The Tories know the price of everything but the value of nothing

Below is a copy of my speech at ResPublica’s event on the importance of social mobility in public service procurement.

“I want to start by thanking both ResPublica and Chris White MP not only for hosting the event here but also inviting me to speak on such an important matter. If I may so, it is typical of the socially responsible ethic promoted by ResPublica and Philip Blond to raise these valuable issues.

There will be others today who will focus, through their experiences, on the detail, but let me start the discussions with some thoughts on social value in public sector procurement as procurement is a key responsibility in my role as Shadow Minister for the Cabinet Office.

First, it is quite clear to me that the argument in favour of taking account of social value in purchasing decisions is overwhelming.

There is an old expression that in a market economy we all know the price of everything but the value of nothing.

Much of the current reform of public services is being driven by increased marketisation and outsourcing. There is a very real danger that judgements about public services will be based on a crude analysis of the lowest price alone.

Of course, purchasing managers have long wrestled with the problem of defining non-monetary factors in judging tenders.  And it will be interesting to hear how you address this complex issue today.

But whether clearly defined or not, social value matters.

In everyday life, the purchasing decisions of each one of us, even in areas where price dominates, such as retail and banking, are rarely made purely on cost alone. This is increasingly the case despite the mass marketisation of almost all areas of our society.

For example, I and many millions of others always attempt to buy fair trade because I want to support ethical employment practices.

The 2006 Companies Act was the biggest shake up of UK company law for 150 years. When the Bill was going through Parliament, I along with several colleagues fought for amendments to the Act to deal with the supply chains of the largest companies. Over 100,000 people contacted their MP directly in support of our amendment to enshrine social and environmental value in legislation.

As a result of this amendment then being passed, the biggest companies in the UK are now required by law to publish their supply chains annually. This enables the public to make informed purchasing decisions based not simply on price, but also on ethical, environmental and social values too.

Such companies reporting social and environmental impacts has allowed campaign groups and the public to make informed decisions as to which product to buy and from which company.  Indeed pressure from groups and the public forced many companies to focus on and improve their social value.

When buying clothing for example, the working conditions of those making the clothing can be identified and this information can then be part of an individuals’ decision making.

Despite the recession and current economic situation, fair trade products are thriving and sales continue to outperform overall commercial trends with growth up 12 per cent in the last year alone. Clearly, therefore the importance of social value to the individual consumer continues to grow.

Of course these decisions are made by individual consumers deciding how to spend their own money. The situation is slightly more complex if you are spending other people’s money. Nonetheless, it is surely right that we, as elected representatives responsible for taxpayers’ money ought to take into account the need to balance price with broader ethical and social issues.

In fact, it could be argued that our obligation is all the greater, because collective responsibility is a far better opportunity to make an impact and generate wider-reaching outcomes. There need not be a contradiction between wider social issues and price.

If for example a local authority can increase the consumption of locally produced goods and services at competitive prices by procuring services from local suppliers, then they can both secure a good price for the taxpayer but simultaneously generate increased local affluence thereby raising the tax base for the local authority which then becomes a virtuous circle.

As leader of Leeds City Council I made it my mission to know procurement inside out. The need to spend wisely and prevent abuse and corruption were of course key factors in my mind, but the need and above all the obligation to help the local community in a time of great difficulty was equally a major driving force. At that time, this practice was known as contract compliance.

However, as I am sure many of you know, the Thatcher Government, which was in power at that time, did their utmost to abolish such procurement practices that took account of social values. Contract compliance was largely outlawed.

However recent headlines, particularly regarding care for the elderly and the example of Southern Cross care homes have brought wider attention to the dangers of price as the main or only value used by procurers. Who among us would want to put their parents in a care home which had been selected purely on the lowest price?

Let me turn now briefly to the current situation. The Coalition is in danger of facing two ways at the same time.

Back in 2008 for example, David Cameron himself spoke of the importance of social value and went some way in setting out how it would be prioritised. In one speech he said:

“The next Conservative Government will attempt to establish a measure of social value that will inform our policy-making when in power.”

Chris White’s admirable aim in his Private Members’ Bill to pass the idea of social value into law was a product of this thinking.

But despite the Prime Minister’s early enthusiasm, it is clear that there is a gap between his Government’s rhetoric and the reality of their procurement policies. After over two years in government there is now what amounts to a whole series of missed opportunities to which we can point.

For example, there is only one reference to ‘social value’ in the Government’s entire Open Public Services White Paper, simply stating that ‘social value’ should not be ignored. But ignoring ‘social value’ is precisely what is now happening.

During the passage of the Public Services (Social Value) Act, it was very clear at every stage that the Government was merely paying lip service to the Act’s objectives, and was in fact undermining some excellent clauses.

At the second reading of the Bill, during which I spoke for the Opposition, I argued that there was an irreconcilable tension between the communitarian aspirations of its author and the Tory’s neo-liberal drive to reduce the cost and extent of government. It seemed to me that there was an ideological faultline between the idea of value-laden commissioning on the one hand and price-driven tendering on the other.

I predicted that the latter imperative would will over the former. Regrettably my premonition about the Government’s intentions proved to be accurate.

