Open-sourcing vs outsourcing

Summary

The Cabinet Secretary Sir Jeremy Heywood floated the idea of outsourcing policy advice functions to the private and third sector at a seminar hosted by the Institute for Government. It did not go down well on my side of town.

Declaration of interest: I’ve been along to an Institute for Government event where I met Ellen Hallsworth amongst other people. See Puffles here.

“Are you —-ing mad?!?!” Was my initial response after Ellen Hallsworth of the Institute for Government tweeted that the Cabinet Secretary Jeremy Heywood had floated the idea of outsourcing policy advice functions of the civil service. Sir Jeremy was not on his own – Sir Bob Kerslake, Head of the Civil Service was on the panel along with Francis Maude, Minister of State at the Cabinet Office.

Some might think that such a response is typical of a former civil servant and ex-trade union rep who’s forgotten that he no longer has to be native anymore. Others – such as @Radegund (a local Cambridge Tory activist) see the civil service as a vested interest in itself, and is anything but impartial. Dr Dave O’Brien, who lectures on public policy at City University saw the idea as a bad one. And that was one of the more polite comments.

Identifying the problems

The event stemmed from a report by the Institute for Government – in particular an “Open Letter” from Peter Riddell to the two knights at the top of the civil service. For those of you interested in public policy, it’s essential reading. Riddell summarised the points in a column in The Telegraph. For those of you not familiar with Peter Riddell, see here.

There are countless examples of the civil service getting things wrong, and I give it a kicking myself when I think it deserves it. I also stand up for it too – how many other columns or articles have you seen titled “In defence of the civil service”?

The significant job cuts and the growing pressure for transparency on the back of recent developments such as the internet and social media have changed the civil service beyond all recognition. Some of the people I used to work with used to tell me stories of what life was like with ‘the typing pool’ – i.e. where if you wanted something word-processed, you’d write things out by hand and send it down to the typing pool for it to be typed up. Yet the move from typing pools to social media is within the living memory and working careers of a number of existing civil servants. It’s come a long way in a very short space of time. Sometimes we forget just how quickly technology is advancing when looked through a long term historical lens.

In my final year of my recent civil service career, I stumbled across one minister talking about the concept of “open source policy making”. My initial reaction was that it was a stupid idea…until I started using Twitter on a regular basis. It was then that ideas of ‘open source policy making’ began to make some sense. Rather than having civil servants and a small group of “key stakeholders” (who unfortunately more often than not were the interests that could afford to staff full-time people to engage in a particular policy) making policy, opening up policy-making processes using the tools social media has for us, was its thrust.

Regular readers of this blog are aware that I’ve been exploring the impact of social media on policy making and public administration for over a year. For those of you interested in  my detailed thoughts, have a look at this slide pack from UKGovCamp2012. For those of you who don’t want to go through lots of slides (which is probably most of you), have a look at these three slides that I’ve extracted and put a dragon fairy on. This is what I mean by policy teams having to move from the ‘safe’ environment of conversations with key stakeholders to being in the middle of ‘the network’ – or the hive of social media users.

Open-sourcing policy making in this manner is a good thing – in my opinion. It increases transparency – people can see how policy is developed and what evidence backs policies. It can also become clear who is backed which policy in its developmental stages and why. Fewer private 1-2-1 meetings and conversations with vested interests.

Outsourcing policy making…now that is somethin’ else! I gave outsourcing a bit of a kicking on the back of The Guardian’s headline on further police outsourcing in my article Contractual vs Democratic Accountability. This is not about bringing in consultants for a short time-limited period.

It’s one thing bringing in consultants in to advise on a specific area. Ideally they are brought in because they have expertise that the civil service does not. All too often I have found that consultants have been brought in to cover for shortfalls in an administration budget. You can’t hire staff because of cuts to an administration budget but you can hire consultants with your programme budget! One of the reasons why consultancy in the public sector has more than a bit of a bad name. At least with the hiring of consultants, the control rests with the civil service and ministers. In efforts to reduce consultancy spend, limits requiring central finance, senior civil service and ministerial sign off have become tighter.

The issues I see around Sir Jeremy’s musings are as follows:

Propriety

How do you ensure policy-makers from outsourced firms are not developing policy that is for the benefit of their corporate paymasters? It’s one thing having a consultant brought in to help a team, but quite another to have that entire team made up of consultants. As a civil servant, you don’t have that conflict of interest.

