20050111_Sharing the value

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sharing the value -

a sustainable approach to themodernisation agenda

a report bythe sustainable developmentcommission

anuary 2005

Sustainable Development Commission



Sharing the value – a sustainable approach to theModernisation Agenda

Contents Page

Executive Summary 1

1. The Proposition 3

2. The Current State of Play 6

3. The Potential for Integration and Innovation 9

4. Policy Implications 11

Sustainable Development Commission2



EXECUTIVE SUMMARY

The next phase of the public services modernizationprocess should be explicitly located within asustainable development framework. Not only willthis ‘framing’ of today’s modernization programmeshelp to deliver improved public services, but it willsimultaneously generate substantial shared value ofdifferent kinds:

1. Increased value for money (in both the short term and over the long term), with a far stronge focus on ‘invest to save’ strategies;

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2. Mutually reinforcing outcomes (in terms of economic benefits, environmental protection and

social justice), rather than crude trade-offs;

3. A deepening of the idea of increased choice for consumers, through an emphasis on personal responsibility and active citizenship;

4 A fresh app oach to local governance issues,avoiding the extremes of the ‘loca vs cen ral debate’;

5. Increased innovation and creativity in policy design and service delivery;

6. Connecting the modernisation agenda to the Governmen ’s leadership on globa action for sustainable development.

Progress towards sustainable development cannotachieve the ‘step change’ of which the Prime Ministerhas spoken without a systematic effort to connect thatagenda to the modernisation process. By the sametoken, the modernisation process will not fulfil itspotential unless implemented within a clear andcoherent organising framework that can motivateprofessionals and the general public alike. TheCommission believes that framework can only be

supplied by sustainable development.

On the choice and personalization agenda, forinstance, the balance between social entitlements andpersonal responsibilities that lies at the heart ofsustainable development can provide a critical realitycheck in today’s debate. It is vital that citizens areempowered to get involved in ‘co-producing’improved public services both as members of sharedcommunities and as individual users. As the PrimeMinister puts it: “services personal to each, and fairfor all.”

The key to this choice conundrum is stakeholderaccountability and shared responsibility – a reflexivetwo-way relationship between citizens and the

agencies which affect them (directly or indirectly)

which allows citizens to express their interests and tohold institutions to account – in return for which, thoseagencies can expect increased personal responsibilityand a readiness on the part of citizens to participate increating solutions to today’s problems.

This is just one example where a convergencebetween the public services modernization agendaand sustainable development can improve both thethinking and the delivery of both key programmes.

In short sustainable development needs better machine y, while the modernisation agenda needs a

sustainable core and a bigger public purpose than can be provided solely by prevailing views of ‘efficiency’ and ‘customer choice’. Neither programme is achieving its full potential, and we contend that neither can do so unless and until it is integrated with the other. Modernisation without sustainable development is a recipe for short-term gains but long- term waste, frustration and contradiction. Sustainable development without the leverage and resources of the modernisa ion agenda will remain marginal in most public services.

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The Commission has developed a powerfulopportunities agenda highlighting ways in which thisintegration can be realized. If the following prioritieswere put into practice over the next two or threeyears, the benefits would be enormous:

1. Ensure that the new Healthcare Standardsencourage all NHS bodies to act as ‘good corporatecitizens’, rewarding managers who use resources toimprove the health and wellbeing of staff, patientsand visitors, to enhance their local communities andlocal environment, and to reduce health inequalities.

2. Integrate best practice in sustainable constructioninto NHS capital development programmes in bothAcute and Primary Care Trusts.

3. Embed environmental quality, improvements inthe public realm, and ‘liveability’ measures at theheart of all neighbourhood regeneration and socialinclusion programmes, especially in areas of highcrime, fear of crime and anti-social behaviour.

4. Implement in full the recommendations of theSustainable Buildings Task Group, and ensure that all

new houses built in the Thames Gateway and othergrowth areas comply with the Building ResearchEstablishment’s excellent ‘rating for new homes’.




5. Further embed sustainable development in the lifeof all schools, not only in specific subjects in thecurriculum (geography, citizenship, technology), but inguidance on standards, procurement, communication

with parents and local communities, and schools’ useof resources and facilities.

6. Integrate best practice in sustainable constructionin all new public buildings and major refurbishmentprojects including pioneer ‘state-of-the-art’sustainable schools, catering systems and home-to-school travel schemes in designated Growth Areas.

7. Drive ODPM and OGC’s sustainable procurementGuidelines through all government departments, aswell as through the new Regional Centre’s forExcellence, ensuring total compatibility with the

outcomes of the Gershon Efficiency Review.

8. Prioritise Defra’s Sustainable Food ProcurementStrategy in hospitals and schools, so that hospital andschool meals become the cornerstone of nutritiousand healthy lifestyles.

9. Build understanding and capacity in local, regionaland national services through establishment of theEgan Report’s proposed National Centre for Skills inSustainable Communities, and through regional andlocal learning networks.

10. Evolve the Comprehensive PerformanceAssessment for local authorities to put sustainabledevelopment at its heart, and ensure that thisapproach is carried through consistently in Best Valueassessments, Community Strategies, Local StrategicPartnerships, Local Area Agreement and StrategicService-delivery Partnerships.




1. THE PROPOSITION

The modernisation of our public services is a very bigdeal for this Government. Massive resources and

enormous amounts of political leadership have beeninvested in driving through a variety of improvementand modernisation programmes. The modernisationagenda is both a defining essence of the New Labouradministration, and a critical driver for the improvedwellbeing of all UK citizens.

By contrast, sustainable development is not aparticularly big deal for this Government. Although itnow demands greater attention, it still receivesminimal resources and inconsistent leadership. It’streated as a tick-in-the-box job, rather than a driver ofpolitical (let alone electoral) success.

