Public value: background review

By Tobias Phibbs

10th May 2019

The concept of public value provides a rich and radical account of what public policy should be aiming for.

> 35 minute read <


Public value — background review
Understanding public value
Public value in theory
Public value in practice
Public Value Framework
Public Value
Mapping resource and value flows
2a. Mapping the whole resource: financial and social
2b. Mapping vertically: supply/value chains
Public value in practice
3a. Public procurement
3b. Regional economic institutions
3c. Asset-based community development
3d. Collaboration with local business
Breaking silos: local councils and community entrepreneurs
4a. Devolution
4b. Community leaders and voluntary groups

— — — — —

Understanding public value

Public value in theory

The concept of public value dates back over two decades to Harvard economist Mark Moore’s case for a change in the role of public bodies. He argued that they should move away from being vehicles for the bureaucratic enacting of a legislative mandate, and towards a wider social role.[1] Some of the subsequent definitions contradict one another, others are so nebulous as to add little to the conversation, while others still are of little relevance to the Commission’s work. We should not be beholden to past definitions but they nevertheless provide useful reference points by which we can situate our work.

In the UK the first major attempt to theorise public value came in 2002 with the Cabinet Office publication of Creating Public Value. It argued public value consists of the quality of the service, outcomes such as improvements in public health, and the building of public trust in institutions.[2] In 2004 BBC followed this up with Building Public Value, which outlined a different tripartite definition of public value.[3] Firstly, it consists of the benefit to the individual consumer, measured by willingness to pay, analysis of consumer demand, and conjoint analysis (surveys of what components of a service or product consumers value). Secondly, it consists of the strengthening of people’s capacity as active and informed citizens. The third component is the net economic benefit of a service — how it contributes to the growth of other sectors.

This was further developed in 2009 by economist Diane Coyle and Christopher Woolard for the BBC in 2010 in Public Value in Practice, a tool which the BBC still uses to measure the public value of its services. They argue that, “[t]he use of public funds makes it necessary to explain the value of an enterprise in terms that are satisfactory to the community as a whole, and not just to those who benefit from the publicly-subsidised services.”[4] They survey a host of other factors that can contribute to a definition of public value, including ecological goods and stimulating citizen participation in democracy.[5]

These definitions are specific to the role of public bodies in general and the BBC in particular. They focus on measuring the public impact of public organisations rather than assessing the public value of a sector, or the whole resource that flows through a given area. Despite their limitations these earlier definitions have lessons for us as we map the public value of food and farming. For example, they discourage economistic thinking which measures only productivity, growth and monetary value. They also show that for public value to have meaning, it must have its legitimacy conferred upon it by the public.

The Barber Review, published in 2017, extends the idea of public value from the public body to public spending. It introduces a Public Value Framework for the Treasury to assess the public value of spending programmes through judging four ‘pillars’: the clarity and ambitiousness of a given goal, as well as the progress that has been made towards it; how effective the programme is at managing inputs (forecasting, benchmarking, etc.); the level of citizen engagement (how legitimate it is seen to be as a use of taxpayer money, the level of user participation, and engagement from key stakeholders); and the extent to which it develops system capacity as a whole (increasing levels of innovation, workforce capacity, work across organisational boundaries, etc.).[6] But the Barber Review has its limits. It is confined to assessing government decision-making and its overwhelming focus is on improving productivity, at the expense of wider social goals.

Public value in practice

The Labor government of South Australia implemented a public value approach throughout government towards the end of its time in government (2002–2018).[7] It has been described, including by Mark Moore, as the most comprehensive attempt to put the ideas of public value into practice. This involved all Cabinet submissions providing a: “summary of the intended public value to be delivered and the costs associated with the proposal. Among other things, the account required that consideration be given to intended outcomes, potential other positive and negative outcomes, implications for client satisfaction, and how the proposal would advance justice and fairness, both at the individual and the community level.” Then, in addition to allaying practical and budgetary concerns, submissions had to detail “the legitimacy and current support enjoyed by the proposal, the formal approvals it had to date, and the additional support it would need to accrue from the stakeholders and clients during the development process.”

