Are you being served?

George Osborne could be excused for exuding an air of “told-you-so” right now.  After years of criticism by Ed Balls and others over the perceived tunnel vision of his Plan A for austerity, then accusations by the IMF earlier this year that he was “playing with fire”, the news of a continued UK recovery and upgrading of the IMF’s forecasts for growth is seen by many as a massive vote of confidence in his policies.  The strength of the services sector is particularly positive, now back to its pre-recession levels and the driver for so much potential employment.

But for all the headlines this story is getting, it is arguably the results of the recent ICM poll on public services that will give the UK Government cause for more cheer.  In short, it reports that 60% of us view services quality as having increased despite swingeing cuts in funding.  Key areas of success include recycling, refuse collection, parks and leisure facilities – all of which play well with the key “middle England” voters.  All sides are, of course, claiming the moral victory, with councils arguing that it shows how well they have done with such meagre resources, while central government figures – including the Prime Minister – say it shows how austerity is about improving value for money and not just doing less.

Those familiar with public sector outsourcing will have spotted that the services people are raving about are all those in which the private sector now plays a huge role in front line delivery.  The combination of operational scale, sector expertise and a healthy level of profit incentive has allowed local councils to continuously innovate services that voters want but private companies are best placed to deliver.  The ICM poll supports this further, revealing that amongst service users themselves the perceived improvements in quality are all the greater.

All this is cause for celebration at the Treasury, surely?  Maybe not.  Because the areas in which the public and service users report things actually getting worse include hospitals, care for the elderly and policing.  Expressed another way, Government has delivered in spades on the “nice to haves” while the “must haves” continue to decline.  Health, social care and policing are also amongst the most expensive and organisationally complex areas of government, which for years have resisted vehemently attempts to introduce wide ranging private sector involvement.

Livingstone has for many years advised successful outsourced service businesses, whether raising capital to fund new growth or finding the right strategic home in which they can flourish.  Their track record of innovation, cost efficiency and improvement in quality stands the test of time.  If the Government is to make any meaningful dent in the structural deficit and deliver world-class public services at the same time, there must be no more slavish ideology about how services are delivered and by whom.”

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