Civic markets – a revolutionary new public service model?

July 20, 2010 by
Filed under: Politics, Public policy 

I have just spoken at an event hosted by the Public Management and Policy Association. As the topic was public service reform I had to wrestle with a way of describing the Coalition’s strategy. So what you are about to read is at least new even if it isn’t original or well-developed.  

I decided to label the Coalition’s emerging model for public services as ‘civic markets’. This describes the attempt to bind together a strategy for civic renewal (the Big Society) with a more traditional right of centre (accelerated New Labour) faith in market mechanisms.

In essence this means that more of the public sector will be opened up to competition among purchasers and providers but a variety of mechanisms will be used to try to ensure a stronger civic element to these markets. The mechanisms include:

  • Offering communities the chance to be purchasers and providers of public services – for example free schools
  • Expanding the scope for individuals to be in charge of purchasing services – for example through the expansion of personal budgets into health care
  • Outsourcing more public sector work and encouraging more third sector organisations to bid for public service contracts
  • Encouraging the emergence of hybrid services which combine public subsidy with volunteer effort, for example libraries which are largely staffed by volunteers
  • Seeking to turn parts of the public sector into semi-autonomous social enterprises, for example GP purchasing consortia
  • Giving the public a stronger voice in direct accountability and decision making, for example election of police chiefs, community veto on public service closures and an enhanced role for localities in developing their own local housing schemes
  • Encouraging civil servants to get out to the front line and work with community groups so that they become, in David Cameron’s phrase,  ’civic servants’.

There are a number of issues which a model of civic markets needs to address:

  • Coherence – these examples describe a wide varieties of models of ‘civicness’- from new forms of accountability to shifting services from the public to the community sphere. How do these fit together and could they conflict?
  • Efficiency – are civic markets the best way to achieve efficiencies?
  • Capacity – does society overall have the capacity to be the partner Government wants it to be?
  • Equity – as capacity is very unevenly distributed will privileged communities simply be much better placed to reap the benefits of civic markets?
  • Co-ordination – with elected police chiefs, GP social enterprises, free schools, community vetoes, where does overall place shaping and strategic planning fit (if at all)? Given the patchy nature of existing local collaboration and leadership, does this matter?
  • Accountability – where does accountability sit in this system, and what will happen when things go wrong?

The speech went down OK with questions which sought to develop the ideas rather than contradict them. So relying as usual on the intelligent comments of my readers I might elaborate on some of this later in the week.

Civic markets have a lot in common with vision for public services developed by the 2020 Public Services Trust here at the RSA but there are also important differences. So these are bewildering times for public service commentators and advisers, our thinking needs quickly to catch up with the scale and pace of change in Government policy.

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4 Comments on Civic markets – a revolutionary new public service model?

  1. carl allen on Tue, 20th Jul 2010 2:36 pm

    2. A market is a market. A civic market would be described as one that has dependable characteristics of being civic.

    Now market dependability is usually relative to a carrot and stick appproach where the norm is related to the carrots and variance is moderated by the stick. (Ignore consumer choice as a factor for the moment)

    So if the market is limited to civic players there is no or little need for sticks (regulation).

    Big question … does Cameron want a civic market, or civic players in the market?

    And thereupon hinges the effectiveness of the Big Society since Cameron shows no inclination to accept that a new type of regulation is needed fora Big Society as versus an absence of regulation.

  2. davy on Tue, 20th Jul 2010 8:38 pm

    3. In whose interest does civic markets really operate? Profit motive for public services is a tired idea however its dressed.

    Taxpayers money was used to bailout banks and instead of public officials seeking repayment we face sweeping cuts to keep the interest payments at a reasonable level (on debts caused by them and interest charged by them!).

    Would civic market concepts work on our public banks? Replacing bonuses with voluntary jobs to run banks (like the libraries idea).

    Private enterprise simply takes money out of the system for profit, unless it fails then it becomes a social debt and bailout. If the politicians can’t run the public finances then they should step aside now and allow the public – not politicians- to decide the BIG society they wish for and how it should work. This is a very top down restructure due to a failure of confidence and delivery of top down players, so it wont work and sounds hollow. Same old.

    Coherence, efficiency, capacity, accountability, equity and co-ordination didn’t operate at pure capital market success ie. banks/ financial system and they would just be a small selection of the problems ahead. The money simply is going in the wrong places. More volunteers please!!!

  3. mike reardon on Tue, 20th Jul 2010 9:12 pm

    4. Matthew – I also think there is a big piece about the limits to choice and the reconciliation of public policy conflicts which markets are notoriously unable to handle. This leads to conflict over the allocation of what will continue to be seen as public goods (even if they are individually consumed – such as school places maybe) and the use of public space and scarce resources.To my mind the notion of the human as agent that underlies the Cameron project is at odds with the more interesting conservative thinkers such as John Gary who would I am sure feel very queasy about the ‘humans as an essentially (using the words in a philosophical sense) co-opertaive species if set free from state interference’ schtick!

  4. IAN CHRISTIE on Wed, 21st Jul 2010 10:28 am

    5. Thanks Matthew.
    I have two big problems with the Big Society idea as it has emerged so far – and there is a lot of thinking and experimenting still to be done before the PM manages to make it coherent and concrete. (I read his Liverpool speech without feeling much the wiser at the end.) The two problems are these:
    1) Volunteering depends on free time , motivation and spare capacity, and these imply some level of financial security. The affluent early retired fit the bill perfectly. But who else does? The post-1955 generations will, by and large, not have anything like the pensions and assets of the babyboomers and those born in the 30s. They will have to continue to work well past 65. If this is not to erode the volunteering workforce, some means will have to be found to turn volunteering into livelihood in ways that work for all age groups – eg benefits in exchange for Big Society service, more LETS-type arrangements, and more creative part-time arrangements with employers .
    2) The PM used the word ‘local’ a lot. This makes sense: the work of community-weaving he wants to boost takes place at the local scale, and the services Matthew mentions are all local. But there is no coherent vision for how all this ties in with local democracy. The risk is that we end up with complete fragmentation – lots of disconnected arrangements for public voice and engagement in services, all demanding rather more than most people can afford or want to put in, and a ‘rump’ role for local elected councillors, who seem to be regarded as a problem for the Big Society and not part of the solution.

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