This is regrettable but not so surprising. People carepassionately about health, education, economicregeneration and crime. It’s true that they also care agreat deal about the environment, social justice, andreal quality of life in their communities (the basicconstituents of sustainable development), but as yetsustainable development itself butters few politicalparsnips.

So why should those who drive Labour’smodernisation agenda care much about sustainable

development? Simply because that modernisationprocess (and the benefits it generates) will besignificantly enhanced by taking proper account of theprinciples and practice of sustainable development.

1. The Government’s various modernisationprogrammes currently lack a coherentorganizing framework. Sustainabledevelopment provides that framework,as well as the practical tools required todeliver joined-up policy andimplementation.

2. However welcome current improvementsin service delivery may be, there is ashort-termism about many of thoseimprovements that is storing upproblems for the future. Sustainabledevelopment enables a far moreeffective balancing of the short term andthe long term, as well as a stronger focuson anticipating problems and taking earlypreventive actions.

3. However keen Government Departments

may be to secure community and citizenbuy-in to their modernisationprogrammes, there’s little evidence that

this is actually happening. Sustainabledevelopment practitioners (particularly atthe local level) have successfullypioneered the kind of engagement and

participation strategies which willsignificantly lift those modernisationprogrammes.

The purpose of this paper is therefore to advance onesimple proposition: that the next phase of themodernisation process should be explicitly locatedwithin a sustainable development framework. Notonly will this ‘framing’ of today’s modernisationprogrammes help to deliver improved public services,but it will simultaneously generate substantial sharedvalue of different kinds:

1. Increased value for money (in both theshort term and over the long term), witha far stronger focus on ‘invest to save’strategies (see page 10).

2. Mutually reinforcing outcomes (in termsof economic benefits, environmentalprotection and social justice), rather thancrude trade-offs.

3. A deepening of the idea of increasedchoice for consumers, through an

emphasis on personal responsibility andactive citizenship (see page 10).

4. A fresh approach to local governanceissues, avoiding the extremes of the‘local vs central debate.’

5. Increased innovation and creativity inpolicy design and service delivery.

6. Connecting the modernisation agenda tothe Government’s leadership on globalaction for sustainable development.

That ‘value’ will be shared between:

Taxpayers (in terms of seeing a better returnon the investments made over the long term)

Users of public services (in terms of morereliable, higher quality improvements inthose services)

Managers and staff (in terms ofimprovements in their working environments

and better relations with stakeholders)




MODERNISATION & SUSTAINABLE DEVELOPMENT

MODERNISATION PROGRAMME

INVESTMENT

INTELLECTUAL CAPITAL

POLITICAL LEADERSHIP

SD INTEGRATION TOOLSIntegrated Policy DesignInvest to Save StrategiesSustainable ProcurementCorporate CitizenshipCommunity EngagementQuality of Life IndicatorsEco-design/Eco-EfficiencySD-proofed ‘Best Value’Sustainable ConsumptionIntegrated Policy and Appraisals

SUSTAINABLE DEVELOPMENT

MODERNISATIONINITIATIVES

-INVESTMENT-INTELLECTUAL CAPITAL-POLITICAL LEADERSHIP

SUSTAINABLE MODEL

CURRENT MODEL

NHS REFORMS

EDUCATION

LOCAL GOVERNMENT

CRIME PREVENTION

CIVIL RENEWAL

CIVIL RENEWAL

CRIME PREVENTION

LOCAL GOVERNMENT

EDUCATION

NHS REFORMS

FRAMEWORK

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2. CURRENT STATE OF PLAY

2.1 The Modernisation agenda

The modernisation agenda seeks to put citizens andusers of public services – rather than providers orspecial interests – at the heart of public policy. Itembraces many ideas and programmes: customerfocus, efficiency gains, enhanced local government,accountability for professionals, application of newtechnologies and management techniques in publicservice, and ‘civic renewal’. There is a powerful‘managerial’ element, drawing on the ‘ReinventingGovernment’ ideas of the 1990s, and a broader visionthat relates to the revival of civic spirit, politicalengagement among citizens, and community

empowerment.

Notwithstanding partial and often dishonest coveragein the mainstream media, it is clear that key publicservices (particularly health and education) arestarting to improve in many parts of the country.People are beginning to enjoy the benefits of thoseimprovements, as parents, patients, local residentsand so on. Given the amount of money currentlyflowing into those modernisation programmes, itwould be surprising if that wasn’t the case. The hardquestion, therefore, is this: are the improvements

commensurate with the level of investment? It is stilltoo early to give any definitive answer on that score,but from a sustainable development perspective,there are some problematic issues that are alreadyimpinging on policymakers:

• There are growing tensions between the goalof making services more responsive toindividual ‘customers’, and that of servinglong-term collective interests

• There are problems in the use of targets andother top-down performance managementsystems to boost the efficiency of services;targets can distort behaviour, and oftenproduce a narrow ‘silo efficiency’ thatgenerates new costs and distortionselsewhere, which in turn generate increasedinefficiency in the system as a whole

• Modernisation is often associated withambitious strategies for community renewalthat do not provide long-term investmentand support for local people; the public valuesecured is not necessarily lasting value

• Of the Prime Minister’s four key goals formodernisation – national standards and

accountability, choice, flexibility anddevolution – the first has been the clear focusof the programme to date, with an emphasis

on what service delivery professionals can doin terms of value for money for theGovernment and for ‘the customer’

•

The other aspirations have been lessadequately addressed, though the focus ofthe debate has now shifted to increasedchoice. There are widespread concerns aboutthe balance between individual consumerchoice and longer-term communityentitlements, as well as about how today’schoices influence people’s capacity to choosein the future

• Modernisation sometimes comes across as amechanical process, not a values-drivencause. So can it find a wider purpose beyondbare necessity? Could sustainable

development fill that values gap?

Many of the disappointments and conflicts in themodernisation process to date stem from a lack ofcompelling strategic purpose and of systems thinkingto integrate its principal elements (the need forservices that are more efficient and responsive toconsumers, and the need for ‘civic renewal’) into thekind of governance framework that would inspireboth service providers and citizens.

