, not based on a structural deficit.

Moreover, there's nothing leftist (or indeed Keynesian) about a 'structural deficit' - subsidising current voters at the expense of future generations is just as irresponsible as refusing to invest on their behalf, which is the Osborne agenda. An investment-led budget which is green and equality-enhancing does NOT contribute to a structural deficit, indeed it REDUCES the risk of future structural deficits.

Owen Jones also misses the point that a balanced budget can represent expansionary fiscal policy, if it is at a higher level of tax and spend, which is what EVERY country in the EU (including Germany) now desperately needs.

The fundamental socialist agenda is about fairness and equity. A fairer tax and spend regime will be no more difficult under the 'EU minus one' intergovernmental treaties than it was before. Interestingly, one of the comments on Owen Jones' post is by Jon Burke, who argues that the new 'EU minus one' agreements will be good for genuinely leftist governments in the EU, since they will have to make the case explicitly for a more progressive tax and spend system, rather than simply using deficit financing to bottle out of taxing the rich at appropriate levels (and making sure they pay up, rather than evading and avoiding tax). This is a valid argument but underplays the importance of investment-led expansionary fiscal policy.

A genuinely equitable and sustainable growth agenda, based on investment for the future, is what we should be fighting to convince European voters to accept. This will be a tough argument to win. However, it will be a lot easier - and a great deal more important - than trying to interest voters in the arcane details of which international forces ('the markets', 'the credit rating agencies', 'Brussels', 'the IMF') are most responsible for making it 'essential' that our governments impose savage cuts which are socially unjust, speed up irreversible climate change and undermine our economic future.