Mark Thompson, Senior Lecturer in Information Systems at the Cambridge Judge Business School, discusses his case for reassessing value in our public services and creating a new digital public infrastructure for the twenty-first century – as proposed in the Manifesto for Better Public Services.
In our Digital Business classes at Cambridge Judge Business School, an important – even defining – discussion is how mature internet-based technologies are disrupting traditional notions of what constitutes ‘valuable’ activity in organisations. We look at a number of ways in which this is occurring: for example, organisations increasingly need to generate value within ‘value chains’ of partners rather than all by themselves (think Amazon); they often give things away to generate value in other ways (think Google, or Facebook); they often generate value simply by brokering supply and demand (think Uber, or Rightmove) – and all are obsessed with collecting data as the ultimate source of value in the digital economy – hence Clive Humby’s dictum that ‘data is the new oil’.
The ‘disruptive’ aspect to all this lies in the fact that many of the activities undertaken in traditionally organised businesses are increasingly of questionable value, because instead of ‘doing everything themselves’, value is now very often generated in new ways via collaboration. In her new book The Value of Everything, Marianna Mazzucato rightly points out how the state can play an important part in generating value in the digital economy, and that we increasingly need to look at those who generate value versus those who rent-seek by brokering value generated by others.
So what does all of this mean for the future of our public services? I think it’s fair to say that thus far, public organisations appear to have struggled to agree how to assess social value, as illustrated by the five case studies on GOV.UK intended by government to illustrate the Public Value Act of 2012. The first – North Bank Forum and Hull – concludes that “there is no common definition among public sector organisations of what social value means and no consensus over how this question is best evidenced as part of the tender process.” Another, Prince’s Trust, measured social value in terms of freebies Salford Council had secured from a supplier of bus services that included “helping to deliver a garden project to a local vicarage” and “repairing pot holes for a local sports club.” Aintree University, has a “social value strategy” that sits alongside existing business as usual, which suggests asking tenderers to think of ways they might contribute to social value if the university cannot think of any itself.
In response to this apparent need for more imaginative thinking about how the internet reframes social value, in March, a group of us launched a Manifesto for Better Public Services at London’s Institute for Government, where we tried to develop some of the implications of this thinking for our public services at an increasingly challenging time. We include some startling figures about the full extent of this challenge in our document. Our councils have started going bankrupt; our social services are at breaking point; our prosecution, probation, and prison services are creaking; our NHS lacks doctors and nurses; our schools lack teachers; police are an increasing rarity on our streets, and homelessness is on the rise. We’re also living longer: our ageing population may consume half of government revenues by 2061 – and we expect to consume more – but have less to fund it with. And with UK debt at 90% of GDP, we’re the worst-performing advanced economy in the world. Over 7% – 4.6m people – are in persistent poverty; and this is all before Brexit.
In response, we believe we speak for many who would like to challenge the current political orthodoxy that the only two options on the table are higher taxes – or more cuts. There is a third option: reform of the system itself, yet we believe we do not yet have a public mandate for a national conversation about what such reform implies. Drawing from our observations about how successful internet-based organisations do well because of a resolute, and rigorous, willingness to rethink how they generate value for customers, we apply the same focus on value to our public services.
Take local government for example, where the numbers cited in our Green Paper are staggering. English local government has 353 councils, each surrounded by health, social care, housing, blue light, and third sectors, each with their own infrastructure, suppliers, and institutional processes – delivering almost the same services under the same policies and legislation. We believe these have no reason to be different from one another in the way they operate. All have been cutting funding to services such as teachers, social workers, day care centres and libraries (local authority budgets across Britain were cut by £18bn in real terms between 2010-15).
Instead, a modern internet-enabled way of organising local government would resemble ‘Heart FM’: locally-configured regional services, underpinned by standard ‘playlists’ of common processes and functions consumed over the internet for very little cost. Our Green Paper conservatively estimates doing this could save £5.2bn every year – or the potential to free up an additional £14.7m for each of the 353 councils. Applying the same model to our 650 duplicated NHS Trusts, we conservatively estimate annual savings of £7bn every year: that’s the equivalent of 191,985 junior doctors. Indeed, taking our public services as a whole, we conservatively estimate that in time we could redirect £46bn year-on-year into face-to-face public services.
At the heart of our proposals is a new digital public infrastructure fit for the twenty-first century. We envisage a new “digital commons” of standard, ‘Lego-brick’ processes and functions that would enable much more effective sharing, distribution and ownership of information, services and technology across the public sector. By helping expose and remove large-scale duplication of costs, processes, functions and systems across the public sector, this digital commons would redirect resources to frontline services, into the people-centred activities that matter most to citizens and which cannot – and should not – be automated.
Such a radical re-organisation would also re-empower public servants themselves. Imagine you’re a charity worker who wants to set up a pop-up service in your local library. You simply go onto GOV.UK, and create your own state-of-the-art back-office organisational function there and then from this shared digital commons of standard ‘Lego brick’ components: a bit of workflow, some case handling, registration, data storage, maybe some analytics – consumed straight out of the cloud, like Netflix movies, and constituted around the citizen as a joined-up service.
‘Lego government’ would also empower democracy. As a citizen, journalist, or MP I could also log onto GOV.UK – and browse a ‘live DNA’ of the services provided by my council, or NHS Trust – and see what they cost – whether they’re composed of standard ‘Lego bricks’ or wasting precious resources – and I can suggest how to design them better.
So how would we achieve such an open, democratically accountable, and citizen-centred public service model? We call for political engagement, ownership, and, yes – bravery – to commit to a radical infrastructural reinvigoration based on the application of modern, internet-enabled organisational designs and practices, and offer some initial steps we can all take to start down this difficult road. With public services currently at breaking point, we believe that current implications that these can be fixed and made sustainable for future generations via taxation alone are disingenuous, and that in addition we require more collective imagination. This is not an issue to be kicked into political touch for our children to sort out.
The views and opinions expressed in this post are those of the author(s) and not necessarily those of the Bennett Institute for Public Policy.