There is little detail about the practical outcomes of this process, partly because it was only implemented in full in early 2017. While the process seems to have been useful and demonstrates the broad applicability of the framework across departments, it is public value reduced to a form of public sector managerialism. Applied to food, farming and the countryside it would not be an alternative to a public goods approach but a way of ensuring government departments work towards those public goods. As outlined above, our approach will be more radical in methodology and — correspondingly — outcomes.

The Wellbeing of Future Generations (Wales) Act 2015 extends a framework for considering wider social outcomes to all public bodies, including local authorities, health boards and Natural Resources Wales. It provides an overarching framework for these public bodies to consider public value (or what it calls wellbeing).[8] There are seven well-being goals (a prosperous Wales, a resilient Wales, a healthier Wales, a more equal Wales, a Wales of cohesive communities, a Wales of vibrant culture and thriving Welsh language, and a globally responsible Wales) and each public body has a duty to carry out ‘sustainable development’ work, setting objectives to maximise those goals and taking reasonable steps to achieve those objectives. A Future Generations Commissioner is tasked with reviewing decisions of public bodies and can issue recommendations where she feels they do not meet the framework for wellbeing.

It is not clear whether this amounts to a box-ticking exercise or whether it is having a significant impact on policy-making in Wales. The Commissioner, as well as the Auditor General for Wales, both admit that progress has been slow to begin with and that “no one organisation is fully embracing the Act.”[9] Partly this may be because public bodies have not had the time to incorporate the changes the Act requires, and partly it may be because the Act is relatively toothless — the Commissioner has no direct powers of enforcement beyond ‘name and shame’ powers.[10] Regardless, as a Framework it provides a starting point for thinking about how to maximise public value and is being discussed beyond Wales and the United Kingdom.

The New Zealand Treasury developed the Living Standards Framework, a way of measuring “a wider definition of success for our country, one that incorporates the health of our finances, natural resources, people, and communities.”[11] It identifies four resources — natural capital, social capital, human capital and financial and physical capital — that underpin wellbeing, and 12 domains that constitute wellbeing: civic engagement and governance, cultural identity, environment, health, housing, knowledge and skills, income and consumption, jobs and earnings, safety, social connections, subjective wellbeing and time use (ie free time).[12] These are subject to international comparisons, data on demographic discrepancies and comparisons over time.

The Framework is solely about measurement, not about decision-making, and the government acknowledges it requires further development. To that end the new government will be delivering the first ‘Wellbeing Budget’ in 2019, an attempt to integrate the more heterodox understanding of economic success into public policy and decision-making. In announcing the new budget New Zealand prime minister Jacinda Ardern cited the Future Generations Act discussed above. During the process of budget formation proposed initiatives will be subject to assessments of their expected impact on overall wellbeing and the final budget will be an attempt to maximise it. The actual wellbeing impact of the budget will then be assessed and the findings will feed into the budget formation process for the following year.[13]

This attempt to get public bodies thinking about something akin to public value is broader in scope than similar, more managerialist attempts. Its theoretical lineage can be charted back to capitals models, of which there have been several iterations identifying between four and seven ‘capitals’ (cultural, social, natural, financial, physical, etc.) which provide the basis for economic success broadly construed.[14]

The Commission will build on the theoretical and practical work outlined above to develop a wider understanding of public value, situated within the context of ideas like doughnut economics, capitals models, planetary boundaries and asset based community development. By using public value rather than public goods we will avoid technical discussions about what constitute non-excludable and non-rival goods.

The distinction between the concept of public value and the practical mechanism of the Public Value Framework has at times been muddy. The two exist in conjunction, with the latter designed to enable the former, which then feeds back into the latter, but to avoid tautology they should be considered distinct. The Public Value Framework is used for assessing the extent to which a given programme/investment/sector, etc. delivers public value. In making its assessment it includes the role of private and third sector investment as well as social capital. Public value consists of what the public values (including a citizen engagement aspect) and what adds value to the public sphere (this aspect resembles an enhanced public goods approach in scope and includes social, environmental, health, etc. goods as well as financial gain — see below for more on its definition).

