Power to Persuade symposium wrap-up

Managing for outcomes, the non-fungible value of social capital, quasi-markets, social impact bonds - last Friday's fourth annual Power to Persuade symposium at ANU's University House had it all. Here's a symposium wrap-up from UniMelb PhD candidate Sue Olney (@olney_sue).

The fourth annual Power to Persuade symposium was held in Canberra on 18 September 2015. With timing worthy of an episode of The Hollowmen or Utopia - you couldn’t make this up - policymakers, public servants, community sector workers and researchers with a stake in social policy gathered  in the nation’s capital to explore more effective ways of working together just as Australia’s fifth Prime Minister in five years was sworn in. And as our new Prime Minister pledged to lead a “government committed to freedom, the individual and the market”, the symposium’s theme was Interrogating the arrival of the private (for-profit) sector – from policy advice to policy delivery.

Power to Persuade is a dynamic forum for exchanging ideas across sectors, for questioning and challenging unwieldy systems, and for finding and addressing gaps in skills and knowledge. As Dr Kathy Landvogt, who launched the symposium with Dr Gemma Carey in 2012, explained, “we ask ourselves, where is the struggle this year? What makes us rethink what we know and what we don't know? Then we curate the expertise we think we need.”

This year’s dialogue opened with keynote addresses from economists Robert Kerr and Rod Campbell on what would happen if the community sector started acting more like the private sector. Many would say that line has been crossed with delivery of government services under contract, yet Robert argued that through shifts from managerialism to contracting to collaboration since the 1980s the community sector has maintained distinct characteristics as a service provider. He flagged that while the assets of for-profit service providers can be reallocated when they fold their tent, the primary asset of community organisations – their social capital – has no secondary market and is lost when contracts shift. Rod urged us to question the assumptions and data that underpin cost/benefit analysis and the economic modelling that shapes public policy, particularly when government engages private economic consultants to justify expenditure, and not to shy away from 'lawfare' when it is warranted.

The first panel of the day – Janine O’Flynn, Mary Crawford, Jonathan Kennedy and Sarina Fisher – examined the evolution of the for-profit sector's role in policy, from providing advice to delivering outcomes. Discussion revolved around challenges in defining outcomes, the distinction between cost and value, and whether a line should be drawn in profiting from delivering services to vulnerable citizens. As government becomes a ‘purchaser of outcomes’ and the private sector responds to the business opportunities that shift presents, tensions surface around questions of mission and values; the tendency of the for-profit sector to ‘cherry pick’ work and avoid thin markets; the emergence of mega not-for-profit providers tendering for government contracts and subcontracting smaller providers; the erosion of skill and corporate memory in the public service; and shifting of cost and risk.

At the same time the panel reminded us of the complexity and heterogeneity of the service delivery environment and cautioned against assuming that all for-profit providers exploit contracts and all not-for-profit providers work for the public good. Both collaboration and competition promise innovation but are generally constrained by tightly prescribed and managed contracts and programs. This situation is driven both by governments’ aversion to risk and their desire to keep activity focused on ministerial priorities. In wrapping up, the panel envisaged public servants of the future as skilled purchasers and regulators, drawing on a broad range of instruments and actors to deliver public services.

This led into a keynote address from Louise Sylvan on why the investment strategy of government is changing, underpinned by a fundamental question – what is the best way to deliver public services? In an environment of fiscal constraints and pressure to protect the credit rating, current strategies include transforming the market (NDIS); paying for performance (contracting and commissioning); and social impact investing. Louise argued that social impact bonds offer governments a way to spend less and diffuse the risk of policy experimentation, while recognising that they will ultimately be held responsible for decisions impacting on citizens or the budget. They also offer service providers surety and longevity of funding and scope to develop and test integrated strategies to tackle complex social problems. She stressed that this investment approach defines success clearly by working back from the desired outcome.

Louise’s address segued into the day’s second panel - Jo Barraket, Sally Cowling, Caralee McLiesh and Helen Dickinson - on the theme of 'social impact bonds and other models - a wolf in sheep's clothing?' The panel reminded us that social impact bonds are still being tested, operating on faith rather than empirical evidence of their effectiveness, with one panellist describing them as a financial novelty offering "socialisation of risk and privatisation of benefit". Under this approach there is no cost to taxpayers if the experiment fails - they pay only for successful outcomes - but for those directly affected by lack of success the model holds less appeal.

The NSW government’s foray into social impact investing with Uniting Care has produced encouraging results and robust data to inform future policy, and there was consensus that collecting clear evidence of outcomes is imperative. Sally Cowling stressed that although NSW's Newpin bond has worked well to date, in truth very few policy problems are suitable for the SIB model, as there is needs to be a strong correlation between intervention and outcomes. Questions were raised about the scalability of the model, whether other models could produce similar results, and whether this model can address the underlying structural elements of disadvantage. Time and further research will tell.

The final panel of the day - Val Braithwaite, Adrian Kay, Ken Baker and Gemma Carey - examined mission vs the market in service delivery. It was clear that the entry of for-profit providers into services traditionally delivered by not-for-profit providers 'united by ethos' impacts on language (market rather than sector, customer rather than participant), culture, social capital, the resource base (volunteers, donations, bequests) and access to services (cherry picking). The value-add of the not-for-profit sector lies in its local intelligence and networks. But where providers "bump up against each other" it is unclear whether it is due to a difference in mission, contestable funding models or rigidity in the system imposed by regulation. The panel observed that quasi-markets, while not pure or ideal markets, give citizens some choice in the services they access - but the devil is in the detail of implementation.

As promised, the symposium generated frank debate between leading thinkers in different sectors covering social impact bonds, the NDIS, co-design, co-production, the value of the community sector, the value of competition, and social change. It focused more on how the entry of the for-profit sector into that space impacts on traditional service providers than on service users or outcomes, both of which might paint a very different picture. The debate will continue. No doubt papers and presentations will be uploaded to the website soon but in the meantime you can read unfiltered commentary on the symposium on Twitter under #PTP2015, moderated on the day by Sophie Yates. Thanks and congratulations to everyone involved.

Posted by Sophie Yates.