Week in Public Services: 17th November 2023
This week: reshuffle reflections; NHS productivity ponderings; and local government audit inaction
General
Suell-axed? Victoria Atk-in-s at DHSC? The major surprise of the week is not the poor quality of my puns, but rather that David Cameron is back in government, shiny new peerage in hand. Of course, the IfG has all the reshuffle content you could ever want: a live blog, a podcast, an explainer, and more. Truly an embarrassment of reshuffle riches.
In terms of public services, the two biggest moves were Cleverly in at the Home Office — taking over from a predecessor who spent the previous week undermining the operational integrity of the Met — and Victoria Atkins taking over the DHSC. Here’s my contribution to the live blog on what Atkins can expect in the health and social care brief. Not to be too much of a killjoy during Westminster’s version of Christmas, but the decision to move Braverman and Barclay means that the Home Office will be on its fourth home secretary and the DHSC on its fifth health and social care secretary since mid-2021. We argued in Performance Tracker that high ministerial turnover and consequent policy churn harmed service performance, with the prime example being the winter crisis in hospitals last year. Arguably the best thing that Atkins could do — at least in the short-term — is absolutely nothing. Don’t cancel in-progress improvement programmes. Don’t make any massive policy announcements. Certainly don’t attempt any kind of top-down reorganisation of the NHS. Provide as much support to service providers this winter, and then maybe start to think about shiny policy announcements next spring.
The reshuffle had the IfG’s ministers team working flat out this week, and it’ll be the turn of the public finances team next week with the autumn statement due on Wednesday. Gemma Tetlow and Tom Pope have a blog on what you should look out for. From a public services perspective, we’re expecting a relatively quiet fiscal event. There haven’t been any whisperings of major funding uplifts along the lines of last year’s autumn statement. The main things to look out for will be an updated GDP deflator (I know, really exciting stuff) and a heavily-trailed announcement about public service productivity. Make sure you tune into our event on Thursday breaking down what the autumn statement means for the public finances.
Right, let’s get into some policy content. There have been recent two reports on public service reform, both of which discuss prevention. The first — from Demos and the Health Foundation — focuses tightly on the mechanisms for increasing spending on prevention. Their solution is a third spending category (alongside resource DEL and capital DEL) that would be known as ‘prevention DEL’, or PDEL. The authors argue it would increase accountability, signal the importance of preventative spending, set a baseline for spending, and improve long-term decision making. All these things are possible, but Steve Black points out some issues in the HSJ. Steve questions why creating PDEL would help protect increase spending on prevention when it didn’t with capital spending after the creation of CDEL? I think that is right, though pessimistic. Cutting CDEL does come with a political cost, even if it is a relatively small one. It also allows people like us to make a fuss about it.
The next report is from IPPR. Their scope is a bit broader, looking at public service reform more widely. They also recommend a separate funding stream for preventative spending, though theirs is called ‘prevention investment expenditure’ (PIE. This is going to get confusing). Similarly to our NHS Productivity Puzzle paper from earlier in the year, they argue for greater autonomy for public service staff. Finally, they advocate reorganising government to better deliver on a potential Labour government’s missions.
One issue I have with PDEL/PIE (please can we pick one and stick to it) is how government would draw a neat line around preventative spending. Is all education spending preventative because it improves health outcomes and reduces demand for the criminal justice sector? Only 20%? The same goes for primary care; a large expansion in general practice capacity would arguably take a lot of pressure off acute hospitals. But what proportion of spending on general practice is therefore preventative? It’s a really hard question to answer. Anyway, we’re doing some work on prevention in public services this winter, so watch this space.
Health and Care
Anecdote though it may be, this piece that Rory Cellan-Jones wrote about his experience in the NHS illustrates a couple of points that we talk about a lot. The first is the inability of the system to talk to itself. Rory describes staff struggling to turn on computers and then navigating complicated software, with consequent confusion about how and when he would receive treatment. The second is the waste this poor communication caused. Rory had his operation scheduled, cancelled, rescheduled and cancelled again, before then being sent home untreated. As Steve Black points out (£), this episode illustrates a severe lack of coordination in the system, with resources — notably staff time and bed space — wasted while people tried to work out how to treat a single patient.
