Letter: Four formulae for public sector performance

From Professor Eric Caines

Sir: I much enjoyed Hamish McRae's perceptive and pointed article on the need to remodel the public services (7 July). I particularly agree with him on the need to find ways of continuing to improve performance where services are being directly provided by the public sector, in which respect he might have pointed out that the great flaw in the Labour Party's recently published proposals for the NHS is the jettisoning of all those parts of the 1991 reform package which were designed to introduce into the system pressures for improved performance.

The principal ones, against all of which the Labour Party seems to be setting its face, were GP fundholding, the ownership of capital assets by Trusts, a large degree of self-governance by Trusts and local pay. What linked all these was the understanding that giving local public servants direct personal responsibility for obtaining better value for money and for improving services is much more likely to succeed than diffusing responsibility between the different levels of a management hierarchy. The Labour Party has clearly not yet learned this lesson and proposes once again to replace personal responsibility with bureaucracy.

The distinction that Hamish McRae drew, however, between services needing stimulus for improved performance and those involved with recycling money, which, he argues quite rightly, might be better located outside the state sector, is too clear cut. Why should not those providing services also be moved out of the public sector? Why should not public money be used to buy private services if these are better than the public sector itself can provide? This is surely one of the ways in which the impediments to change which Mr McRae identifies can be overcome.

Yours faithfully,

Eric Caines

Brasted,

Kent

10 July