The Minister for Civil Society, Nick Hurd, tabled more than 20 amendments to the Act, each diluting and weakening the original. These Government amendments included inserting a clause stating that social value could be “disregarded” in cases where the need for urgency was paramount. Some might say that a coach and horses could be driven through that clause.

Not only this, the Bill also originally included a requirement for the Government to publish a “national social enterprise strategy”, and another clause which committed local authorities to promoting social enterprise in their area.

Both of those clauses were removed – as were the words “social enterprise” from the title of the bill- itself a clear signal that the Government’s intent was to limit the Bill’s remit.

The Government’s amendments also restricted the Bill to include only public services, removing contracts for goods and work as well as limiting the scope of the Bill to the pre-procurement stage of the commissioning process.

But I do not want to conclude my comments on a negative note; it was very good that the Bill became law.

We are all having to become experts on commissioning and procurement as the state is being re-shaped. Equally it is evident that there is a growing consensus that price alone cannot be, or at least ought not to be the sole arbiter of contract allocation.

I do believe that there is scope within existing legislation and practice to find ways of taking account of social value in our procurement decisions and I strongly endorse the idea.  We will monitor carefully, how the Government and all other public sector bodies conduct their procurement decisions in the light of these thoughts.  In the meantime may I wish you well in your deliberations.”

Government continues civil service blame game.

‘The Conservative Dilemma’

Jon has published a pamphlet, ‘The Conservative Dilemma’ analysing new data and recent polling, showing how the Conservative Party faces an existential crisis. The article below appeared on the Guardian, and the full pamphlet can be downloaded via the link below:

Beneath the blue silk ties, Savile Row suits and faux bonhomie, tribal hatreds threaten to consume sections of the leadership of the Conservative party. Flashes of the venom occasionally spill over into the public domain.

Francis Maude allowed his frustration to show for an instant when he said: “The Conservative party will always suffer if it is seen as trying to turn the clock back to an imagined golden era.” Who else could he have been turning his fire on but Thatcherites such as Liam Fox and Norman Tebbit?

Or what about Nick Boles MP, who said: “Only by showing we really are on the side of ordinary people will we turn the Conservative party back into a truly national party”? We can deduce from this that he clearly sees his party as one that is seen as representing only the elite.

But here is a riposte from a senior Tory activist writing in the Telegraph: “The party needs to have courage to stand up for its traditional values. We should be unashamed about promoting our ideals and principles. Most voters want controlled immigration. Most oppose European integration. And most share our support for freedom under the law and free markets.”

Now, we can choose to interpret these contending ideas and factions as a curiosity, a part of the detritus of every day politics and a reflection of the seething personal ambitions that poison so much of Westminster life. But to do so would be a mistake and would trivialise the issues at stake. For the Conservative party faces an existential threat. These surface tensions reflect the underlying decay of the Tories’ traditional social base.

The more perceptive among them understand the need to change. Lord Ashcroft put it succinctly when he said: “The need for new supporters is a mathematical fact.” But in reality they are thrashing around for new meaning in a period of rapidly shifting demographics, which they can barely understand, let alone control.

All of this will make fascinating social and political history, but for Labour it is far more important than that. In order that Labour can win again, we need to understand the crises with which the Conservatives are struggling and to adapt our strategies accordingly.

In retrospect, the 1992 election marked a turning point for the Conservatives. It was the last time they were able to construct a Commons majority based on attaining a vote of 14.1 million spread geographically across the country. Since then, they have never secured more than 10.6 million votes.

Lord Ashcroft undertook research into his own party’s failure after the 2010 general election. From this polling, two categories of Conservative voters can be identified – the true blue Tories and the 2010 cohort. The true blue Tories are the Conservative party’s core group of supporters, who are generally aligned to rightwing issues, such as crime, immigration and taxation. They are also less likely to be socially liberal or to support issues such as gay marriage. Lord Ashcroft puts this group at about 8.2 million people.

The 2010 cohort had rarely or never voted for the Conservative party before 2010, and tends to be more socially liberal and protective of public services. They number about 2.5 million voters.

There is also a third group, those who considered voting Conservative but thought better of it for a variety of reasons. These are the “considerers” and they number nearly 2 million.

The Conservatives desperately need to appeal to all three groups to have even a chance of gaining a majority at the next election, but the tensions surrounding these three groups are nuanced and complex.

A significant section of the true blue Tory base is showing signs of deep anxiety about the “liberal” aspects of the Cameron group’s politics, to the extent that significant numbers are now looking to Ukip; indeed, 35% of Conservative party members could see themselves voting Ukip in the next general election.

At the same time, the 2010 cohort has almost entirely deserted the party, alienated by the government’s approach to a number of touchstone issues. The NHS shakeup, coupled with a deeply unpopular and unfair budget, led to overall support for the Conservatives descending to the levels of the 2005 and 2001 elections.

The Conservative considerers create further tension for the party. Their values tend to be more in line with those of the 2010 cohort, but they think the environment and improving schools are much more important issues than the 2010 cohort do. Recent polling proves that both the 2010 cohort and the considerers have abandoned the Conservative party in considerable numbers.

