Week in Public Services: 6th December 2023
This week: belated autumn statement analysis; crumbling new schools; Nottingham issues a s114
General
It may seem like a while ago now, but the big news since our last edition was the autumn statement. If you’re still baffled by the Chancellor’s 110 growth measures or how fiscal drag affected the public finances, the IfG as has you covered, with the six main lessons here. On public services, the government promised and then delivered very little.
The headline story is that the government dived down the back of the Treasury’s sofa and pulled out £19bn worth of tax cuts. The problem is that those cuts came at the expense of investment in public services, whose settlements have decline in real terms. The politics of this are obvious: with an election looming (potentially as early as next spring) the government wants people to feel like things are improving. Cutting taxes and hoping people notice the bump in their pay packets is a better political gamble than investing in services which are unlikely to meaningfully improve before the next election. By the way, this tendency — to giveaway any fiscal upside from better forecasts — is a common one for chancellors, as the IFS points out. On the flip side, they regularly borrow when there’s bad economic news, creating a ratchet effect on public borrowing. So much for long term thinking from Sunak then.
One area that could have been interesting for public services was productivity. The chancellor used the autumn statement to set a target for 0.5% annual increases in productivity. The statement then made a reasonably good fist of diagnosing drags on productivity: too much frontline time spent on admin, a lack of technology, a disproportionate focus on acute services. But then the solutions were useless: some ‘AI’ (a laughable concept when many services don’t even have computers that turn on), capping civil service headcount, and launching a few prevention pilots. Nowhere did it mention the cuts to administrative and management staff since 2010. Or consistent underinvestment in capital across all public services. Or a lack of effective technology that hinders communication across services. Maybe less well publicised is the real danger in a blunt productivity target. One way of “improving” productivity is to hold down inputs (e.g. freezing staff pay, firing staff, reducing capital investment). Indeed, that’s exactly what happened in the 2010s. The problem is that stores up productivity issues which we’re seeing now. For more on that, we wrote a paper last year looking at the lessons from the 2010s austerity period.
And if you’re left with the feeling that we’re constantly bombarded by budgets, statements, spending reviews, and other assorted fiscal events, you’re not alone. Jill Rutter made the case for the Institute that we should only be subjected to one fiscal event a year. This is a view I can certainly get behind, and not just because it means fewer weeks frantically trying to work out what spending numbers mean for services.
The second big development in late November was the annual release of net migration figures. The headline reveal is that 2022 was a record year with 745,000 net arrivals. Arguably more striking was that the Home Office issued nearly 144,000 visas to health and care workers in the 12 months to September. In response, James Cleverly announced a raft of measures to reduce the headline number. That included raising the salary threshold for overseas work from £26,200 to £38,700, preventing overseas workers from bring ‘dependents’ (also known as family members), and abolishing the 20% discount on the salary threshold for shortage occupations. NHS Providers pushed back on these proposals and no wonder: health and social care workforces have relied heavily on international recruitment since mid-2021, as we argued in Performance Tracker. Even with that source of recruitment, there are still 121,000 vacancies in the NHS and 152,000 in the adult social care sector. There’s valid criticism of the NHS and social care’s reliance on overseas workers — the salary threshold is lower at just under £21,000 and there are credible reports of exploitation — and it’s not yet clear exactly how Cleverly’s measures will impact recruitment. But without a plan for how to replace international workers it is likely that service performance will be hit.
Finally, Jonathan Slater — ex-permanent secretary of the Department for Education (DfE) — has some radical suggestions for policy makers in Whitehall: go out and talk to service users, make policy advice public from the outset, and encourage specialisation in a department.
Health and Care
The public accounts committee (PAC) released a scathing report about the government’s new hospital programme (NHP). The headline — “it is now clear that NHP will not deliver all 40 new hospitals by 2030” — isn’t a shock to anyone that’s been paying attention. Something that jumped out to me though was PAC’s critique of the government’s “hospital 2.0” — which is the standard hospital design that the government is using for the NHP. I hadn’t realised this, but the assumptions underpinning those hospitals are wild: 95% bed occupancy; substantial reductions in length of stay; and a rapid and continued shift of patients into community settings. The first of those should not be desirable in a hospitals. The second should, but the UK is already below the OECD average, making you wonder how the NHS will achieve that. And the third has been promised forever, with very little progress. Worrying for the effectiveness of these proposed hospitals.
