Newsroom & speeches
81/07
18 July 2007
1. It's a pleasure to be here to talk to you today, good morning ladies and gentlemen. I'd like to thank Professor Lawrence Freedman for that kind introduction, as well as for his huge contribution to the debate about defence and security policy in the UK, including feeding into the Treasury's own build up to the Comprehensive Spending Review.
2. I'm pleased to be able to make my first speech as Chief Secretary at King's College - one of the oldest, largest, and most distinguished universities in the UK, with a worldwide reputation for its research and teaching. And I'd like to thank King's College, and particularly the School of Social Science and Public Policy, for hosting and organising this event, and to all of you for coming.
3. I wanted to talk, early in my time as Chief Secretary, about a subject that touches the lives of every citizen, and that is my main responsibility - ensuring that the Government spends the public's taxes effectively, and delivers the world-class public services that Britain deserves.
4. So today, three weeks in, I want to talk about the way I plan to do that. And I particularly want to talk about the reforms we're making, alongside this year's Comprehensive Spending Review, to the way in which the Government sets its priorities for the outcomes we want to achieve, and about the principles and characteristics that underpin our framework for performance management.
5. This is vital - because the way we set out and manage those priorities sets the climate in the public services, and determines the nature of the relationship between Government, public service professionals, and citizens.
6. In my view, we need a better match between the Government's priorities and those of the people on the frontline of public service delivery - and of course of the public. And we've seen over the last ten years the importance of those at the frontline understanding why politicians have set the objectives that we have, and not feeling alienated by targets being imposed on them.
7. And because of that, this year, we propose to make radical changes to improve the framework for Public Service Agreements, known as PSAs. I'll be clear on what PSAs are: they're the top priorities that we, the Government, want to achieve in the next few years, specific goals agreed between the Treasury and departments. And I want to be clear, because I want the way we set and manage our priorities to be easily understandable, in plain English, and jargon-free, so that anyone can pick it up and understand it.
8. Taking a step back, when we introduced PSAs for the first time, back in 1998, it was a major step - the first time that the Government had set out the key outcomes it expected its investment and reform to deliver. And our approach to them has been evolving ever since.
9. Over the last ten years, I believe we've made a huge amount of progress, but also learnt some valuable lessons - and we face different challenges today than we did in the past. And we have to recognise that the approach we've had in the last decade won't necessarily be right in the next.
10. So, as I said, we plan to make radical changes to establish the new set of PSAs. That process isn't yet finished, and so there is time to contribute. But we want the new PSAs to be:
11. We want our new priorities, our new framework, to have these characteristics - and to form the basis for a new relationship of trust in public service professionals and organisations, and a new era of ambition in Britain's public services.
12. This change is about continued renewal in Government. And if we get it right, it will set an ambitious course for Government over the next three years, building on the last ten.
13. The new relationship, and the new era, can only come about if we understand what's happening at the frontline of public service delivery, and recognise that it is frontline professionals - whether in the public, private or third sector - who deliver the public services people experience - and that they need to be empowered to do so.
14. I think it's important for me to spell out what this is about, and what it is not. It is not the abandonment of targets as a tool of performance management and local accountability. Existing targets will need to be met and operationalised, and there will be no slipping back.
15. So targets will still exist - because they can play an important role in service delivery. But this is about reducing the reliance on nationally set targets. There should be fewer of them, and more set at a local level, and they should be less focussed on internal processes and more on the goals that we all want to see as a society.
16. I was already taking these issues seriously in my last position, at the Department for Health. I wanted to know what was happening at the frontline - what service was being delivered to the public, and what the views and concerns were of the staff delivering that service, and the public experiencing it. So I spent a series of days work-shadowing staff last year, and I learnt a huge amount. I learnt about their commitment, and their dedication - to the NHS as an idea, to its values, and to delivering the best service possible to those that need it.
17. But I also learnt that they could sometimes feel alienated by the top down target setting that we have often seen; by the fact that change can feel imposed, or handed down; by the feeling that they are simply feeding information to Whitehall, without having the power to make their own decisions or to lead change or innovation; and by the feeling that they are working to a different agenda that they have not set.
18. This is a message that we are increasingly hearing from across the public services, not just health - while they welcome a clear sense of priority and vision from central government, they feel that there needs to be a better balance, with less prescription. I agree that it's time for a shift away from that top down approach.
19. But it was the right approach for the time. When we came to office in 1997, there was a backdrop of historic underinvestment in public services, unacceptable variation in quality, and a lack of clear direction. The framework we introduced was intended to address those problems.