The truth is that the Tories face problems on both flanks.

Behind the scenes, it is clear that some Tory strategists have accepted that it will be very difficult to build an electoral majority with present trends. But they have hit on a cunning plan. They will seek to gerrymander British constitutional structures, for example by changing the boundaries and voter registration, in an attempt to prevent the Labour opposition from building its own majority while seeking to filch as many parliamentary seats back from the Liberal Democrats as possible.

However, the Conservative crisis does not mean that the Labour party is guaranteed an easy ride. There is much to be done in order for Labour to become the party of government at the next election The most often quoted law of politics in the democratic age is that elections are always won in the centre. Following the defeats that began in 1979, Labour lost its self-confidence and occasionally gave the impression that it had come to believe that, in order to win, we had to camp out on a kind of politics that was wholly centrist and even centre-right. The Labour party now has the space to put an end to this triangulation and to establish its own independent identity based on our abiding values of community, justice and equality.

Click here to download in full  The Conservative Dilemma pamphlet

Jon Trickett responds to Government’s Civil Service Reform Proposals

The Government today (19th June 2012) announced their Civil Service Reform White Paper to Parliament. As Shadow Minister for the Cabinet Office, Jon Trickett MP responded for Labour, the full text of Jon’s speech is below:

“I thank the Minister for his courtesy in providing me with an advance copy of the plan, and for taking some time to explain his thinking.

The British civil service is widely admired, and rightly so, for its core values of honesty, impartiality and professionalism, and that is why it is so worrying that in the past two years the Minister has presided over chaotic change, which has seen a collapse in morale and more than one in three of the most senior civil servants leaving voluntarily. We, in contrast, sought radical but incremental change in the service.

On accountability, management culture and increased flexibility, there is always more to do, and we will support and, indeed, welcome sensible reforms such as improving management culture, information systems and skills development. We especially welcome the drive to digitise. It is essential to promote this process so that we obtain the highest possible levels of productivity from all staff. How does the Minister see digitisation proceeding?

In an era of flexible networks, the civil service can be seen as over-hierarchical and bureaucratic, as well as operating within self-contained departmental silos. Will the Minister indicate his intentions in reducing hierarchy and bureaucracy? The civil service has often been criticised in relation to procurement, IT, the management of change, and project management. What plans does he have to improve performance in all those areas?

I note the Minister’s suggestion that there should be interaction between the civil service and the private sector, but will he confirm that he is not making a presumption that private sector experience is somehow superior to the service of the public within the public sector ethos? We welcome the increased accountability of the civil service to Parliament and his comments on the Public Accounts Committee. On public sector mutuals, will he ensure that more information is placed before the House on this matter in due course?

The Minister has proposed that the performance of the worst 10% of civil servants be addressed. What consultation has he had on that proposal, and when does he intend it to be introduced? Of course, we welcome the drive to improve the standards of management in the public service, but is there not a danger that he and his colleagues may indulge in a blame game? After all, the problems that his Government face result from the failure of Ministers, not of the civil service.

In identifying the worst-performing public servants, perhaps he might consider the proposal that he name and shame the poorest Ministers; I can see one of them talking to him on the Front Bench now. Perhaps he does not need to, though, because the court of public opinion has already rendered its verdict, at least in relation to the Secretary of State for Health. Given the double-dip recession, does he agree that at least the Chancellor of the Exchequer should now be placed in special measures?

Has the Minister done any U-turn on regional pay? Will he confirm that while there is nothing wrong with sensible local bargaining of the kind that we did when we were in office, we live in a single United Kingdom and the suggestion of large-scale regionalising of pay is divisive and should now be dropped?

The Minister has said that he intends further to reduce the size of the civil service and that the Government would cut back-office staff and not front-line services. Staff reductions on the scale that he has announced cannot possibly be easily developed. We are not talking about simple numbers on a page but real human beings facing redundancy at a time of high unemployment. These people have chosen to serve the public. How does he intend to deal with the human consequences of his decisions, and will he be engaging with the trade unions and other staff representatives in this process? His staffing estimates must be based on detailed risk impact assessments. For example, will the country be left vulnerable as a result of further cuts at the UK Border Agency, in the police service, or elsewhere? Will he agree to place in the Library copies of all departmental risk impact assessments of staff reductions?

On the sensitive area of the relationship between Ministers and civil servants, I have two concerns. The Minister proposes to formalise the process of seeking policy advice from outside agencies, and he intends that Ministers play a larger role in appointing permanent secretaries. We welcome careful progress on both those suggestions, but equally, is there not a danger that they might lead to cronyism and a dangerous politicisation of the civil service? What assurances will he give to the House that in engaging in the appointment of civil servants and in selecting external agencies providing policy advice, neither of those matters will fall into disrepute because of ideological, or even personal, favouritism by particular Ministers?

We welcome the positive proposals in the plan, but it will do little to correct the chaos that now exists in many Departments. After all, the point of reform is to make things better than they were before.”

Text taken from the full offical Hansard account here: http://www.parliament.uk/business/publications/hansard/commons/todays-commons-debates/read/unknown/214/#c214