Public Value Framework

The outline of a framework for assessing public value has already been laid out in the Barber Review and elsewhere. It is not for the Commission to define the exact parameters of a future framework and its metrics of adjudication. What metric, for example, could weigh up the relative value of getting a group of local farmers together for a sandwich to combat loneliness versus species conservation? Or to pick a more local and contentious example, how to weigh up the downsides of grouse shooting to animal welfare and public access to the countryside, with its economic benefits and its role in the conservation of animals (e.g. curlews) and plants (e.g. heather). These are important questions but not ones for the Commission to answer.

However, there are several important ways in which we will expand on existing frameworks. We propose strengthening its democratic and citizen engagement aspects and expanding the scope of the framework so that it is used to assess the public value impact not just of specific government projects but of resource flows (including social capital, private and third sector money, as well as direct public funding) across places and supply chains. We also propose it relies on more robust models for forecasting outcomes than are usually applied to public projects.

Strengthened citizen engagement

As our bike tour demonstrated, people across the countryside feel disconnected from the decisions which affect their lives. Citizen engagement is one of the four pillars of the Barber Review. It has three components: public/taxpayer legitimacy — an awareness of public opinion and a strategy to improve public support; user experience and participation — understanding how engaged citizens will be in the service; and engagement with influential stakeholders.[15] This framework struggles to get beyond a new public management (discussed below) approach to statecraft and public consultation. None of the components of citizen engagement would by themselves rectify the feelings of powerlessness people feel; together they have the potential to be a desiccated substitution for meaningful citizen involvement and power. An enhanced framework could specify the need for substantive processes of citizen engagement in both form and content, which allow local people to shape processes from inception to completion.

An expanded scope

The Public Value Framework emerged out of managerialist discussions about public body decision-making. It introduced a component of public legitimacy and engagement to decision-making, but it remained confined in scope to the functioning of government departments. It had little to say about how value is created and lost, and what meaningful public engagement might be beyond consumer consultations.

An expanded framework would measure all resource flows within food, farming and the countryside to give an accurate picture of where public value is created and lost. It would measure this vertically across supply chains, horizontally across place, and diagonally across digital and material infrastructure systems. It would then be able to propose how best to align these flows — through public projects and money but also through co-creating and co-shaping markets and supply chains and coordinating non-monetised social resources — to deliver on our objective: a safe, secure, inclusive food and farming system for the UK, a flourishing rural economy and a sustainable and accessible countryside.

Forecasting for public value

The Public Value Framework will be used to determine how best to coordinate resources to maximise public value. Some of this work will inevitably involve government, public bodies and the private sector weighing up the public value benefits of competing large-scale projects and deciding which to invest in. But costs and benefits of major projects tend to be wildly inaccurate, with costs understated and benefits overstated. What’s more, there is a significant standard deviation in the degree of proposals’ inaccuracy, so decision makers cannot simply design a formula for calculating actual costs and benefits. Any future framework, therefore, will have to take care to avoid basing its decisions on what will provide public value on faulty forecasts.

Oxford University economic geographer Bent Flyvbjerg has argued that there is an inverse correlation between the likelihood of a major infrastructure project being pursued and its quality.[16] Savvy promoters are able to package their proposals presentably and win contracts, overestimating benefits and underestimating costs. Taking transport infrastructure projects as an example, he finds that nine out of 10 projects have costs that overrun. This overrun is 45 per cent, 34 per cent and 20 per cent for rail, bridge and tunnels, and road projects respectively. What’s more, these “cost estimates have not improved over time” despite improvements in modelling and forecasting tools.[17]

The cause of this systematic misevaluation of costs is primarily political-economic; “competition between projects and authorities create political and organisational pressures that in turn create an incentive structure that makes it rational for project promoters to emphasise benefits and de-emphasise costs and risks.” Private consultancies specialise in the development of such strategically misrepresentative proposals, enabled by managers made receptive by optimism bias. But government too plays a role in incentivising over-optimistic proposals by providing a sovereign guarantee that enables private investors to invest free of risk and without conducting their own due diligence. A polluter pays principle ought to be introduced whereby forecasters should share the costs arising from misrepresentation and bias, and government should limit their sovereign guarantee.[18]