20. The record spending levels of the last ten years have helped to address the years of underinvestment. And the PSA regime that we introduced in 1998 has played a key role in providing a sense of direction and focus; in eliminating the unacceptable variation; and in providing unprecedented transparency. They were an expression of the public's priorities that the public services needed to hear.
21. Together, investment and reform have delivered some clear benefits: like virtually eliminating waiting lists of six months or more; an increase of 13 percentage points in the number of pupils achieving five or more good GCSEs; and crime falling year on year.
22. But not surprisingly for a first attempt, we didn't get everything right. We had over 600 targets. Some were too prescriptive, and others too input-driven. That meant they were often too rigid to motivate and empower public services deliverers as much as we would have wanted. And those at the frontline increasingly felt an implied lack of trust, or confidence - especially as public services improved, and the need for us to be prescriptive to solve the immediate problems we inherited in 1997 reduced. That fed into a sense of a divide between those working in public services, and politicians.
23. Too often, PSAs were also unambitious, and failed to encourage departments to work together. And we sometimes didn't recognise that prescribing outputs at a national level could lead to unintended consequences.
24. But I'd say again that introducing PSAs in 1998 was a huge step forwards. And our approach has continued to evolve. We moved from over 600 targets in 1998, to 160 in the 2000 Spending Round, and 110 in 2004. And we've shifted towards outcome-based PSAs, measuring the results that really matter to people.
25. So the approach that we've had over the last ten years has been evolving - and it was right for its time, to address the problems that we inherited. But we have to recognise that what was right for the last decade won't be right for the next. Because even as targets have worked, and services have improved, the acceptance of them has diminished as services become more ambitious, and want to do more for their communities, with a stronger sense of local ambition.
26. And we also have to recognise that over the next decade, we'll face new and complex challenges as we strive to deliver better outcomes and better public services. The Prime Minister has made clear that to meet those challenges, we need a new relationship between citizens and Government. To achieve that, we'll first need a new relationship between Government and public service professionals.
27. This year's CSR gives us a chance to prepare Britain for the challenges ahead, and to start building those new relationships - and the priorities we set through our PSA framework will be crucial in achieving that.
28. And with 90 per cent of our existing PSAs due to end in the current CSR period, this is a real chance to redesign our approach to setting the outcomes that we're aiming for - learning the lessons of the last ten years, and making the changes needed for the next ten.
29. So alongside CSR 2007, we will introduce a new performance management framework that will have the characteristics I outlined a moment ago. I'd like to talk about each of those in turn.
30. Firstly, outward-looking. Public services should begin with the needs of citizens, and respond to the needs of citizens.
31. So instead of facing towards and reporting to Whitehall, the new framework will face outwards, responding to the needs and priorities of public services users - with bottom up accountability giving citizens and users a real say in the decisions that affect their experience of public services, and with more measurement of user satisfaction.
32. We're already seeing that in some areas - neighbourhood policing is placing local inhabitants at the heart of local priority setting, and we're piloting individual budgets in social care, greater use of parent councils in schools, and choice-based lettings in social housing, to name just a few examples.
33. That greater user engagement can improve the quality of services; help change behaviour; create greater accountability; and develop a sense of social responsibility.
34. We want those benefits to be extended - and so the CSR will require departments to set out the role of this kind of user engagement in delivering PSAs, and to summarise where and how it will be widened and deepened.
35. We also want to see clearer accountability to citizens - with departments reporting national progress against PSAs to the public in a transparent, accessible way, and with much greater provision of real time data at local level to allow service users to judge the performance of the services in their area.
36. The second key characteristic for the new PSA framework will be to make it more streamlined. In 1998, we had over 600 PSA targets. As I've said, that number has been falling - but we have to recognise that having a large number of targets can impact on local flexibility.
37. My own local PCT, Ashton, Leigh and Wigan, for example, have been aiming to introduce a pre-emptive healthcare concept, 'find and treat', for a number of years. That would allow them to tackle the local problem of under-reported chronic ill-health. They have now introduced that concept - but they told me that they were only now able to because there are no new national targets this year.
38. I know that kind of impact can be frustrating, and cause dissatisfaction - and we've seen similar examples in other public services. We've learnt from our experiences in Government that less is more - that fewer targets from the centre create the space for local innovation and priority setting.
39. So we want our PSAs to be more streamlined, and more focussed on our priorities. And this year, we will move from the 600 targets that we had in 1998, to a streamlined set of just 30 outcome-focussed PSAs - 30 key priorities for what we want to achieve in the Spending Review period.
