Review

A solution in search of a problem

Public Interest: New Models for Delivering Public Services?
Jane Steele, Mary Tetlow and Alison Graham
Calouste Gulbenkian Foundation, 2003. £5.00

After nearly 40 years working for the NHS and local government I am persuaded that something needs to be done about public service delivery. As directly provided on the traditional model, it is manifestly inefficient, uncreative, provider-focused, resistant to change and, perhaps worst of all, remarkably averse to partnership working. Change is long overdue. But what sort of change?

The Public Management Foundation hypothesises that what is needed is a new form of organisation combining what they see as the strengths of traditional private and voluntary sector service providers but without their weaknesses. They have christened this new form a ‘public interest organisation’, distinct from but interestingly similar to the ‘community interest organisation’ recently suggested for the charity sector by the Cabinet Office strategy unit.

To explore this proposition the foundation has looked at the limited evidence available on the relationship between organisational form and service effectiveness by examining provision in three areas: support services to schools; social housing; and residential care for the elderly.

Disappointingly, this turns out not to be a very fruitful excursion. Support services for schools are new, undeveloped and teach us little. The residential care sector is long established and dominated by the traditional private sector model, which is clearly failing in large measure because of profiteering. The social housing sector is more interesting, with its preponderance of the community interest mutual model. But its clearly identified and relatively stable client group – tenants – makes it atypical of public interest services generally and thus difficult to generalise from.

The Public Management Foundation sees the lack of practical examples of different forms of organisation, leading to a reliance on theorising rather than practical experience, as the main obstacle to reaching a conclusion. To remedy this it proposes an experimental programme involving small local enterprises as well as large-scale institutions. Railtrack is already in the frame, as would be foundation hospitals in due course.

For me the Public Management Foundation’s public interest organisation is a solution in search of a problem. Experience of the corporate charity model has convinced me of its effectiveness and sustainability as a public service provider. And the public interest mutual model remains a goldmine whose riches have scarcely been tapped pace foundation hospitals.

What is also clear is that the profiteering limited liability company has no place in public service delivery, and that the public’s user interest is better represented through conventional democratic processes than, as in the case of foundation hospitals, by perverting the mutual model.