But the long-term solution lies, according to Flyvbjerg and before him Daniel Kahneman, with moving from ‘insider view’ to ‘outsider view’ models of forecasting. The insider view approach is to “focus on the project itself and its details, to bring to bear what one knows about it, paying special attention to its unique or unusual features, trying to predict the events that will influence its future.”[19] The outsider view (also known as reference class forecasting), by contrast, first identifies the class of past projects which the proposal belongs to. It then draws on empirical data on the outcomes produced from the class of previous similar projects to create a statistical distribution of likely outcomes. Finally it looks at the specifics of the proposed project “with the reference class distribution, in order to establish the most likely outcome for the specific project.”[20] This model, even when very little attention is paid to the specifics of the proposal itself, has been shown to be substantially more accurate than an insider view model.[21]

He concludes that until changes are made in accountability and incentive structures in bidding and forecasting processes, “decision-makers, investors and voters […] should not trust the budgets, patronage forecasts, and cost-benefit analyses produced by promoters of major infrastructure projects. Independent studies should be carried out and […] such studies should be strong on empirically based risk assessment.”[22] He goes on to suggest, following Taleb, that “some forecasts are so grossly misrepresented that we need to consider not only firing the forecasters but suing them, too — perhaps even having a few serve time.” His work has recently been cited in relation to HS2 and the Oxford-Milton Keynes-Cambridge Arc, both of which have significantly exceeded their initial projected costs.[23]

To accurately calculate public value, therefore, a PVF will have to be sceptical of the claims made by lobbyists for their specific proposals and instead lean on outsider view modelling.

Public Value

Our reference points

There are many reference points, ranging from the local to the global, that contribute towards a rich definition of public value. This non-exhaustive list works outwards from the local.

Asset based community development / social capital

Asset based approaches start with the assets that already exist in a community in its individuals, associations and institutions. They then seek to unlock these assets to deliver what might be called public value. This is contrasted with needs-based approaches that begin with a catalogue of a community’s needs and look for top-down solutions.[24] The concept of asset based community development (ABCD) is discussed in more detail in chapter 3c.

The relational state

New public management, a system for service delivery developed in the 1980s and fully embraced across government under New Labour, forged a form of statecraft which sought to emulate the private sector and recast citizens as consumers. Targets, consumer choice and centralising power with senior executives were the order of the day.[25] This approach has been much criticised for its transactional approach to service delivery.

Hilary Cottam, for example, argues for a relational approach to service delivery, in particular welfare, and has been putting her ideas into practice with her organisation Participle.[26] Like ABCD it begins with people’s capabilities, asking them about the lives they want to lead with others rather than just their individual needs. Its relevance to public value lies in its broad idea of what constitutes good outcomes. Service delivery should be aimed not just at the alleviation of an individual’s negative symptoms but at individuals embedded in flourishing families, neighbourhoods and communities leading healthy and meaningful lives.[27]

Co-creating markets

Mariana Mazzucato argues that we should move from talking about government intervention in markets to government co-creating markets with the private sector to deliver public value. It is not just that markets sometimes require adjustment if misfiring, but that we can actively shape the market rather than simply correcting its failures. If we took this approach, we could think about how government might want to recreate markets, supply chains and infrastructure systems for some food commodities to deliver public value.

