Better training – what does the West Coast debacle tell us about commissioning skills?
This summer, the Institute warned (again) that civil servants did not always feel well equipped to manage some of the complex contracting arrangements that are now central to many public services. In our report Commissioning for Success we noted that the problem was particularly acute in those departments who were relatively new to the contracting. Many officials backed the National Audit Office’s (NAO) assessment that some departments did not even know the precise skills gaps they had, let alone the plans to address them.
The Department for Transport (DfT), however, is not a department that is new to contracting. It has been dealing with rail franchising arrangements since 1993 – with a reasonable degree of success, according to the latest NAO franchising report. There have always been minor problems attracting and retaining staff with specific commercial skills – perhaps a reason why former Cabinet Secretary, Lord O’Donnell, suggested higher pay might be needed – but it’s not immediately apparent that that rail franchising is an area of endemic government failure. Indeed, DfT can teach other departments a lot when it comes to managing public services through market-like arrangements. For example, its processes for ensuring continuity of service for users when providers fail are far ahead of those in other sectors (think Southern Cross).
This raises the question of whether civil service headcount reductions of 20 per cent or other recent changes have disrupted matters – a question that will now be looked at, no doubt, as part of the reviews of what went wrong. These reviews need both to assign responsibility and to identify any systematic weaknesses in the DfT’s approach – not least because further franchise negotiations are in the pipeline.
The focus, however, should not just be on DfT. Rather, other departments should be pulling out all the stops to understand whether they themselves are equipped to manage public services through more market-like systems. Are GP commissioning groups going to be ready to ensure value for money in purchasing healthcare? What new skills does the Department for Education need to shift from a system where schools are tightly performance managed to one where academy chains compete for pupils (and grow or disappear accordingly)?
Crucially, this is not simply about attracting ’hard-nosed commercial skills‘ from the private sector. Those overseeing competitive provision in public services have additional responsibilities that a private sector commercial director doesn’t have. For example, officials need to ensure that consumers are motivated to make good choices and have the information they need to do so; they need to ensure that poor providers leave the market but that service isn’t intolerably disrupted for users when this happens; and they need to ensure co-ordination with other public services.
These issues have all emerged as major challenges in past Institute for Government research. Leaders across government should see DfT’s current troubles as a salutary reminder that they need to assess the capability gaps in their own departments and take urgent action to address them.