Corporate memory

I can see it now: A team of highly paid consultants at the top supported by a team of temps from the household names. Corporate memory goes out of the window. Temping has a high degree of staff turnover by its very nature. When the policy contract comes to an end, the entire team disappears, leaving the department concerned with zero corporate memory for the future. One of the benefits of having a permanent civil service is that people are able to bring in their learning of what went wrong in the past to bear in their present policy-making. For more on this, have a look at my blogpost Reshuffles, corporate memory and policy making.

How do you measure success?

To what extent can you attribute that success to the policy-making team? Did the policy succeed because of the team or inspite of it? Policy making is not like making widgets – it’s a damn sight more complex than that because there are so many other factors that can affect the outcome you want to achieve. You are not in control of nearly as many of the variables as perhaps you would like to be. How do you draw up a contract that can get the best out of a commercial firm as far as policy goes?

Political uncertainty.

Remember the regular reshuffles that Blair and Brown had? This for me was one of the biggest factors in why Labour did not achieve what it set out to achieve in the late 1990s. There was too much churn and uncertainty coming from the top. Too many turf wars. People often assume that policy does not change that much when there is a reshuffle. Believe me, it can – and often does. What might be the pet policy or project of one secretary of state may not be those of another. Suddenly the funding is pulled and policy officials are reassigned. But if you’ve outsourced your policy function on the basis of a former secretary of states priorities to find they are no longer priorities of the latter…yes…expensive contract cancellation charges.

The Civil Service Code

Just before the 2010 general election the Labour Government passed the Constitutional Reform and Governance Act 2010. How do you make more longer term policy functions compatible contractually with the requirements of the Civil Service Code and the requirements of that Act? If outsourced staff are doing the same jobs as civil servants, shouldn’t they be afforded the same terms, conditions and protections as civil servants? Or do we risk a two-tier civil service?

Job security

Would those working for outsourced policy teams have the same rights and protections as existing civil servants or would they be treated as associates/consultants? How do you deal with pay, tax and national insurance? It might look like it’s saving on your bottom line, but on the bigger picture I can’t imagine the massive amount of job insecurity that would inevitably go with such a model going down too well. I also don’t buy the “Well that is how it is in the private sector, so why shouldn’t it be like that in the public sector?” argument. I am now in the private sector and started by working career in it too – working first in retail (while at sixth form college) and then for a bank for a year between college and university. I saw the impact of a disenfranchised frontline workforce being crushed by huge corporate interests with executives on eye-watering salaries. At one staff conference I saw a stupendously well remunerated chief executive telling a bank clerk who had not had a pay rise for five years (despite her & her team exceeding their targets) that the company could not afford such rises. (They could – their profits & executive salaries told us that). What’s the risk that it’ll be the senior executives of outsourcing firms that benefit again, leaving low-paid staff losing out? My personal take is that things have swayed too far in favour of the super-rich and I can’t see how this sort of model is going to make things better both for the general public as well as those working for public services.

Yes, the civil service needs to improve. I don’t like using the term “reform” or “develop” because I feel more often than not the terms are associated with testosterone-fuelled political posturing. Reforms and developments don’t always improve things. The Poll Tax was a reform. The privatisation of the railways along the model used (i.e. complete fragmentation of the network in a manner to make renationalisation impossible) was a reform. Did it do any good for the general public? No.

My message to Sir Jeremy and to Sir Bob? Open-source: Yes. Outsource: No.

This entry was posted in Party politics, Public administration & policy, Social media. Bookmark the permalink.

7 Responses to Open-sourcing vs outsourcing

  1. Alex Marsh says:

    Good post, as ever.

    I think the propriety argument needs making strongly. One of the challenges we face is that this Government seems to think of public service as equivalent to, or having no broader dimension than, any other type of service you might buy on the High Street. Hence you might as well out-source it, if a private supplier is interested in doing it cheaper. This disregards, either intentionally or unintentionally, the broader perspective on what public service represents and the values upon which it is (or should be) based.

    If you’ve not seen it then you might be interested in Christopher Pollitt’s 2008 book ‘Time, Policy, Management: governing with the past’. One of his arguments there aligns with yours – much of the ‘modernisation’ associated with the move away from bureaucratic organisation, under New Public Management, towards more flexible, contractual, future-oriented organisations results in institutional amnesia.

  2. Simon says:

    It is a good post – and it puts the case against very succinctly. But I’d hate to see an interesting idea dismissed without deeper consideration of its potential merits.

    I want to be clear on terms. I am not a fan of policy outsourcing per se, but I might like to see an element of policy contestability. The difference is that outsourcing implies handing big contracts over to Deloitte or KPMG for a long time. That’s a bad idea for all the reasons listed above.

