Why ‘local by default’ must replace ‘diseconomies of scale’

At a time of austerity cuts, mounting demand, and rising expectations, the challenges to public services have never been greater. How we respond to these challenges will affect the lives of millions of people, and play a significant role in resolving the country’s financial problems.

In recent years the prevailing view, in the Treasury and elsewhere, has been that public service efficiency can be driven by a combination of scale and standardisation.

That this strategy has experienced setbacks is not in dispute. Names such as Serco and A4E spring quickly to mind. But the government response has been to try to make the strategy work better, by enhancing the skills of government procurement teams, or improving supply chain management by prime contractors.

Meanwhile the underlying assumption, that the difficulties facing public services will be met through scale and standardisation, is not being challenged.

Locality’s and Vanguard’s ‘diseconomies of scale’ report, launched this week, presents a counter view. We argue that scale and standardisation are the problem, not the solution.

As the report sets out, far too many public service systems ‘assess rather than understand; transact rather than build relationships; refer on rather than take responsibility; prescribe packages of activity rather than take the time to understand what improves a life.’

The result is that the problems people face are not resolved, that public services  generate ever more ‘failure demand’, that resources are diverted to unproductive ends, and that costs are driven ever upwards.

We all know there are countless examples of dedicated and skilled public servants (regardless of whether they are employed in the state, voluntary or private sectors). But the best public servants find themselves working against the grain, going against the system in order to do the right thing.

It is not public service which is at fault here. It is a system dominated by scale and standardisation. That is what needs to change.

In this report we have drawn on the private and public sector expertise and insight of Professor John Seddon and his team at Vanguard, as well as the on-the-ground experience of Locality’s members and partners in communities across the country.

Our report sets out an alternative strategy. We propose that public services should be ‘local by default’, that they should help people help themselves, that they should focus on underlying purpose rather than outcome, that they should manage value not cost.

This, we believe, provides the best way to reduce demand, not amplify it, and to prevent problems arising in the first place, rather than accumulating costs which could and should be avoided.

Please read the report and post a comment.