Paradoxically, whilst striving to ‘join up’ different

policy silos and to foster more integrated governance,much of the modernisation process has ignoredtoday's sustainable development framework, whoseentire rationale is to reflect the interconnectionsbetween socio-economic and environmental systems,and to design and manage policies and servicedelivery accordingly.

The strategic vision for modernisation has never beenlinked explicitly to the Government’s overall vision ofsustainable development. It is quite possible toachieve “excellence” within the terms of the‘managerial’ modernisation agenda, whether centrallyor in local services, while making no net contributionto sustainable development – or even while adding tothe problems of environmental unsustainability! Thenational, regional and local ‘quality of life’ indicatorson sustainable development do not connect tosystems for resource allocation, reward andperformance appraisal in the same way that theperformance measures of modernisation do.

2.2 The sustainable development agenda

The Sustainable Development Commission’s summing-

up of the limited progress made after five years of theGovernment’s Sustainable Development Strategy ispresented in its report, ‘Shows Promise; Must Try




Harder1’. Other critiques have reached similarconclusions. The House of Commons EnvironmentalAudit Committee2 finds a patchy record ofachievement in the embedding of sustainable

development principles and practice in themainstream of departments’ work and structures.Tools for embedding sustainable development includethe Integrated Policy Appraisal and the RegulatoryImpact Assessment (now amended to include socialand environmental issues), but these are unevenlyapplied, and have little influence, as yet, on policydesign.

At the local level, observers are consistent in seeingsustainable development largely as an ‘add on’ tocore processes and targets applied to local services;there is a widespread lack of understanding of the

meaning and implementation of sustainabledevelopment, and a fundamental lack of capacitywithin much of local government to innovate forsustainable development. As evidence of the lack ofintegration, and missed opportunities that result, wecan point to key mechanisms that have yet to take fullaccount of sustainable development as an overarchingframework and source of practical policy design tools:

• Public Service Agreements include fewtargets on environment or sustainabledevelopment itself

• Government Departments devote minimalstaff and budgets to policy analysis anddelivery of sustainable development, andthose small teams are often unable to makeserious progress in embedding sustainabledevelopment principles in Departmentalpolicy making

• Departmental reporting on environmentalsustainability (and the results of policyscreening for environmental impacts) isregarded by the Environmental AuditCommittee as poorly developed

• Community Strategies and Local StrategicPartnerships show little sign so far ofmainstreaming sustainable development andin particular environmental sustainability; insome ways, this represents a retreat from theposition reached with the precursor ofCommunity Strategies, Local Agenda 21

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1 Sustainable Development Commission (2004) Shows Promise But Must Try Harder . London: SDC also available atwww.sd-commission.org.uk 2 House of Commons Environmental Audit Committee(Session 2003-2004) The Sustainable Development Strategy: Illusion or Reali y? November 2004 (HC 624-I), London: TheStationary Office

• The local government power of well-beinghas seen minimal use so far as a tool toadvance sustainable development

• While the Best Value regime has seen some

successful examples of integration ofsustainable development practice, this hasnot yet been promoted systematically by theAudit Commission

• The Comprehensive Performance Assessment (CPA) system has so far rarely takensustainable development into consideration,despite enormous potential to be a key driverfor integrating sustainable development intodesign and delivery of service improvement.We hope this will be improved upon in 2005as the Audit Commission consults onimprovements in this area

• Strategic Service-delivery Partnerships (SSPs) are relatively new in local government, butare already being used by some authorities todeliver continuous improvement in theeffectiveness of services. As yet, SSPs havenot been framed in such a way as to securethe ‘shared value’ that sustainabledevelopment can bring.

This represents a waste of public money, and amisdirection of peoples' energy and creativity.

Progress towards sustainable development cannotachieve the ‘step change’ of which the Prime Ministerhas spoken without a systematic effort to connect thatagenda to the modernisation process. By the sametoken, the modernisation process will not fulfil itspotential unless implemented within a clear andcoherent organising framework that can motivateprofessionals and the general public alike. TheCommission believes that framework can only besupplied by sustainable development, underpinned bya set of core principles which are all of directrelevance to the modernisation agenda (see Appendix1).

In short, sustainable development needs bettermachinery, while the modernisation agenda needs asustainable core and a bigger public purpose than canbe provided solely by prevailing views of ‘efficiency’and ‘customer choice’. Neither programme isachieving its full potential, and we contend thatneither can do so unless and until it is integrated withthe other. Modernisation without sustainabledevelopment is a recipe for short-term gains but long-term waste, frustration and contradiction. Sustainabledevelopment without the leverage and resources of

the modernisation agenda will remain marginal inmost public services.




2.3 Towards the next phase of modernisation

The modernisation programme has already achievedmuch. But the evidence of ‘unjoined-up’ action, over-

centralisation, and the perverse consequences ofexcessive use of targets, has stimulated a wide-ranging debate on where public service reform goesnext. A variety of concepts is under discussion ascandidates for an overall organising principle andframework for the next stage of modernisation. Forexample:• Devolution: a continuation of measures to slim

down Whitehall by devolution to the DevolvedAdministrations and the English regions, althoughthis move has been stalled by the “no” vote toan elected Regional Assembly in the North East.

• ‘New Localism’: the idea of a re-empowerment of

local government, coupled with new forms ofpublic engagement in the design, assessment anddelivery of services

• ‘Public Value’: the idea of a distinctive set ofvirtues and benefits generated by effective publicservices, offering a basis for an improved systemof evaluation and performance measurement inthe public sector

• ‘Increased Choice’: the aspiration to enablecitizens (or ‘customers’) to have more choice ofthe type and location of provision

• ‘Personalisation’: an extension of the idea of

consumer choice in public services to embrace notjust customisation for the user, but theinvolvement of the user in design, assessmentand improvement of services

• ‘Co-production’: the idea that citizens should beinvolved in the design and improvement ofservices and of solutions to community problemsrather than being treated as passive ‘customers’.