    But contestability might mean that a certain amount of the government’s policy spend is up for grabs – this isn’t all that radical given that aspects of the health bill appear to have been very influenced by McKinsey and I’ve seen eg Big 4 consultancies doing work that looks a lot like policy development. You might argue that this is a bad thing and I’d agree, but my problem is the lack of openness that surrounds these arrangements rather than the fact of their existence.

    Policy contestability might be a good thing for some of the following reasons:

    1. It allows access to a wider range of expertise – why should ministers limit themselves to what the civil service can offer? If a project requires specialist expertise, hire people with that expertise from outside (better than bringing them in as DGs?)

    2. It can promote joining up – set up central budgets held in the cabinet office for strategic priorities, then let departments and others bid for the money to do policy and implementation work. All of a sudden, departments will be bidding to show how effectively they can join up with others, rather than talking a good game but failing to deliver.

    3. It can improve implementation – if some of the people commissioned to deliver policy are practitioners (eg the VCS, local government officers) then you’re developing policy that is already embedded in the delivery system. That’s got to be a good thing. I’ve got an awesome example of this working in New Zealand (self promotion alert – see SKIP example on p.65: http://www.demos.co.uk/publications/reimagininggovernment).

    4. It needn’t destroy organisational memory or civil service capacity: I would expect that contestable projects would still have some significant civil service involvement as client and probably as participants in cross-cutting teams.

    5. It brings in innovation and creaitivity: the civil service recognises that it’s not good at innovation. Indeed, many civil servants I’ve interviewed are not sure they should be innovative – their job is to weed out bad ideas, protect ministers and deliver implementable and effective policy. It’s not to come up with Hilton-esque ideas. So contestability could bring in a different culture.

    To my mind, some form of greater contestability is part of a strategy to open source policy using x-teams, engaging deliverers and bringing in new ideas. I see it as a way to engage a much wider range of innovative thinkers in the process – what about policy making mutuals and social enterprises, civil service spin outs? Local government officers and nurses could be active players in policy processes.

    This should be about pluralism, not privatisation.

  3. Pingback: Cabinety Secretary Floats Idea of Outsourcing Policy Advice Functions to Private and Third Sector #NPPF « Decisions, Decisions, Decisions

  4. PClaytonsmith says:

    Interesting blog post and comments, much of which I share views with Simon on. I certainly don’t think this idea should be dismissed and like Simon have noticed some policy that has already effectively come directly from Thinktanks and other influential players, with Civil servants working out the detail of the policy and not policy creation. In fact you could argue this is the basis of all policy after a government comes into administration after general elections.

    You could also argue that broadening out policy creation or principles to other players might actually have a more inclusive approach. I accept Civil servants are impartial and apolitical, but equally I’ve also seen policy ideas put forward by local government over my twenty odd years in the sector and other sectors that have had their essence removed by the Whitehall policy machine.

    I do think this is a debate that has to be had and unfortunately using words like ‘outsourcing’ by the original article is unfair to the debate. ‘Outsourcing’ is a bad word in some quarters, as it makes people consider the big 4 and not perhaps other players.

    More debate on this please!

  5. Dave O'Brien says:

    Both Simon and Alex make excellent points. I think what might extend both is a discussion of the democratic aspects of public services. As Alex says the idea of privatisation disregards a potential broader perspective on what public services are for. I think it particularly misses the idea of public service training as having some form of neutrality or objectively vested within it. These are clearly highly contested terms, as both critiques from public choice theory and recent scandals of elite lobbying tell us. However that’s no reason to decide that the Civil Service can be equated to just another interest group who may, or may not, be able to deliver policy outcomes more or less effectively. They have a place within democracy.
    The issue is that the Civil Service, particularly those parts associated with what we might think of as ‘policy’ rather than frontline ‘delivery’ is part of our political system and has a constitutional position. The idea that we might outsource questions of policy development, appraisal and evaluation raises huge questions for democracy. For example, although KPG and PWC have expertise as management consultants, would we want them developing policy within Whitehall? As the recent debate over the health service reform has shown, powerful groups can often shape policy in ways that attract extensive democratic protests. Do we wish to see more of these issues embedded in the way the policy process works?
    This is not to defend a perfect vision of a Civil Service guarding against politicians; rather it’s to assert the need to remember that the seeming bland statement of administrative form may skew the policy-making process further away from the version of democracy that is implicit in the Westminster/Whitehall system.

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