The HSJ reports that Greater Manchester integrated care system (ICS) has hired more staff than the national average since 2019 (17% increase in the ICS compared to 14% nationally) and that 4,100 of the 13,300 increase in FTEs is not “readily explainable”. It’s difficult to imagine how an ICS can accidentally hire that many extra staff, but may go some way to explaining their mid-year deficit of £186m. One to watch.
This blog from Paul Corrigan is an illuminating insight into the reams of admin that the DHSC and NHSE require ICBs to wade through. The picture he paints is a bleak one: relatively innovative ICBs hobbled in their ability to deliver on their genuinely exciting plans for integration by enormous reporting and compliance burdens from the DHSC and NHSE. That reduces the heads of ICBs from system leaders to NHS middle management. It’s hard not to wonder what effect having two masters — the department and NHSE — has on this admin burden on ICBs. Difficult counterfactual to prove, but it surely can’t help. One thing I wonder with this is if it’s always been this bad, or if this is a relatively recent development. If it is recent, could it be because both the DHSC and NHSE have got a lot bigger since the start of the pandemic? All those people put could have put extra reporting burdens on ICS staff.
On a similar note to Paul’s blog, this NHS Confederation report looks at how ICSs can implement the NHS’s ambitions for “continuous improvement”. The authors argue that ICSs have the potential to act as real drivers of performance improvement, focusing on the needs of their local areas. But (confirming Paul’s view) ICSs are pulled in too many directions and are often too under-resourced to effectively fulfil this role. ICSs face extreme pressure to respond to operational pressures in acute trusts while also responding to the tight management control that DHSC and NHSE exert over them.
This thread on being a manager in an acute NHS trust has really got me thinking. A couple of things that struck me. First, the reporting and compliance burdens on managers seems extreme (and supports Paul’s point above). Having such a wide range of competing priorities means there are actually no priorities. Second, Sonia describes having to do the work of multiple functions: finance, HR, administration, operations and strategy, among others. What is going on? How is any one manager supposed to do all those things well? Each of those requires a different skillset and experience. I loved this thread. If anyone wants to talk more to me about their experiences as a manager in the NHS, please get in touch.
I found this piece from Mark Dayan at Nuffield Trust incredibly insightful. He argues that the relationship between HMT and the single largest public service are becoming increasingly strained, as the NHS consistently fails to deliver savings, performance improvements, and financial control before then coming to the Treasury to top up its funding. That makes HMT increasingly wary of actually providing more support. That then leads to politicians brokering deals for one-off funding pots in an emergency, which we’ve argued in the past are poorly spent and lead to little improvement. When that money also doesn’t deliver the expected results, the cycle repeats. A really great read that gets to the heart of many issues.
ADASS published their annual autumn survey. The major takeaway for me is that authorities are still struggling to work through the backlog in assessments. Six month waits have increased at each of the ADASS’s last few surveys, but the number of people waiting for assessment overall also rose again in this survey, after falling since April 2022. Not good.
Children and Young People
Another service, another heavily critical PAC report, this time into RAAC in schools. The report labels the DfE’s handling as “unclear”, “uncertain” and “lacking in transparency”, not terms which anyone wants to hear in relation to the management of the schools estate. Particularly concerning is that the DfE not only lacks incomplete information on which schools contain RAAC, but also has no clue how many schools contain asbestos. This will hardly reassure parents, pupils, and staff at affected schools, but to compound the issues, PAC also reports that the School Rebuilding Programme has fallen behind schedule. That means that 700,000 pupils face the prospect of learning in sub-standard buildings with no clear timescale for improvements.
It’s not just older school buildings whose deteriorating conditions are disrupting education. Anoosh Chakelian’s written an excellent, and shocking, piece in the New Statesman about the appalling state of some newly-built schools. Despite being open for just two years, at least five schools in Essex, Cornwall and Northampton have been or will be knocked down due to cracks in walls, flooding and other serious structural issues. According to Chakelian, the source of the problem lies with the DfE. The department launched a £3 billion school building programme in 2020, but awarded a contract to a company which uses “off-site construction”, a cheaper, quicker building method. That company subsequently collapsed, leaving school buildings and safety certificates incomplete. The consequences for the 5,000 affected pupils are grim: either lessons in marquees and using so-called “Glastonbury-style” toilets (but with none of the festival vibe); or a return to online lessons.