This is very fertile territory. But we argue that there isalready an organising framework available for guidingthe design of services and the engagement of users.That framework is sustainable development, as setout by the Government in its own SustainableDevelopment Strategy. This is not to rule out thebenefits of applying the concepts above. But there isno need for a new integrating framework; the realneed is to ensure that sustainable development isunderstood and embedded in public service reform, tothe benefit of both agendas ~ embedded not asanother tick-box exercise, but by way of appliedpolicy design.

On the choice and personalisation agenda, forinstance, it is argued below that the balance between

social entitlements and personal responsibilities thatlies at the heart of sustainable development couldprovide a critical reality check in a debate that all too

easily collapses in phoney either/or positioning. It isuniversally accepted that public services are morelikely to deliver what people want if they are involvedpersonally in the design and development of those

services. But if personalisation is characterized by anarrow, short-term consumerist perspective, strippedof any strong community dimension, then itscontribution to improving public services might beshort-lived.

It is critical that citizens are empowered to getinvolved in ‘co-producing’ improved public services,both as members of shared communities as well asindividual users. The personalization of public servicesmust be rooted in concepts of long-term sharedcitizenship rather than short-term consumeristindividualism. As the Prime Minister puts it: ‘services

personal to each, and fair for all’.

As a recent DEMOS pamphlet (‘Personalisation throughParticipation’)3 argues, the deliberative involvementof citizens has a vital role to play in improving publicservices in a way that is sustainable for wholecommunities over time, and in a way that one-off,narrow-focus individual choice is unlikely to achieve.The difference lies in what motivates the individual ashe/she gets involved: personalised, instant benefits,or personalised benefits plus ongoing ‘shared value’for the community over time.

This ‘time-frame’ dimension is critical to the choicedebate and sustainable development provides themost compelling ethical framework within which tohandle that dimension. ‘Ensuring a better quality oflife for everyone, now and for generations to come’(the Government’s admirably populist rendering ofthe original definition of sustainable development inthe 1987 Bruntland Report) goes to the heart of whatis missing in the choice debate: how do we get it rightfor tomorrow’s citizens as well as for today’s?

In that sense, ‘shared value’ embraces not just valueshared more equitably across this generation, butvalue shared with future generations – adding realsocial and economic value for future beneficiaries ofhealth, education and local government services, aswell as meeting the needs of people today forimproved services. Without that ethical underpinningthere is something disturbingly hollow and potentiallyvery short-lived and even self-defeating about today’smodernisation crusade.

Interestingly, very little effort has been made by thisgovernment to apply the principles of co-production to

3 DEMOS (2004) Personalisation Through Participation ,Author: Charles Leadbeater, available athttp://www.demos.co.uk/catalogue/personalisation




some of today’s most pressing environmental issues –climate change or waste minimization for instance.But if the ideal is to get citizens to become activeparticipants in healthcare or education, rather than

passive recipients of what the state offers, why shouldthat not be equally relevant to sharing responsibilityfor today’s environmental problems?

3. THE POTENTIAL FOR INTEGRATION AND INNOVATION

3.1 Critical affinities between modernisation andsustainable development There are strong affinities between the Government’sgoals for the modernisation agenda, and theprinciples and practice of sustainable development:

• the emphasis in both sustainabledevelopment practice, and in debates on‘new localism’, on new forms of publicengagement in decision-making, oninnovation for ‘deliberative’ or ‘participatory’democratic governance

• the focus in sustainable development onunderstanding whole systems, and the focusin modernisation on effective ‘joined up’government and integrated service delivery

• the emphasis in sustainable development onlong-term action for systemic change and

equity between generations, and the successin some areas of public service modernisationin shaping policy for long-term goals (as inthe focus in Sure Start and in neighbourhoodrenewal)

• a shared focus on achieving the rightoutcomes, preventive approaches in policydesign and delivery, anticipatorypolicymaking, and action to bring aboutcultural change and market transformation.

3.2 Benefits from adoption of the sustainabilityframework This suggests that the next phase of modernisation inpublic services could harness a great potential sourceof energy by becoming far better integrated withsustainable development. The Commission hasidentified the following benefits that could flow frompursuing modernisation within a sustainabledevelopment framework:

1. A preventive account of the ‘common good’Sustainable development provides a clear andaccessible framework for defining the common good,

and the performance standards to be met by publicservices. It is entirely consistent with the emphasis onpartnerships between public bodies and other

stakeholders in the search for ‘joined-up’ solutionsand shared value.It seeks to design problems out upstream rather thanhaving to cope with them later downstream. That

means putting the emphasis on preventive policy-making, ensuring that policies are geared as much toavoiding negative, knock-on consequences as toachieving a specific goal or outcome. Many of today’ssustainable development tools have a built-in‘proofing’ mechanism to prevent social exclusion,negative impacts on health, environmental damage orother avoidable externalities – investing upstream toavoid trouble down stream.

2. A better understanding of efficiencyAs an integrating framework (mandating thesimultaneous consideration of economic, social and

environmental issues), sustainable developmentpromotes a systematic approach to efficiency thatgoes well beyond the ‘silo efficiency’ provided by thetarget-setting and cost-effectiveness schemesestablished so far. The focus is on the effectiveness ofpublic services over time and across departmentalbudget boundaries:

• The need for system efficiency, not simplysilo efficiency: gains in departmental cost-efficiency can be secured all too easily at theexpense of wider systemic efficiency – as

when park maintenance budgets are slashedand subsequent neglect of public spacesencourages more crime and anti-socialbehaviour, for example

• The importance of resource efficiency:traditional concepts of efficiency must beextended to embrace resource efficiency andproductivity – rewarding producers andconsumers for consuming resources far moreeffectively and for securing desired outcomeswith ever less environmental impact andresource use

• The value of preventive investment: despitethe Government’s Invest-to-Save initiative, itis still too easy for organisations across thepublic services to assume that a reactive,short-term approach to problems will be lessexpensive than a proactive and preventiveone

• Insistence on ‘whole life costing’ and greateruse of lifecycle approaches to procurement,investment and maintenance, in order to

minimise the damage done by crude cost-benefit methods that do not take full accountof environmental impacts and other costs




during the lifetime of a product orinvestment.

