In 2025 public services are poised for significant reform, driven by a government eager to address longstanding issues and improve effectiveness. With the help of the MV team, John Copps picks out some areas to watch out for and looks ahead to year of reform to public services.
First a prediction: 2025 will be an important year in public services. It may not end up being a dramatic one but, if you take what the government says at something like face value, it will kick off a wave of reform that will touch virtually every part of the state and our local communities.
With the new team now in government, there is an opportunity – and appetite – to look afresh at how public services are functioning, the way they work (and don’t work) together, and what we need to change. The Prime Minister has already issued a robust challenge to public servants not to be content in the ‘tepid bath of managed decline’.
So what can we expect to see over the next 12 months?
Reform back on the agenda
After a long period of stasis, and with the treacly issues of Brexit and Covid behind us, the government has signalled that it wants to prioritise public sector reform. At the beginning of December, Cabinet Office minister Pat McFadden, kicked off what the Institute for Government has called the ‘long haul’.
In the run-up to the next Spending Review, expected in June, we can expect a slew of White Papers setting out the government’s position. Announcements are already coming thick-and-fast – on reform to employment support, the structure of local government and the NHS.
But the biggest challenge of all is cultural: creating an environment where public servants can work with service users, are committed to ‘test and learn’, and are genuinely open to outside expertise. That isn’t a quick fix, but we should expect to see progress in 2025.
Missions that mean something
Since the General Election in July, ‘missions’ have been talk of the town with the government setting out five of them to guide its direction over its term in power.
How these missions will influence the way government works remains opaque. One thing that missions do imply is cross-departmental working and collaboration across tiers of government. Through this, they have the potential to confront the tendency of public services to organise into siloes. This is good news as the challenges they face are complex and messy.
Clues to how missions will work in practice are emerging in the form of the new 'mission boards' and what appears to be the primacy of the first mission around economic growth. One thing government must avoid is slipping into ‘deliverology’, where missions simply become narrow targets that don’t genuinely shift mindsets.
Devolution by default?
Will 2025 see the start of a genuine shift of power away from the centre to local areas?
Published just before Christmas, the English Devolution White Paper set out the government’s ambitions for ‘the biggest transfer of power out of Westminster to England’s regions this century’– and make the business of governing ‘devolution by default’. The plan promises to grant greater power to regional ‘strategic authorities’, with an emphasis on the levers that will encourage economic growth. It also describes a move to end two-tier local government by ‘facilitating’ a process of reorganisation.
Will this deliver real power to the regions? The signs are mixed. On the face of it, the big winners are Mayors – a form of governance that is still finding its feet in England. Notably, there is little to suggest more local determination in the health system, the most centralised of the local public services and a crucial partner to councils. Where district councils are to be abandoned, areas must avoid becoming mired in process and politics – and risk sucking the energy and focus from genuine reform.
Place-based approaches and local areas ‘getting on with it’
Mutual Ventures’ engagement with public service leaders over the last six months has revealed a strong feeling that there is need for change in the way local services are delivered.
As MV Non-Executive Director Donna Hall has argued, the current approach based on the principles of ‘New Public Management’ is creating siloes to comply with the requirements of commissioners and regulators, marginalising the voice of local people and forcing service users to become passive recipients of support. This is not producing the outcomes we need for local people and places.
Instead, what we need is a public service environment where people are at the centre, where decisions can be made locally by those closest to communities, where incentives among organisations in a place are aligned, and where siloes between services have been broken down.
Fortunately, local authorities and their partners already have the powers to reverse these trends and implement place-based approaches. In 2025, more areas will join those that are doing things differently and liberate themselves to focus on people and communities.
Mutual Ventures' 'Radical Place Leadership' is an example of such a place-based approach to knit public services together. Pioneered in three areas across the country in 2024, it is about redesigning services around people and shifting power to communities, by building a coherent narrative about a place, breaking down the barriers between services, and working with leaders across a system.
A modest boost to local government finances in November’s Budget provides a window of opportunity for councils and their partners to explore new ways of working. It is not an opportunity to be wasted.
Integrating health and work
Nearly 2.8 million people are out of work due to long-term sickness in the UK – a number that has swelled since the pandemic and appears to be out of whack with every other developed nation.
The government has put solving this problem at the heart of its mission to achieve economic growth, acknowledging the close relationship between a healthy workforce and a strong economy.
2025 will see more investment and action in this area to ‘Get Britain Working’. Eight trailblazer areas will trial new ways of working, alongside new and existing programmes, most notably in fifteen WorkWell areas. Initiatives will seek to bring together partners – local NHS, councils, JobCentre Plus and employers – and find better ways of collaborating.
The trick to pull off here is to ensure health service and employment services work hand-in-glove. Existing support – such as that delivered within job centres – explores health as a ‘barrier to work’, but the enablers and relationships that make the link between services are almost always missing. In the NHS, the way clinicians think and behave is not geared up towards an appreciation of the importance of patients’ employment status. Both these things must change.
Prevention as the strategy in health
If there’s one word that sums up what is needed in healthcare in 2025 it is ‘prevention’. This must be about shifting investment upstream, providing more care in the community, and a concerted focus on public health. Only this will rebalance the system and take the pressure off expensive acute services.
The government has talked a good game, calling for a ‘revolution in prevention’. All well and good, but this rhetoric is very far from being new. The 2019 NHS Long Term plan called for a redistribution of resource aways from acute to primary and community care services but, instead, the proportion of the NHS budget spent on hospitals has grown.
The real test will be whether the government can do what its predecessors have failed to do. We should watch out for reform in primary care, closer integration of services at a community level through 'Neighbourhood Health Centres', action on mental health, and a greater focus on the wider determinants of health including smoking, obesity, gambling-related harm and online harm. We may not see the outcomes of change in 2025, but it can set us on the pathway towards a healthier population and a more sustainable NHS.
Children's services ‘reset’
You can be forgiven for forgetting how many times you have heard that children’s services are ‘in crisis’. Year-on-year it is eating up more of local authorities’ budgets, sees rising demand from children with special education needs, and a greater number of children being removed from their families.
At the end of 2024, the government’s policy statement Keeping Children Safe, Helping Families Thrive indicated its intention to ‘reset’ the children’s social care system, taking its cues from the recommendations of Josh MacAlister’s Independent Review of Children’s Care published under the last government.
New initiatives will focus on prevention, kinship care, reform to the private sector market, and continue efforts around pan-local authority working – including through fostering recruitment hubs and Regional Care Cooperatives. Regional working will take a further step to becoming integral to how children’s services are delivered with ambitious local authorities seeing opportunity to shape this change. We will learn more later in the year and the government has stated that it will legislate for change where needed.
In the areas of Special Educational Needs, the government knows that it needs to act as demand is pushing councils towards the brink. If no action is taken, the expiration of the statutory override in March 2026 – an accounting trick to that allows SEND-related deficits to be kept off councils' books – will reportedly leave 43% of councils at risk of issuing a section 114 notice. The Budget provided more cash to plug immediate gaps, but we await a longer-term fix.
What is being kicked into the long grass
In 2025, we should keep an eye on what won’t be done as well as what will. Most recently, the government has disappointed campaigners and practitioners by deferring its plans for adult social care. The government knows that it needs to prioritise and will be held to account at the ballot box for what it promises now. Inevitably there will be more so-called 'second term issues'.
2025 is set to be an exciting year in public services. Change is on the cards. As we noted last year, if the past decade is anything to go by, expect the unexpected. Whatever happens, we’ll be here to support our public services.
To learn more about our work and the themes in this article, contact John Copps john@mutualventures.co.uk.
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