CONTRACTING FOR CHANGE

Contracts in health, social care and other local government services

Oxford University Press 228 pages pounds32.50

The first named of the co-authors of this volume died, as many readers will know, before the book was completed. The unanimous decision of the others that Kieron Walsh's name should appear first is described in the preface as 'not merely a sentimental gesture', but as a reflection of the fact that Kieron, who was professor of public sector management at Birmingham University, had been 'the main driving force in the enterprise'. This excellent book is an appropriate tribute to that legacy.

Contracts have become a central fact of life in public services, and this book explores the different purposes to which contracts have been put in the varied fields of compulsory competitive tendering, the NHS, and social care.

So familiar is the language and culture of contracts that it is easy to forget - as the authors remind us - that 'what has been attempted in the UK over the past two decades is nothing less than a wholesale transformation of public services, involving radical organisational and cultural change'.

The objective of the analysis is not to provide a systematic evaluation of the introduction of contracting to public services, but rather to examine the 'strategies adopted by organisations to cope with change; the new patterns of relationship and cultural shifts that have developed, and the nature of the processes that have been introduced'.

There are both similarities and differences between the three sectors which are scrutinised. While the experience with the NHS market can be seen as one characterised largely by internal quasi-contracts, local government services are typified by the strong enforcement of a contract-based 'trading regime'. The social care market comes somewhere between these two extremes and features a combination of external and enforceable contracts alongside internal quasi-contracts.

The operation of markets in the public sector is explored through 12 case studies (four in each of the three service areas), which were undertaken as part of the Economic and Social Research Council's contracts and competition research programme.

The analysis highlights how the contracting process reflects not only the driving forces of efficiency and value-for-money concerns, but also the 'expression of political necessities'. It is this influence of other variables which results in markets which in many respects have become hybrids: 'Often they are incomplete, leaving more local discretion than those who originally designed them intended.' While the specific environments for each of the three sectors were varied, they all shared the experience of undergoing rapid change, which the authors observe created the 'consequent risk of instability and unpredictable consequences'.

Both health and social care arguably differ in significant respects from the other contracting area of local government services. Specifically, the last do not share the important characteristics of a 'value element', or rationing concerns. One major consequence of this difference is that the specification and 'marketisation' of these services is considerably easier to achieve than it is in those other areas in which political, clinical and other variables provide powerful constraints.

This analysis provides a detailed and incisive explanation of the various states of market and contract development in these public services. Additional insight is provided by reflections on the international experience of contracting in seven countries which was shared at an international seminar also supported by the ESRC. The contract revolution has not been unique to the UK, although the various forms it has taken elsewhere underline the absence of a 'standard' or pure model.

Ultimately, the most important question is probably whether markets in general, and contracts in particular, work. The authors conclude that 'the jury is still out' on the question of whether 'a simple market-driven approach will always (or even usually) meet the wide range of different objectives and interests that reforms might be expected to meet'.

However, they suggest that what matters is how to achieve and maintain 'the appropriate balance between regulation and discretion; trust and control; decentralisation and fragmentation; user choice and collective gain'.

Both central and local actors engaged in trying to secure this fine balance would be well advised to begin by absorbing the key messages and insights offered in this volume.

MELANIE HENWOOD

Visiting fellow at the Nuffield Institute for Health, Community Care Division.