3. Managing ‘trade-offs’ more intelligentlySustainable development can also provide a robust

rationale for considering the long-term alongside theshort-term, for openly recognising and dealing withrisk, and a clear pathway when policy-makers andservice providers are obliged to make ‘toughdecisions’. It does not abolish the need for trade-offsor hard choices between economic, social andenvironmental goals; there will still be winners andlosers in the re-balancing of economic, social andenvironmental factors in any decision-making process.What it does is to insist on applied innovation in policydesign so that mutually reinforcing outcomes arepursued to the fullest extent, and the need for trade-offs is reduced or eliminated if possible.

4. Avoidance of mixed messagesA fully integrated approach to sustainabledevelopment is needed to avoid inconsistency andmixed messages. At present, there is a tendency forcore sustainable development goals to be robustlystated in national policy, and then to be watereddown through inconsistency in incentives or guidancein public policy. For example, the UK Government is apioneer in setting national long-term goals for tacklingclimate change. Yet the message to consumers is notsimply ‘save energy’, but also ‘switch to cheaper

energy suppliers’. To avoid dilution and contradictionit is vital to have a set of fundamental goals (e.g.reduction in fossil fuel use and CO2

emissions, deliveryof floor targets for social inclusion and basic needs,reduction in waste volumes and maximisation ofrecycling) whose delivery is a core elementthroughout all public and private value chains.

5. A richer approach to ‘choice’Sustainable development offers new approaches tothe desire for more ‘choice’ in public services. Choiceis a useful tool in a modernisation process to helppressure complacent, provider-led institutions torespond more intelligently to increased expectations.But adopting a more ambitious, private sector-derivedmodel of increased choice would require substantialspare capacity in the public sector, would generatemore not less use of resources, would not takeenvironmental costs properly into account, and couldlead to further inequitable outcomes (by excludingthose without ‘effective demand’) in a society with analready unacceptably large gap between the worst-offand the affluent and confident.

Moreover, there is clearly a potential clash between

maximising the individual consumer’s choice and theimpact this can have on collective quality of life.Many believe that calls for more choice through some

kind of ‘personalisation agenda’ are unlikely to becompatible with securing greater ‘public value’through public services. Without people having anequal capacity to choose, increased choice may

undermine the pursuit of greater social cohesion andsocial justice.

The key to this choice conundrum is stakeholderaccountability and shared responsibility – a reflexivetwo-way relationship between citizens and theagencies which affect them (directly or indirectly)which allows citizens to express their interests and tohold institutions to account – in return for which, thoseagencies can expect increased personal responsibilityand a readiness on the part of citizens to co-create thesolutions to today’s problems. Just as service-providers need to get closer to the citizens they serve,

so the latter need to understand their role in makingthe services work better for them and for the wholecommunity and environment. This implies new formsof dialogue, accountability and cooperation betweenlocal stakeholders in services.

6. Deliberative decision-makingSustainable development requires deliberativedecision-making processes that engage stakeholdersalongside politicians and service providers. It definesa new role for the public sector in overcoming thestructural powerlessness which is today’s norm. This

goes well beyond the ‘market research’ focus ofresponsive government; it places an emphasis onresponsible choices being made and justified by keystakeholders and decision-makers.

This also requires an approach based on problem-solving, learning, engagement with citizens, and thegeneration of what we have called “shared value”benefits - savings and efficiency gains that serviceusers can share with producers, future generations,and citizens elsewhere in the world, connecting localaction to the Government’s global agenda forsustainability (climate change, internationaldevelopment aid, fair trade and security).

Sustainable development emphasises the need for‘nesting’ of different levels of governance, with ahierarchy extending from global to micro-local levels:

• global and international (for example,regulation of greenhouse gas emissions)

• inter-governmental and national (majorinfrastructure, market frameworks, taxes,levies and regulation to promote sustainableproduction)

• regional (water management, biodiversity,

integrated spatial planning)




• sub-regional and local (education, transport,waste, decentralised energy systems, socialcare, community planning, local finance etc);

• micro-level (users’ engagement in co-

production; of shared value in services, and indebating and reducing the impacts ofconsumption).

There is insufficient clarity at the moment about whatis best done at which level; vertical integration is asimportant as more effective, horizontal integration.

7. A much clearer role for local governmentSustainable development emphasises the criticalimportance of the local in governance arrangements:

• The practice of sustainable development

gives a key place to a strong ‘local state’; thelocal is the point of connection betweenlarge-scale strategies and services and theindividual and community. It is the level ofgovernance which can be both strategic andfocussed on local and neighbourhood practiceat the same time. ‘Sustainablemodernisation’ clearly requires a ‘newlocalism’

• Local government still suffers from a lack of‘democratic credibility’; filling the ‘democracygap’ is essential for sustainable development

to take root. It will help spread capacity,responsibility and accountability more widely,critical to taking informed decisions locallyand taking responsibility for the outcomes.

8. ‘All the way down’ to the micro-levelThe micro-local level comes into play within asustainable development framework because of theneed not simply to provide efficient services, but topromote active citizen and responsible consumption. Asustainable development framework sees governancefor public services going ‘all the way down’ to theusers of local systems, recognising that in key areas(transport, waste, health, schooling, food, communitysafety and the creation of clean and vibrantneighbourhoods) citizens are co-producers of bothproblems and of solutions. A sustainable developmentperspective sees schools, hospitals, public parks, thedesign of buildings and streets and green spaces, andother community services, as a focus for bringingusers into deliberation on service design, basic needsand real quality of life.