Triple bottom line

The triple bottom line framework encourages companies to consider their long-term viability and look beyond short-term profit.[28] Social and environmental/ecological bottom lines are added to the financial bottom line. Again, it encourages a conception of public value that goes beyond economic gain and takes into account the human and environmental toll of certain business practices. Despite some success in the Netherlands and elsewhere in getting organisations to adopt the framework, its overall success has been limited and its inventor John Elkington has now ‘withdrawn’ the model, arguing it has not achieved system change.[29]

Capitals models

The capitals models look at the bases upon which organisations (businesses, governments, etc.) produce commodities, deliver services, etc. There have been multiple models identifying different forms of capital, but they are all variants of natural capital, human capital, social capital, manufactured capital and financial capital. These forms of capital interact with one another and organisations are encouraged to consider the way in which each one of them — not just financial capital — are prerequisites of success.[30]

Planetary boundaries

As the Anthropocene ushers in the end of the Holocene and human behaviour transforms the earth, scientists have studied the absolute planetary boundaries within which humans can continue to live and thrive.[31] These nine boundaries include things like climate change and ozone depletion.[32] The aim is to identify a ‘safe operating zone’ for humanity and encourage business, governments and international actors to act to keep within these boundaries.

Doughnut economics

Kate Raworth’s doughnut economics brings together the planetary boundaries model with a set of internationally agreed minimum social standards/necessities: water, food, energy, health, education, income and work, peace and justice, political voice, social equity, gender equality, housing, and networks. The former represent the ‘ecological ceiling’ within which we must live for the safety of the planet and our place in it; the latter the ‘social foundation’ required for humans to live safe and just lives. Doughnut economics thereby offers a model for how to create a framework for public value that stretches from the local (e.g. our need for networks) to the global (e.g. reducing ocean acidification).

Our definition

How to bring together a definition of public value which includes everything from ABCD to planetary boundaries that ensure Earth’s continued resilience? Doughnut economics offers the most comprehensive model, with everything from political voice (a progression from the ‘what the public values’/citizen engagement model in earlier public value work) and social networks to planetary boundaries included within it. As such it is the most useful starting point for developing the broad conception of public value introduced in the progress report. Then there are other forms of value we might add, such as encouraging beauty[33] and the distinctiveness of place.[34][35]

— — — — —

Mapping resource and value flows

2a. Mapping the whole resource: financial and social

A non-exhaustive map of the whole resource would have to include “current CAP payments[,] tax reliefs, for example on fuel, inheritance and food processing factories, funding for research and innovation, investments in community regeneration, Section 106 payments, tax breaks where public income is forgone, public procurement of food, timber and energy, renewable energy incentives, national and local spending on basic services such as healthcare, transport, education and housing, and local government procurement of food.”[36]

The questions a whole resource approach to mapping public value asks are: How and where do these sources of funding replicate one another? Where do they incentivise conflicting objectives? Are there place-based inequalities in how funds are distributed? And how can they be better coordinated and aligned?

To answer these questions, the 2010 government Total Place initiative piloted a strategy in 13 areas to review all pots of public funding and eliminate unnecessary duplication.[37] The aim was to use public assets as a “local collective resource, rather than that of individual organisations and departments.”[38] The figures were calculated on a “fairly straightforward spreadsheet which listed all of the various funding and delivery agencies who appeared in a place.”[39] Unfortunately it was limited to public funding and so does not encapsulate the more holistic approach that we are aiming to take, taking in third sector funding, public procurement and private investment in addition to direct public funding. Nevertheless, a review of the programme is suggestive for how we might approach calculating the whole resource in a given area. The project was discontinued later in 2010 with the election of a new government, and so any material gains from the pilots are difficult to calculate. But it revealed some strengths as well as some pitfalls to be avoided. The places engaged generally found the process beneficial, encouraging new ways of thinking and working together cross-department. At times attempting to simplify how things work amounted to a cut in services, however. In Kent they created a single telephone number and web portal for all local government services. However, an audit revealed that the results failed to improve efficiency and improve services.[40]

The Commission is leading new, partial attempts to map resources in Cumbria and North Devon. The University of Cumbria has mapped all the resources within the National Park area in Cumbria to support transitions to new forms of farming.

Not all of the whole resource is so easily quantifiable, however. The public value framework encourages us to consider the role of social capital in the countryside and the food and farming sector. It is both a contributory factor to and an element of public value — ie it is a part of the whole resource that creates public value through its role propping up the rural economy and rural communities, and it is in itself a form of public value which the whole resource should be mobilised to maximise.