This piece in Pulse, written by an anonymous GP locum, claims that GP partners are choosing to replace relatively expensive salaried GPs and locums with cheaper physician associates, advanced nurse practitioners, advanced clinical practitioners, and others. On the face of it, this sounds plausible, especially given increasing costs of running a practice. The problem is that the number of salaried GPs is increasing, surpassing 10,000 (on an FTE basis) for the first time on record in September this year. The real problem is declining numbers of GP partners.
The GMC released their annual workforce report this week. They lead with the argument that the NHS will have to continue recruiting significant numbers of internationally trained doctors to meet the long term workforce plan commitments. Delving a bit deeper, there’s some interesting data on diversity in the medical workforce. I was struck by how rapidly the gender balance in the medical is improving: 49% of the workforce were female in 2022, up from 43% in 2012. More astoundingly, 62% of the 2022/23 medical student intake was female. The story is less good when looking in more details at gender disparity by specialty; it looks like less than 20% of surgeons are female. It brought to mind the Times story (£) from earlier in the year about the proliferation of misogyny and sexual assault among surgeons. This gender imbalance surely explains some of that culture.
For data nerds, I forgot to mention that the government published the annual Adult Social Care Activity and Finance Report (ASCAFR) for 2022/23.
NHS productivity is back in the news, with reports (£) that the NHS has hired McKinsey to solve its productivity problems. If only someone had written an extensive report on the topic, at absolutely zero cost to the NHS. Not all agree, however, that hospitals even have a productivity problem. In evidence to the health and social care committee, Amanda Pritchard (chief exec of NHS England, no less) argued that the so-called productivity problem is a myth because hospitals are doing a lot more things that we can’t measure. It’s easy to make fun of that claim, but there is some truth to it. It is very hard to measure activity in areas like critical care and community care — partly because the NHS doesn’t publish good data on those areas — but Pritchard makes no attempt to really evidence her claim. If it’s true, show us! I might steal this line for my next performance review: Sorry boss, I haven’t performed worse this year, I’m just doing more incredibly important things that you can’t observe.
In case you think I’m being unduly harsh on the NHS, Max Warner and Ben Zaranko at the IFS published a blog assessing the most up to date evidence and came to a similar conclusion. They go further than some arguments we’ve made and say that it isn’t just that the NHS is doing less, but that the quality of activity — as measured by waiting times for care — is also declining. Another interesting point from their piece: while spending has increased in real-terms, it has increased by less when accounting for population growth and demographics.
The Guardian has an article which claims that charities which provide services such as social care are struggling financially. Representative bodies claim that local authority and NHS contracts don’t provide enough funding to cover the costs of service provision, with charities funding the difference from charitable donations. The article claims that commissioners assume that charities will deliver services “on the cheap” and that the “goodwill of charities has been taken for granted”. It’s an easy sector to ignore, but the government should be concerned if charities become financially unviable, given the wide range of services they provide. One to watch.
Children and Young People
FFT Datalab have an update on school absences in the first half of autumn term. Compared to last year, absence rates dropped for primary school pupils, but rose for secondary school. The absence rate in secondary schools is much higher than pre-pandemic (7.9% of sessions missed compared to 5.6% of autumn 2019), and is likely to worsen as absences are generally worse in the second half of half term.
Law and Order
We had the joy of King Charles giving his first king’s speech to open parliament last week. Most notable from a public services perspective was the inclusion of the sentencing bill which promises “tougher sentences for the most serious offenders”. That’s all well and good, and will garner applause from all the right papers, but as we pointed out in Performance Tracker there just isn’t space in prison to hold more prisoners. The argument for reducing short sentences is much stronger, as we argued in last week’s edition. Maybe there’ll be a huge pot of money to massively expand prison building at next week’s autumn statement, but somehow I doubt it.
Unless you’ve been living under a rock, you’ll have seen that Mark Rowley was embroiled in an (often inane) dispute with Sunak and Braverman about whether or not the police should ban the Palestine protests that took place on remembrance day. Rowley won out in the end, arguing (correctly in my view) that he would only be permitted to ban the protest under “extreme circumstances” — a threshold which this protest did not meet.
You can argue back and forth about the relative merits or not of whether the march should go ahead, but this article from Rick Muir about the constitutional impact of Braverman’s intervention is far more interesting to policy nerds. In short, Rick argues that (1) by applying pressure to Rowley, Braverman was undermining the constitutional independence that the police have from politicians. And (2) that Braverman’s accusation that the police are favouring the left effectively politicises, and therefore undermines, the police’s reputation for impartiality.
