To improve public procurement – use the Trust Test
Public procurement is too often solely made on price, and not enough on true value and to account for areas...
Norman Lamb’s speech at the launch of the Tomorrow’s Business Forms Report – 25 November 2013
It is very good to be here. When I met Mark and he mentioned this launch today and that I come along, I leapt at the chance because I am a self-confessed passionate advocate of all of this work and I think it will make a real contribution.
I want first of all to pay tribute to Tomorrow’s Company and the work that you have done, for example restating director’s duties back in 2006, and championing investor stewardship leading to the Stewardship Code. This is really important work. And now this report, which is very much business-led, has value in raising awareness generally about the existence of diversity. It raises peoples’ sights about the options available to them when people start up an enterprise to get the right form for the type of business, service or task they are seeking to pursue. And then later, of course, the importance of businesses keeping their model of ownership and governance under review to ensure they continue to meet their purpose in the best possible and most rational way. Whether at start up or later the role of business advisers is critical in ensuring that the form of the business adds value. And crucially also – the importance of this report for government, whether in its role of regulator, or as the provider or purchaser of services or as the operator of a businesses. In all of these ways this report sends a very important message to government, to which we should listen and which we should take on board.
There are key people in government who really do get this. My leader Nick Clegg was a very strong supporter when I launched the Nuttall Review. I am delighted to see Graeme Nuttall here – there he is in the third row – the view of mutual ownership and how we can look to remove barriers to that particular model, one of diverse models that might exist in an economy. Nick was there supporting it very strongly. Francis Maude on the other side of the coalition, is a very strong supporter. He has strongly supported the work I have done, even though I am in another party. I had a glorious eight months as a junior minister in the Department for Business, Innovation & Skills last year, which gave me the chance to launch the Nuttall Review and the really great work that Graeme did.
But now I am in my role as a minister in the Department of Health. I was not going to let that diminish my enthusiasm for seeking to address this question of the government’s purpose and role – which I think is critically important in health care. Let me explain the point a little further. We face the most extraordinary challenge – and it is the same across the developed world – about how we maintain good quality public services, particularly for vulnerable people in our society who depend on what the state might either provide or facilitate as they have no other option.
But the model that we are used to is under extraordinary pressure. If we look at the challenges ahead of us, whether demographic change for example, you have to ask how does this model survive? How do we continue to provide excellent quality services for people who need them, given the extraordinary demographic change? For example, between now and 2030 we will see a doubling of the number of people who live to 85 or above – a doubling! We have a system already under strain. We see health costs rising as a result of an aging community and that people are living with a mix of chronic conditions for many years. 1.9 million people a day are living with three or more chronic conditions. That number is going to grow to 3 million by 2026.
So how does the existing traditional model of public service provision continue to work? It either needs bucket loads more money – and there is no great appetite amongst the public to pay a vast about of extra tax – or we have to find other ways of improving productivity and quality of service, because we know what is available does not always meet the expectations of a modern society.
So we have no alternative but to think about how we can maintain quality services. We have to be prepared to innovate and look at different models of ownership across the public sector. That can mean a simple contracting out of services in a traditional model, for example, to a Serco or whatever.
But there are more answers than Serco. For example, the role of mutuals in public service delivery – we have only just started to explore how far that can go. I have appointed Chris Ham, from The Kings Fund, to lead a diverse range of people, looking at the mutual model in health care. Can we have a mutual foundation trust hospital? How do we extract more productivity from traditional public service delivery? This report is raising awareness of businesses about the diversity that is already there, and of government about how we can strip away barriers to diversity. For example, are there tax barriers? Are there regulatory barriers that focus attention on a single model of business form? What can we do to strip away those barriers to ensure there is real diversity and therefore innovation, not just in the traditional public sector but across the wider economy?
So thank you very much – an excellent piece of work.
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