It does not sit in isolation but instead has a reciprocal relationship with the monetary economy. Infrastructure spending, for example, has a knock-on impact on social capital which in turn has a knock-on impact on the monetary economy. For example, the disastrous Beeching Axe gutted rural rail infrastructure in the 1960s and the early 70s and, according to 2017 LSE research, led to “population decline, relative decline in the proportion of skilled workers, and declines in the proportion of young people in affected areas,” which continues to this day.[41] Now it is the turn of rural bus services to close, with £99m of cuts since 2010/2011. Closing down bus routes is likely to make it harder to retain young people and keep new businesses afloat, with all the social and economic consequences that entails. But an Age UK report suggests that the cuts to bus routes are having repercussions which resist traditional measurement too. Older people, for example, have been cut off from attending church services, visiting the local GP and, perhaps most important of all, they have lost the meeting point where they would usually say hello to and catch up with old friends — the quotidian routines which give shape and succour to daily life.[42] When we consider public value there must be a mechanism for capturing these non-economic consequences of decision-making.

There is a positive side to this insight, though. Social capital — that which has not been depleted — props up the rural economy. Some of it is involved directly in the supply chains — like farmers sharing equipment or clearing the roads of snow — while other aspects are harder to capture but just as important, like the role of the experienced farmer acting as a depository of wisdom for new entrants, or the role of community wellbeing in increasing productivity. By mapping these forms of social capital we can build a more realistic picture of the whole resource in a rural area, and the way in which it can be better mobilised to deliver public value. Such a map will necessarily be crude; things like social trust and friendship, the building blocks of the social processes which prop up the formal economy, resist easy quantification.

2b. Mapping vertically: supply/value chains

Another approach to mapping the whole resource is to examine the life cycle of a commodity and unpick the strands of ownership and prices operating throughout the supply chain. Michal Pollan’s The Omnivore Dilemma does this with corn.[43] He tells the story of corn from seed to plate, looking at who profits and who loses — and how corn has come to dominate the US market so thoroughly. This method is integrated (implicitly) within a wider public value approach; it not only records where monetary value is added and depleted, but also how things like health outcomes are added or depleted. In adding certain processes or ingredients to a commodity, financial value may be generated but at a cost to the environment, to health outcomes and so, eventually, to the exchequer. Or, to use the example from the progress report, there is “the cost to water companies of mitigating the chemical burden in water; with agri-chemicals and diffuse pollution entering our water at one end of the food chain, to the pharmaceuticals needed to treat illnesses attributed to our modern lifestyles, at the other.”

A public value lens would explore ways to maximise public value through the supply chain. This might include things like:

  • Shortening the supply chain. Farmdrop, for example, take this to the extreme, skipping out retailers altogether and delivering food fresh from local farms to people’s homes.[44] Their model, which involves paying producers substantially above market rate and only using organic food, is currently relatively expensive for consumers.
  • Using the polluter pays principle to incentivise inputs in the supply chain which create public value and disincentivise inputs which deplete it.

— — — — —

Public value in practice

As Professor Calvin Jones has shown, embedding capital within places is as important for local economies as creating it.[45] A thoroughgoing public value framework would empower local communities to take control over how the whole resource is spent, coordinating it to maximise public value. Some ideas for strengthening local democracy are explored in section 4.

3a. Public procurement

One model for increasing the public value of investment comes from local councils like Preston which are pursuing innovative strategies of public procurement and expenditure. The Centre for Local Economic Studies (CLES) mapped local supply chains and found that only a small proportion of the money spent in Preston (by the council, by consumers, etc.) was being reinvested locally. Through adopting a localist strategy to public procurement they changed this in a few short years. In 2013 the combined spend of six large public bodies was £38m in Preston and £292m in the whole of Lancashire. By 2017 it rose to £111m in Preston and £486m in Lancashire, delivering a significant boost to the local economy — and this in the context of a substantial fall in their overall budget.[46] Nottinghamshire has done similarly, adding tens of millions to the local economy.[47] Leaving the EU could open the door to an even more radical strategy of localist procurement and investment, for example by revoking or amending the EU Procurement Directives (which will initially be automatically translated into UK law) and strengthening the Public Services (Social Value) Act and the Scottish equivalent, the Procurement Reform Act 2014.[48]