Speaking of Rowley, his impromptu meeting with Sunak and Braverman meant that he was not able to speak at the IfG last week, as planned. But fear not, our excellent events team managed to get him back in this week. Link to watch the event is here.
The home affairs committee published a report on policing priorities. Interestingly, they say that they shifted the scope of their enquiry from how the police should prioritise often competing roles, to rebuilding public trust in the wake of multiple scandals. It’s a good question, and addresses a problem we highlighted in this year’s Performance Tracker. The report makes a range of recommendations. For example, reforming the hiring and vetting process, a review to monitor uptake of recommendations from the Casey Review, and for the home secretary to review the limits of the police’s power. On the first of those — better recruitment and vetting — it feels a little like shutting the stable door after every single horse has bolted; the government just finished the largest police recruitment programme in decades, which has been shown to be rife with concerns about vetting and quality of recruits.
The public accounts committee (PAC) published a report on a topic I’m not that familiar with: resettlement support for prison leavers. They find that the resettlement service is not up to scratch (an underperforming service in the criminal justice system? Never) with poor retention of probation officers highlighted as a particular problem. Another problem is that the MoJ is looking to make savings in its reoffending reduction budget, but as PAC astutely points out “It is often easiest for departments to save money through cutting spending in “discretionary” areas, such as reducing reoffending”. They also point out that evidence-gathering for the effectiveness of spending on resettlement is still in its early stages, making it harder to argue against cutting expenditure — a theme that has cropped up repeatedly for us in our early work on prevention.
Local Government
The Guardian reports that just 1% (!!!!) of local authorities submitted their annual accounts for 2022/23 by the deadline this year. For those not up to speed with the current situation in local government financial audit (honestly, what have you been doing with your time?), the system has been quietly collapsing for a few years now. This PAC report from July and NAO report from January are nice summaries. The causes are multifaceted, but the abolition of the Audit Commission (AC) in 2015 is certainly one reason. The new system — which is a mind-spinning mish mash of ALBs, DLUHC, private audit firms and accounting bodies — just does not seem to have sufficient capacity or authority. Some of that is incentives — it is not profitable for private firms to audit local government — and some of it is lack of capacity among local government finance staff who prepare accounts.
The government is aware of this. It commissioned the Redmond review, which reported in 2020 and recommended the establishment of a new regulatory body with responsibility for “procurement, contract management, regulation, and oversight of local audit”. That new body is called the Audit, Reporting and Governance Authority (ARGA). It’s been three years since Redmond made that recommendation so I’m sure that the establishment of ARGA is fully in motion and on track, right? Right? Of course not. The Times reported in September that its establishment was delayed, and this was confirmed by its absence from the King’s Speech. My colleague Matthew Gill bemoans the general delay in establishing a range of ALBs due to a lack of parliamentary time.
I realise this all seems abstract and technical, but it really matters! As an example, I was doing some work looking at Warrington council, which has the second highest level of debt to core spending power ratio of any social care authority, behind only Thurrock (not a comparison any LA wants to draw).
Warrington used a lot of the debt it took on to invest in various businesses and commercial property, like many other LAs. This has recently attracted some negative attention, with government claiming that the council is exposed to high levels of risk. The problem is that no one really has any clue how risky Warrington’s investments are currently, as it only published its audit from 2017/18 in March this year! How on earth is anyone supposed to assess the risk of authorities’ finances if they’re at best five years out of date.
Alarm bells are ringing in Nottingham, where they have a forecast £23.3m overspend for 2023/24, on a budget of £261.8m. What would be notable in the case of Nottingham (as far as I can tell) is that there hasn’t been any egregious mismanagement in the way there has for Thurrock, Slough, Woking etc. This is just a case of intense budgetary pressure from social care (particularly children in care), the need to supply temporary accommodation, SEND budgets, and inflation. That should make the government concerned. Nottingham are not the only ones to warn that these pressures are unsustainable, a full-blown crisis in local government finance would not make for good headlines.
On the topic of s114s, Chris Naylor has an interesting article about their increasing prevalence. He points out that they were never meant to be used in the way they are now — levers of last resort for authorities that can’t balance their books. This line in particular expresses a sentiment with which I fully agree: “The power to impose spending controls and force members to meet to agree budget options only works if the overspends in question are controllable and you’ve got budget options to agree”. Quite. Chris also warns LAs not to expect central government to come riding to the rescue following a spate of s114s. That might be overly pessimistic, but I certainly don’t think councils should expect any imminent help.