The Home Office’s civil renewal initiative is central tothis process, and has within it enormous integration

potential. Neighbourhood empowerment andcommunity engagement should both be much more

deeply embedded in the public service modernisationprocess.

9. A much clearer agenda for national government

Bringing the modernisation agenda within thepurview of sustainable development will help providegreater clarity about central government’s role. Tomake the most of this integration will require:

• Robust fiscal policies that continue to deterenvironmental ‘bads’

• Rigorous integration of sustainabledevelopment in policy design, not simply inpost-hoc evaluation of policies and projects

• Strengthening the role of DEFRA as lead forsustainable development in Whitehall, inclose association with the central policy units

• Further action to transform obstructive

Whitehall cultures and practices that stand inthe way of improved public services andsustainable development

• Assessing performance against yardsticks ofefficiency and public value that are fullyconsistent with the strategic goals andmeasures set for sustainable development

• Strong and clear guidance to regional andlocal actors on the high-level priorities to beset and the floor standards to be met, whilstacknowledging that local performance mustbe free to vary considerably within these

priorities and standards.

4. POLICY IMPLICATIONS

4.1 Cross-cutting themes

Measures to secure the kind of integration outlined inthis paper need to be taken forward both byindividual departments (see section 4.2) and acrossthe whole of government. For example:

1. Performance improvement in central and localgovernment:Measures for securing substantial synergies betweensustainable development and performanceimprovement processes include:

• Using the regular Spending Reviews to ‘lockin’ departmental contributions to sustainabledevelopment, with a much more explicit useof Public Service Agreements to driveimproved performance;

• Developing the Comprehensive PerformanceAssessment process to integrate acommitment to sustainable development

practice, and to demonstrate how the coresustainable development outcomes are beingintegrated into policy and delivery through




continuous improvement and corporate self-assessments;

• Promoting full integration of the national,regional and local quality of life indicators in

PSAs and CPA systems, so that thesemeasures become a core part of the processfor resource allocation, support andchallenge;

• Ensuring that this approach is carried throughconsistently in Best Value assessments,sustainable public procurement practice, andin community strategies and Local StrategicPartnerships;

• Building understanding and capacity in local,regional and national services throughestablishment of the Egan Report’s proposedNational Centre for Skills in Sustainable

Communities, and through regional and locallearning networks;

• Embedding ‘strategic partnering’ for localauthorities (working together with otherpublic, private, voluntary and communityorganizations) within a formal sustainabledevelopment framework;

• Developing the use of the Welsh AssemblyGovernment’s ‘integration tool’ to ensure thatall major policy processes are taken forwardfrom the start within a sustainabledevelopment framework.

2. Sustainable ProcurementAcross the public sector, there is confusion about whatis meant by ‘best value’ in public procurement, and inmany cases it is taken to mean buying at the cheapestpossible price. Sustainable development provides aframework for modernizing procurement practices toachieve best value in its widest sense; this meanslooking beyond short-term costs, and makingdecisions based on whole-life costs, including socialand environmental implications. Whole-life costingoffers the opportunity to make longer-term costsavings, whilst contributing to wider governmentagendas. It will support the goals of theGovernment’s Sustainable Consumption andProduction Framework, which stresses the need forpublic sector purchasing decisions to promotesustainable development, as well as contributing toobjectives for sustainable communities, public health,employment, transport, waste and energy.

The Efficiency Review chaired by Sir Peter Gershonannounced a drive for cutting the estimated £120billion spent each year in the public sector by 25%.The vast majority of this will be achieved through

changes in procurement practices. Nine RegionalCentres for Procurement have already been set up totake the lead in delivering these efficiency savings.

At the same time, the Government has been pushingforward an ambitious strategy for sustainableprocurement: with the Office of GovernmentCommerce issuing new Guidelines on sustainable

procurement; ODPM pressing for sustainabledevelopment targets to be embedded in the NationalProcurement Strategy for Local Government; andDefra actively promoting its Sustainable FoodProcurement strategy for the public sector. The WelshAssembly Government has also launched new (andmuch more sustainable) approach to public sectorfood procurement.4

There is already a substantial evidence basedemonstrating how sustainable procurement can drivenot just efficiency savings but improved servicedelivery and stakeholder relations, and can encourage

local enterprise, create new forms of waste reduction,and shift materials and energy usage to recyclablesand renewables, all involving lower lifetime costs.

It would be a disaster if these two strategies were notproperly integrated from the very start – whichmeans, quite simply, that all central governmentdepartments, as well as the new Regional Centres forExcellence, must be given an explicit sustainabledevelopment remit to stand at the heart of their drivefor increased efficiency. Interpreting ‘efficiency’ in abroader, longer-term context (rather than focussing

solely on cost and economies of scale) will ensure notjust reductions in public expenditure, but an array of‘shared value’ benefits over and above those savings.

We see the cross-cutting work of the Modernisationand Efficiency Team, within ODPM as central ininforming and orientating the development ofinnovative trading companies by local authorities, sothat they embrace sustainable development as sharedvalue.

4.2 Departmental Priority Areas

What then are the key areas which Governmentshould make a priority for action to bring publicservice modernisation into a sustainable developmentframework? We have identified four major areas ofpolicy design where the benefits noted in Section 2could be secured, and where Government is alreadyactive in beginning to connect up policies in wayswhich will promote sustainable development.

1. Sustainable Communities2. Individual and Public Health3. Education and Skills

4. Crime Reduction

4 Welsh Procurement Initiative Buy Now Don’t Pay Later (December 2004).




In many instances, strong evidence already exists todemonstrate why some of the policy convergencesbelow will work. We really do know by now thatmaking a priority at the local level of cycling and

walking (or even just getting out into the naturalworld!) can improve public health; that seriousinvestment in energy efficiency can save a lot ofmoney and can reduce fuel poverty; that good designof public spaces helps prevent crime, as recentresearch from the Commission on Architecture and theBuilt Environment5, has shown.

