By Daniel Hunter

Public services providers must work hard to build trust in open markets to deliver better results for less. They need to make performance clearer and easier to compare, CBI chief policy director, Katja Hall said in a speech on public sector procurement this morning (Tuesday).

At the same time, the Government must focus more on managing rather than delivering services itself, she said.

Launching a new report at the Government Knowledge and Procurement Conference in London today, Ms Hall said: “By 2015 England will need 450,000 new primary school places; by 2035, we’ll have double the number of over 85s in the population; by 2058, total age-related spending will increase by 1.6% of national income; and by 2061, projections show public sector debt rising to 90% of GDP.

“We must begin to think of how we respond. Do we cut back? Or do we find new ways to get the same, or better, outcomes while keeping the finances in check?

“We believe that in response all levels of government will have to shift their role from being providers of services to commissioners and market stewards — building diverse, competitive and well-managed functioning markets.

“For us to realise the benefits of markets, the public must first have confidence in them and know that every penny of tax is being well spent.

“All providers — public, private and third sector — should recognise this and appreciate that transparency is now an end in itself in supporting trust.

“It is also essential to identifying poor standards and dealing with them - it shouldn’t take a whistle blower to identify poor delivery anymore.

“Transparency helps to make the case for markets — the more that people see their services are responsive and open, the more likely they are to accept change."

The CBI report, Licence to operate, sets out guidelines for proactively releasing provider performance information and proposals on continuity of service.

Ms Hall said: “We need to see a concerted effort by providers and commissioners to release more accessible information, more often — from waiting times to the numbers of customers served - we want the public to be able to compare and contrast.

“Trust is important too because we know public services differ from other markets because of the extent to which vulnerable people rely on them.

“And for those who rely on essential services, such as health and social care, provider failure has real consequences.

“Three-quarters of people are happy for the private and voluntary sectors to deliver services but only as long as they can trust that the service will still be delivered even when a provider fails.

“That’s why our new report sets out our ideas about how public service markets can provide such assurances to the public.

“We propose that diverse and competitive markets are central to this, and the new Competition and Markets Authority will have a role to play in promoting this.

“Similarly, government has to learn how to become a market-maker rather than the default deliverer.

“Key to this is the need for commissioners and providers to work together to plan how continuity of service will be guaranteed.

“But also, government must learn how to monitor providers effectively and efficiently — monitoring requirements can’t become a barrier to entry themselves.

“And to give the public assurances about what happens if things go wrong, commissioners must have a clear plan for intervention from the very beginning.

“Service failure should not be taken as a sufficient reason to the public sector’s default mode of ‘in house provision’ of services - rather, we should aim to realise the full potential of markets by learning from failures and making sure they do not happen again.”

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