40. And to help reduce unnecessary bureaucracy within delivery systems, we'll also be cutting the number of national level indicators by more than half, compared to the 2004 spending round.
41. By reducing the number of priorities we have to deliver, we can also make them more ambitious. We know that there are big challenges for us to face. We want to tackle those, and we want to take the big opportunities to make real improvements to our society - and to move into a new era of ambition in Britain's public services.
42. So the PSAs that we set this year will be more strategic, better focussed on the big challenges, and more ambitious in setting out the outcomes where we want to see improvement, and the ways in which we want to transform our public services and change people's lives.
43. The challenges we want to tackle, and the more ambitious outcomes we want to achieve, will naturally stretch across departmental boundaries. And so we'll need to break down institutional barriers, and be collaborative.
44. I know how frustrating it can be when we don't see that collaboration - how frustrating it was for a constituent of mine to see health and council staff arguing in her home about who was responsible for different aspects of her husband's treatment. And it's important to recognise that different services working to different aims - dancing to a different tune - can have that kind of impact.
45. So I want a change of gear in the amount of joint working that we see, and to see public servants working together towards shared goals that encourage them to work in partnership, with the 'joins' between different departments or organisations invisible to the public.
46. The recent machinery of Government changes, like the creation of the Department of Children, Schools and Families, will help. But we also need to set out PSAs that demand collaboration - because that is what the challenges that we face demand.
47. So the new PSAs will be shared, with the vast majority stretching across Whitehall boundaries. Each one will be underpinned, for the first time, by a single delivery agreement. These will set out plans for the PSA's delivery; the role of the different partners involved; and the way in which progress will be measured - ensuring that everyone has an agreed plan for delivering the PSA, and making collaboration happen.
48. As well as being collaborative, we want the new PSAs to be motivating. I know from my time work-shadowing on the frontline that public service professionals have a real drive to help people, to deliver the services that society needs - it's why they came into the job.
49. But we have to make sure that the priorities we set really reflect the end goals that frontline professionals want to deliver, and the difference they're making.
50. When I was at the Department of Health, for example, we had a target to reduce waiting lists to 18 weeks for elective treatments. That was the right objective - but it could sound arbitrary to staff, and it didn't relate clearly enough to the reasons why they entered the NHS. So we started to communicate the goal in plain English, and in a way that made it clear what effect it was having: 'end waiting, change lives.' That reflected what the professionals wanted to do - they wanted to change lives.
51. This should also be about empowering staff. I talked earlier about a top down approach being alienating, and too rigid and inflexible.
52. And I know that it can be frustrating for staff when they have targets imposed upon them, making them feel like they aren't trusted to make their own decisions.
53. So we want to see more flexibility for delivery partners to respond, locally, to community priorities - like my local PCT was trying to do, with 'find and treat'. We want greater responsiveness, so that professionals can innovate in providing personalised services, and the opportunity for staff - not just central government, or even public sector managers, to lead change and improvement.
54. That means more setting of local priorities, by staff, perhaps even at ward level. If we can create that, I think that we will see more challenging and stretching targets being set, and that staff will have a greater sense of ownership.
55. So what does this all mean? Taken together, it means placing more trust in public sector bodies and professionals - and that's the new relationship that we need between Government and those delivering public services.
56. That new relationship of trust can empower those in the public sector to respond to citizens' needs. And it can empower individual members of staff - respecting their skills and professionalism - and engage them with our shared goal of providing the best possible service.
57. That relationship means a different accountability - but it doesn't mean no accountability. And it doesn't mean a free-for-all, with no control. As public services become more personalised, we want them to be increasingly accountable to their users, rather than to Whitehall.
58. To make that happen, we'll provide better information about service performance, so that the public can see what service they are receiving. We'll also help the public to get the service they want by giving them a voice to express their needs and preferences at a local level, and by making it possible for them to move around and choose the best option if need be - as we're doing with the NHS Choices website.
59. So what we're looking for from the new PSA regime is a culture shift - the start of a new era. We need to recognise that the approach we have taken in the last ten years was right for its time, but won't be right for the next ten years.
60. Instead, we need to renew our priorities, and renew our approach to government and to public service delivery. The test will come in answering the question: 'does it feel different'? Does it open up new possibilities? I'm not naïve enough to think that we can achieve that with a few words. It will need a behaviour change, less risk aversion, and more of a permission culture, and that is what we're trying to achieve.
61. I also realise that we can only achieve all of this by working together - to build that relationship, and to respond to the challenges that we face. It won't be easy - but we've made huge progress in the last ten years, and I know that we can make more in the next ten.
62. Thank you for listening.
Ends.