It’s practice that counts here, not theory. Butindividual government departments have beenunimaginative in drawing on the existing researchbase, and in commissioning new research to test theadvantages of seeking policy integration of this kind.

The ‘shared value’ available to them often remainsobscured, and that must now change as a matter ofurgent priority.

1. Sustainable CommunitiesThe Government’s Sustainable Communities Plan ispotentially a showcase and a laboratory for theintegration of sustainable development practice in thedesign of policy and delivery of joined-up andreformed public services. It is essential that theopportunities are seized, and that therecommendations of the Egan Report and the

Sustainable Buildings Task Group be implemented.Measures to make the most of this potential include:

• Ensuring that planning, design andaccountability in the Sustainable CommunitiesPlan are based on the principles ofsustainable development and on a core set ofsustainability outcomes

• Consistent and rigorous application of the“criteria of success” in sustainableregeneration identified by the SustainableDevelopment Commission: putting localpeople at the heart of the process; improvingthe quality of the local environment; andtaking an integrated and long term approach

• Development of Local Strategic Partnershipsin growth areas (as well as CommunityPlanning Partnerships in Scotland) as ‘secondchambers’ for public engagement andstakeholder deliberation on the sustainabledesign of settlements, buildings, spaces andservices

5 CABE Space: Policy Note: Preventing Anti-Social Behaviour in Public Spaces (November 2004) London, Also availablefromhttp://www.cabespace.org.uk/publications/index.html

• Full integration of sustainable developmentprinciples in PFI construction andmaintenance arrangements

• Establishing a variety of effective approaches

to sustainable and affordable housing,involving full community participation• Emerging proposals to set-up Local Area

Agreements (to promote improvements inthe public realm, the ‘liveability’ agenda andinter-departmental coordination at the locallevel) must have sustainable development atthe heart from the very start.

2. Individual and public healthImproving the NHS is at the top of the public serviceagenda. But the approach so far has been to focus onservice delivery issues to improve the treatment of

illness rather than to improve health and preventillness. As the Public Health White Paper6 outlinespromotion of public health needs to be at the centreof the NHS modernisation programme, to ensure thatthe aim of the health service is to avoid illnesswherever possible, and to deal with unavoidableillness more effectively.

Sustainable development provides a framework forachieving this. By putting sustainable development atthe heart of decisions, NHS Trusts can use their role aspowerful corporate citizens to improve the health and

wellbeing of staff, patients, and visitors, enhance theirlocal community and local environment, and reducehealth inequalities. Acting as a “good corporatecitizen” includes providing healthy meals in NHScanteens and on wards, developing local employmentschemes, supporting local economies by opening upprocurement contracts to local suppliers, usingrenewable energy and minimising energy use,managing waste in ways which minimise pollution,encouraging staff to walk or cycle to work, developingcar sharing schemes, and making resources availableto community groups.

Integrating sustainable development into corporateactivities in these ways will not only help to improveworking conditions, public health and wellbeing oflocal communities; it will also bring benefits to theNHS. More efficient use of energy and resources andreduced waste will help to reduce costs; healthier andhappier staff will be more productive; and improvinglocal population health will help reduce the demandfor NHS services, which will result in a more effectiveNHS in the longer term.

6 Choosing Health: making healthier choices (Public HealthWhite Paper), Department of Health, CM 6374,16 November2004




Sustainable development needs to be integrated intoall NHS capital development programmes – in bothAcute and Primary Care Trusts. The existing NHSEnvironmental Assessment Tool goes some way to

achieving this, particularly in relation to improvingenvironmental performance; but as part of themodernisation programme, the tool should bedeveloped to embrace sustainable developmentobjectives more widely, and promoted so that it isused for all building schemes.

The modernisation of incentive structures and thedevelopment of new healthcare standards providemajor opportunities to promote the links betweensustainable development and health. A criticalelement in this will be to reward health servicemanagers who are already seeking to ensure that

their Trusts’ resources are used to promote health andenhance communities. The new rating system shouldencourage Trusts to take a wider perspective andexplore what they can do for local citizens and thesurrounding community, rather than just patients.

Food and healthThe current debate over obesity shows that theGovernment is willing to ask tough questions aboutthe causes, and not just the treatment, of ill-health.This is just one area where the NHS, and the publicsector more widely, can use its purchasing power to

contribute to improved health (and therefore reducedemands on health services) and sustainabledevelopment. For example, by developingsustainable food procurement policies, public sectorcatering outlets can promote high productionstandards and local seasonal produce, reduce thenegative environmental impacts of food productionand transport, and ensure that their customers haveaccess to healthy food. School meals can become thefoundation of a nutritious diet and healthy lifestyles,as some pioneers in school catering services havealready demonstrated.

3. Education and skillsThe Department for Education and Skills has alreadystarted to think about how it can become a majorforce for an integrated approach to modernisation andsustainable development. Its SustainableDevelopment Action Plan could begin to make a realdifference. Areas for innovative action include:

• Requiring all funding, monitoring andauditing bodies for learning and skills toembed sustainability criteria in their systems;

• Further embedding sustainable development

in the life of schools, not only in specificsubjects (geography, citizenship, technology),but in guidance on standards, procurement,

communication with parents and localcommunities, and schools’ use of resourcesand facilities;

• Embedding sustainable development in the

design, siting and construction of all newschools, so that this becomes the rule ratherthan the occasional exception;

• Ensuring that the same principles and goodpractice apply to all major refurbishmentprojects, and to all regular maintenanceexpenditure on the education estate;

• Widespread promotion of systems forsustainable food procurement in the schoolmeals service, with investment in healthierfood and local sourcing;

• Promotion of sustainable developmenteducation for commerce and industry via

business schools, MBA courses, ModernApprenticeships, continuous professionaldevelopment, LSCs, the vocational trainingsystem, and the new CSR Academy;

• Further embedding sustainable developmentin FE and HE, building on the progress thathas already been made in this area;

• Development of state-of-the-art sustainableschool buildings, HE/FE buildings, cateringsystems, school grounds and home-to-schooltravel systems in the designated GrowthAreas, as a flagship initiative for the

Sustainable Communities Plan.

