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Managing failure and turnaround in public services

Amidst austerity, how can government better support turnaround?

Another five years of austerity is likely to contribute to more failures in public services. How can government better support turnaround? How can failures be spotted early and addressed? Chris Wajzer and Emma Norris are launching a new Institute for Government project to investigate.

Managing failure is one of the most critical issues public services are grappling with at the moment. The Government’s recent Spending Review might have been met with relief in some quarters but, having already absorbed a 27% reduction in the last five years, local authorities face significant further cuts in real terms between now and 2020. According to PwC’s The Local State We're In, eight in ten local authority chief executives believe some local authorities will enter financial crisis in the next three years. North Cumbria, Devon and Essex are now subject to the NHS ‘Success Regime’ for underperforming health and care economies, and eight in ten NHS trusts are currently a deficit. With a history of patchy responses to serious service failure and ongoing challenges to talent recruitment and retention, children’s services have seen year-on-year increases in demand, and funding reductions. As spending reductions bite and demand rises, the risk of failure in the public sector is likely to increase. To date, the systems in place for managing failure –from central government departments and regulators through to frontline services – have demonstrated mixed capacity to anticipate, avert and recover from failure. There have been well-documented failures at Mid-Staffordshire NHS Foundation Trust, Rotherham social services and Doncaster Metropolitan Borough Council. In all these cases, there were unambiguous signals that services were struggling, but the ability of various actors to take action was hampered by a range of factors including cultures of denial, unclear roles and responsibilities, and limited triggers for intervention. Yet there are also examples of good practice where actors have been able to respond in ways that have averted failure. For example, in Basildon and Thurrock NHS Foundation Trust, clear protocols allowed the trust to act upon early warning signals at the request of the regulator. Interventions were targeted towards the root causes of failure; and governance, monitoring and compliance systems were overhauled to improve the capacity of the Trust to identify and respond to future problems. Failure, whether we like it or not, does happen. What’s important is that effective systems are in place that allow various actors to respond well. In this context, the Institute for Government is launching a project to look at the effectiveness of current systems in place to manage failure and turnaround. In part, we will do this by looking at the stories of individual services that have moved from experiencing serious problems to improvement. As the diagram below illustrates, this is often far from simple – this is just one stage of the NHS Foundation Trust Special Administration procedures.  
  Over the next four months, we’ll be focusing on:
  • examining the different types of failure across the public sector – from financial failure to policy or performance failure
  • mapping out current approaches and regimes for failure in different sectors, to shed light on how these work and whether clear approaches exist
  • investigating good practice case studies with respect to anticipating, averting, and responding effectively to failure, at both a national and local level
  • identifying the strengths and weaknesses of oversight systems, and what improvements might be useful.
We want to work with partners to explore these issues and draw on as much knowledge and experience as possible. If you’re interested in hearing more, particularly if you have suggestions for possible case studies, please do get in touch: Chris Wajzer, Senior Researcher: Emma Norris, Programme Director:

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