The IPPR think tank has called for a new public service reform agenda with a focus on devolving power, connecting services & strengthening relationships. The call goes beyond Ed Miliband’s determination to ‘drive power down’ and devolve responsibilities to those who use public services.

The IPPR report argues that although public services have improved substantially in the last two decades, the use of either centralised targets or market mechanisms is unlikely to deliver the kinds of reforms needed to secure further real efficiencies in the future or tackle the more complex problems public services now have to deal with, from chronic diseases to long-term worklessness.

The report argues for a new public service reform agenda that is both more effective and is more in tune with public preferences. This new ‘relational state’ agenda would mean providing people with a continuous relationship with a trusted professional in areas like home care, maternity care, welfare to work and offender management, so that strong relationships between users and professionals can develop over time and a highly personalised approach can be taken to both designing services and tackling problems.

The reform would also involve allocating frontline workers to neighbourhoods for which they should take responsibility. This would take further the Total Place/Community Budget concepts.

It would also be important to promote a greater role for community and voluntary groups in providing public services, so that community networks are strengthened and that citizens take more responsibility for solving problems themselves

The report says that four big reforms are needed to achieve this.There would need to be a decentralization of budgets to local authorities and city regions to unlock innovation, improve responsiveness and break down silos. Greater pooling of funding would also be require so services can take a ‘whole person’ or ‘whole area’ view and more effectively tackle complex problems.

There would need to be a greater integration of professionals from across different sectors in multi-disciplinary teams and the expansion of new collaborative arrangements, such as school chains so that providers can share knowledge and learn from innovation.

The report argues that the savings that will be needed in the next Parliament are so great that what will be required is service transformation, not further small scale efficiency savings. IPPR analysis following the latest Treasury documents published in the Autumn Statement show that £18.5bn will need to be cut from department budgets between 2015/16 and 2017/18. This could mean local government and defence facing cuts of almost £5bn, the Home Office facing a cut of around £2bn and the Department for Justice cutting over £1bn.

Nick Pearce, IPPR Director, said: “Public services are struggling to cope with an increasingly complex world and will have less funding to do so in the future. The two predominant methods by which government has sought to run public services – bureaucracy and markets – assume a relatively simple world in which most problems have a small number of causes, and where standardized approaches will work in every case. New thinking across the human and natural sciences suggests that society’s outcomes are much less predictable than has been typically thought.

“To tackle problems such as how to collect the bins or reduce hospital waits, top down plans and simple market incentives can be very effective. But anti-social behaviour, chronic ill health and large numbers of young people not in education employment or training have multiple and interconnected causes that feed off one another in unpredictable ways.

“Simply contracting out a silo of provision to a private provider on a ‘payment by results’ basis will not deal effectively with these kind of problems, as we have seen with the dire record of the Work Programme at getting the sick and disabled into work.”