Really enjoyed this LSE blog from Aveek Bhattacharya about the effects of school choice. He looks at differing outcomes in England (which pushed school choice) and Scotland (which did not). You might expect that using catchment areas would increase segregation of better and worse off pupils, but he finds that the opposite is true. True, there is more neighbourhood segregation in Scotland — where middle class parents buy up property near good schools — but more segregation within schools in England as middle class parents are better able to navigate the school choice system and get their children into better schools.
Law and Order
Complaints proceedings against the Met Police tend to generate the most media attention, but PoliticsHome’s analysis of data from the Independent Office of Police Conduct (IOPC) reveals that it is not the force with the highest complaints rate in England and Wales. That dubious honour goes to Cleveland Police, which has an astonishing rate of 1,232 complaints allegations per 1,000 officers; more than double the national average of 547. Cleveland Police claims that its high rate reflects public confidence with its complaints process and that they record complaints differently to other forces. These points are plausible: it’s possible that the complaint rate reflects efforts to improve behavioural standards, which could lead to a temporary spike. This is not to downplay any internal problems, but it’s true that the complaints rate alone doesn’t prove that Cleveland Police is performing worse than other force in the country.
The inadequacies of the UK’s ageing prisons are well established, but it’s still shocking to learn from this article by Helen Pidd that nearly 7,000 prison cells across England and Wales lack toilets. While low-security prisons have communal facilities for inmates without in-cell toilets (which remains an indictment of poor conditions), around 1,485 inmates in higher-security prisons can’t take advantage of those facilities. They instead go through the “controlled unlock” system; in other words ringing a bell to ask a prison officer to electronically unlock the cell door. Inmates are sometimes left waiting for hours, resorting to buckets passed into cells by staff (even though “slopping out” is formally disallowed).
The BBC reports that HMP Bedford has received an urgent notification for improvement from inspectors, requiring a government response within 28 days, so poor are the conditions for both inmates and staff. The inspection report is damning: mould- and rat-infested cells, the highest rates of violence in England, self-harm levels 84% higher than the previous inspection, staff abusing and being abused by prisoners. HMP Bedford (which, for history enthusiasts, opened in 1801) is the fifth prison this year that the Chief Inspector of Prisons has issued an urgent notice about.
HM Inspectorate of Prisons this week released their annual survey of children in young offender institutions (YOIs), revealing a worrying fall in children’s perception that staff were looking after them well. Despite good staff-child relationships being crucial for behaviour management and the support needed to prepare for life upon release, just 46% of children reported feeling cared for. Also, staffing shortages mean that the majority spend just two hours out of their cells on weekdays, hardly conducive for education and other meaningful activities which provide the basis for life outside the criminal justice system. In a further indictment of YOIs, Chief Inspector Charlie Taylor has said that levels of violence are higher than in adult prisons and are “storing up real problems for the future”.
Local Government
Obviously the big news in local government is that Nottingham City Council issued a section 114 notice last week. That makes it the third local authority to do so this year (alongside Woking and Birmingham) and is the twelfth section 114 since 2018. What should worry the government is how unremarkable Nottingham is: there was no speculative investment that went wrong, no equal pay claim, no wanton mismanagement. Instead, Nottingham just buckled under the pressure of rising demand, squeezed budgets, and inflationary pressures. This crisis in local government finances looks unlikely to resolve itself. A survey conducted by the LGA shows that 20% of LAs think it is either “very” or “fairly likely” that they will have to issue a notice this year or next. That would be somewhere in the region of 60 LAs.
This report by the County Councils Network (CCN) on transport budgets for SEND children is yet another illustration of the increasing costs councils face in delivering local services. England’s 37 county and rural authorities collectively expect to spend £720 million on funding transport for eligible children this year, and this is expected to top £1 billion by 2027/28. Much of this is down to how demand for special schools has outstripped the supply of places, leading to children being placed in schools further away from their homes.
London boroughs have spent £300 million on purchasing properties to accommodate homeless people since 2017, according to a FOI request by Bloomberg News. Crucially, these properties are located outside the boroughs, reflecting the decreasing affordability of the rental sector in the capital. With both house prices and homelessness rates amongst the highest in England, London boroughs face a particular challenge in fulfilling their obligation to ensure accommodation for those at risk of imminent homelessness.
