Choice & competition

As an ‘architect’ of public sector reform in Great Britain, Julian Le Grand has seen the process develop from the top as an advisor to Tony Blair. He tells Peter Cheney why the ‘choice and competition’ is the best model for public services and shares his views on local education policy.

For two years between 2003 and 2005, Professor Julian Le Grand was seconded from the London School of Economics (LSE) to be a senior policy advisor at 10 Downing Street. That time was, he says, the “most extraordinary two years of my life in many ways”, during which he found 10 Downing Street “very informal” and a “fun place to work”.

Speaking to agendaNi, he explains that out of the four basic models for delivering public services, ‘choice and competition’ is the “least worst” option in most situations. He describes the three alternatives as trust, mistrust and voice.

Trust

In a trust-based system, professionals are entrusted with service with little interference from the state: “You hand the money to the doctors, the teachers, the public servants, and you say you trust them – ‘let them get on with it’.” The professionals naturally like this situation but the model assumes that professionals will be public-spirited and not sel finterested.

Le Grand has found that the trust model did not work in public services and resulted in problems such as two-year waiting lists for simple operations and mistrust between parents and schools.

Mistrust

The opposite is true with the mistrust model when, as Le Grand puts it, “you actually order things from government, you have command and control, the government basically tells people what to do, sets targets, monitors performance, fires people if they don’t make the target”. In healthcare, this approach did work in the short term by reducing waiting lists and Le Grand says that it probably contributed to raised literacy and numeracy levels in education. However, it is not an ideal permanent solution.

“I think most people in government felt it works in the short term, but not really in the long term. It demoralises people, it de-motivates people.” Professionals who were previously used to autonomy were subjected to a “barrage of instructions” from the state.

Voice

A third option, called voice, relies on people expressing dissatisfaction with the public service to those responsible for the service. For example, a parent may go to see the teacher or head-teacher if they think they are getting a bad deal from their local school. The parent may also talk to a councillor or MP, or become a school governor. Whichever method is used, “the instrument is the voice”.

Le Grand notes that voice has its place but it is “quite difficult to mobilise” and favours those who decide to complain: “Suppose you want to complain about a hospital, you have to have a certain amount of confidence to do that. On the whole, voice tended to favour the better off.”

Choice

In contrast, choice and competition involves a decision to leave the service and seek a better one. “Choice and competition,” he remarks, “is when if you’re dissatisfied with the service, you don’t necessarily go and talk to the people concerned, you simply leave it. If you don’t like the school, you take your child out of the school and put it in another school. In healthcare, if you’re referred to hospital and don’t think it’s very good, you got to a different hospital. Or if you don’t like your GP, go to a different GP.”

Choice and competition gives the service incentives to improve. If a school loses pupils, it will also lose funding and therefore would, logically, need to work out how to raise its performance.

All public services have some elements of all these models. However, different parts of the UK are favouring different models. England, for example, is moving towards choice and competition in healthcare and education, having found that the others “haven’t really worked”. Scotland and Wales, instead, are moving towards voice instead, while Northern Ireland is “on the cusp” and deciding which way to go.

“There’s got to be the possibility of choice. In Northern Ireland, one of the problems I would imagine in health services is having enough hospitals to choose from for certain specialist services might be quite difficult. You’ve got a relatively small population.” However, he thinks that the province should be able to offer more choice in education than in healthcare, with its large number of schools.

Some of best evidence for choice and competition in health is found in the United States where competition between hospitals has been “quite successful in lowering costs and raising quality”. In Sweden’s education system, the model has also been good for raising standards in schools, regardless of their previous performance.

Two issues on which Le Grand holds strong opinions are especially relevant to Northern Ireland: faith schools and academic selection. And on both, he is a sceptic.

“One of the problems with choice is that it will only really work to drive up quality if parents choose schools on the basis of the quality of the school. If they choose schools according to some other criterion – for example according to their religious faith – then it’s not going to have the same kind of incentive impact,” he says. Le Grand thinks that some faith schools can be quite divisive and thinks that, at best, they “did not contribute towards greater community cohesion” in the province.

Also, where a school can choose who comes to the school, he says there is a danger of “cream-skimming by which schools simply choose the people who are best going to improve their exam results.” This tends to discriminate against poorer and disadvantaged children, and he would prefer that parents made the choice rather than the school itself.

Easy to criticise

A greater respect for politicians was one of the ‘lessons’ learned by Le Grand when he made the move from academia to advising government.

“They [politicians] are normally portrayed in popular discourse as being almost corrupt, short-termist. That certainly wasn’t my feeling. I was actually surprised how long-term a lot of them thought,” he remarked. His general impression of Cabinet Ministers was that they were “intelligent, sharp, on the point” and the consequences at election time did not dominate their thinking as much as he thought it would have.

“I suddenly became aware of just how easy it is to criticise things. No policy is perfect. Everything has flaws. And it’s very easy just to come up with a list of those flaws. And people like myself and my colleagues in academia could always be trusted to go on the Today programme and find some problem with a particular government policy,” he continues.

“What rarely happened was that the academic was then asked: ‘Well, what would you do?’ That’s the difficult question. It’s quite easy to come up with a list of problems. It’s not easy to come up with the solutions.

“I felt that my colleagues, and indeed myself in a previous guise, had found it rather too easy to find the problems but not to have to pay quite enough attention to finding the solutions, which in government you have to find. You can’t wave your hands and say: ‘That’s somebody else’s problem.’”

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