4. Crime reductionGovernment departments and agencies such asGroundwork have been active in addressing theconnections between crime and public disorder on theone hand, and environmental degradation and socialexclusion on the other. There is strong evidence thatcitizens are highly concerned about, and motivatedby, the quality of their local streets, parks, openspaces and badly maintained, threatening places.There are all sorts of opportunities in linking crimeprevention policy to sustainable urban design andmaintenance, and to the repopulation of publicspaces. As has already been demonstrated by somepioneering Police Authorities and Local Councils, thiscan save resources, directly raise quality of life, andgenerate public trust and confidence. Areas forinnovative action include:

• Experimentation and learning from leadingpractice in crime prevention and sustainabledesign in the Sustainable Communitiesprogramme;

• Integrating environmental quality fully in the

design and assessment of neighbourhoodregeneration and social inclusionprogrammes;




• Improving environmental quality andmaintenance of the public realm (as well asskills and job opportunities linked to these) asa priority in areas of high crime, fear of crime

and anti-social behaviour.




APPENDIX A

The SDC's Principles for Sustainable Development

1. Putting sustainable development at the centre Sustainable development should be the organisingprinciple of all democratic societies, underpinning allother goals, policies and processes. It provides aframework for integrating economic, social andenvironmental concern over time, not through crudetrade-offs, but through the pursuit of mutuallyreinforcing benefits. It promotes good governance,healthy living, innovation, life-long learning and allforms of economic growth which secure the naturalcapital upon which we depend. It reinforces socialharmony and seeks to secure each individual'sprospects of leading a fulfilling life.

2. Valuing nature We are and always will be part of Nature, embeddedin the natural world, and totally dependent for ourown economic and social wellbeing on the resourcesand systems that sustain life on Earth. These systemshave limits, which we breach at our peril. Alleconomic activity must be constrained within thoselimits. We have an inescapable moral responsibility topass on to future generations a healthy and diverseenvironment, and critical natural capital unimpairedby economic development. Even as we learn to

manage our use of the natural world more efficiently,so we must affirm those individual beliefs and beliefsystems which revere Nature for its intrinsic value,regardless of its economic and aesthetic value tohumankind.

3. Fair shares Sustainable economic development means “fairshares for all”, ensuring that people’s basic needs areproperly met across the world, whilst securingconstant improvements in the quality of peoples’ livesthrough efficient, inclusive economies. “Efficient”simply means generating as much economic value aspossible from the lowest possible throughput of rawmaterials and energy. “Inclusive” means securing highlevels of paid, high quality employment, withinternationally recognised labour rights and fair tradeprinciples vigorously defended, whilst properlyacknowledging the value to our wellbeing of unpaidfamily work, caring, parenting, volunteering and otherinformal livelihoods. Once basic needs are met, thegoal is to achieve the highest quality of life forindividuals and communities, within the Earth’scarrying capacity, though transparent, properly-regulated markets which promote both social equity

and personal prosperity.

4. Polluter pays Sustainable development requires that we makeexplicit the costs of pollution and inefficient resourceuse, and reflect those in the prices we pay for all

products and services, recycling the revenues fromhigher prices to drive the sustainability revolution thatis now so urgently needed, and compensating thosewhose environments have been damaged. In pursuitof environmental justice, no part of society should bedisproportionately impacted by environmentalpollution or blight, and all people should have thesame right to pure water, clean air, nutritious foodand other key attributes of a healthy, life-sustainingenvironment.

5. Good governance There is no one blue-print for delivering Sustainable

development. It requires different strategies indifferent societies. But all strategies will depend oneffective, participative systems of governance andinstitutions, engaging the interest, creativity andenergy of all citizens. We must therefore celebratediversity, practice tolerance and respect. However,good governance is a two-way process. We should alltake responsibility for promoting sustainability in ourown lives and for engaging with others to securemore sustainable outcomes in society.

6. Adopting a precautionary approach

Scientists, innovators and wealth creators have acrucial part to play in creating genuinely sustainableeconomic progress. But human ingenuity andtechnological power is now so great that we arecapable of causing serious damage to theenvironment or to peoples’ health throughunsustainable development that pays insufficientregard to wider impacts. Society needs to ensure thatthere is full evaluation of potentially damagingactivities so as to avoid or minimise risks. Where thereare threats of serious or irreversible damage to theenvironment or human health, the lack of fullscientific certainty should not be used as a reason todelay taking cost-effective action to prevent orminimise such damage.




APPENDIX B

The Commission is extremely grateful to GabrielChanan (of the Community Development Foundation)

who gave us such a helpful steer on things at the startof this process, and to Ian Christie (Surrey CountyCouncil) and Martin Stott (Warwickshire CountyCouncil), who made a huge contribution to the nextdraft.

We are also very grateful to all the contributors whoprovided us with a series of challenging and inspiring‘provocations’ to stimulate the Commissions collectivethinking in this in this area.

Ultimately, however, this report is the work of theSustainable Development Commission as a whole,

which is made up of the following individuals:

Jonathon Porritt (Chairman)

Rod AspinwallBernard BulkinCllr Maureen ChildRita CliftonLindsey ColbourneAnna CooteVal EllisTim Jackson

Alan KnightWalter MenziesTim 0’RiordanDerek OsbornAnne PowerHugh RavenRebecca WillisJess Worth

20050111_Sharing the value

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