2012 and 2013 research by CLES for the Federation of Small Businesses (FSB) provides us with a picture of local authorities’ current procurement strategies. The self-selecting nature of the survey notwithstanding, its results reveal important insights. The average spend in 2012 was £185m (£470m for county councils, £309m for metropolitan authorities and £26m for district councils). 62 per cent recorded the amount of this money that was spent locally. In 2012 only 18 per cent of authorities spent more than 50 per cent locally, while the average was 34 per cent.[49] In 2013, with 41 per cent of all local authorities responding, the average fell to 31 per cent.[50] The research found support for a significant economic multiplier effect, with spending locally generating an extra 51p per £1 spent for the local economy — 63p per £1 if the money was spent at a local SME and 40p per £1 if the money was spent at a large local firm.[51] Clearly, then, there is much to recommend a localist strategy of public procurement for rural areas.

And in 2015 new legislation came into force which required local authorities to publish details of all contracts worth over £25,000.[52] Despite limited observance of this legislation, it should in theory make it simpler to map current flows of public procurement and pursue a localist strategy.[53]

The central argument against such a strategy is that it is a form of local protectionism which cannot be scaled up. It is a zero-sum game and by keeping procurement local you take it away from elsewhere; if every local authority did it then the efforts of each would undermine the efforts of all. However, local economic flows are less likely to fuel radical wealth disparities than national and global flows. By ensuring, in specific places, that a greater share of monetary flows stay within local communities inequalities can be capped, which is likely to increase overall wellbeing and public value.[54] What’s more, this localism is not intended to be a universal solution for maximising local resources, rolled out across the country. It will be better suited to some areas than others. Much of the current investment flows out of rural and deprived regions to London, other big cities and overseas. Ultimately a choice must be made as to where it is most needed, where it will develop capacity where previously it did not exist, rather than contributing to already-thriving places, companies and sectors.

The strengths of thinking strategically about public procurement are not just about keeping money within a locality. When we consider a wider public value approach we see that there are opportunities for local procurement to deliver other outcomes, such as healthier lives, that deliver public value. £2.4bn is spent by the public sector every year on food and catering. This amounts to 5 per cent of the entire sector.[55] As will be explored in the farming for health workstream, unhealthy food consumption and obesity represent a significant cost to people’s health, happiness and public finances — around £47bn per year.[56]

Currently, “the Social Value Act 2013 allows people who commission public services to think about how they can also secure wider social, economic and environmental benefits. But it is being underused: one study showed that 43 percent of Clinical Commissioning Groups either had no policy on the Social Value Act, were not aware of the policy or had a policy in some incomplete stage of development.”[57] Government Buying Standards for Food and Catering (GBSF) provide further guidelines specifically for local procurement of food. They are principally focused on healthier foods, but equality and diversity, animal welfare and environmental concerns are also considered.[58] However, they are mandatory only for national government and even for those applying GBSF, many of the guidelines including those covering confectionary are optional.

Shifting local procurement of food towards healthier options can increase public value, improving people’s health and public finances. Should the GBSF guidelines be strengthened, or extended to include other aspects of public value? Is there a case for extending the mandatory GBSF guidelines to the whole public sector? If not, how else can we encourage local procurement of food that delivers public value?

In addition to a public procurement strategy oriented towards public value, there are other mechanisms local councils can use to deliver public value locally. Community asset ownership and transfer, for example, can ensure rural communities retain the buildings and institutions that improve public value and Locality have produced a how-to guide for councillors.[59] They also call for a £1bn fund, of which £125m would come from national government, for an English Community Asset Investment Plan (the Scottish government have created a similar body with the equivalent level of funding per capita) which would fund one project in each local authority each year.[60]

3b. Regional economic institutions

Public procurement is not the only way to align the whole resource towards public value or promote its flows in a localist direction. There is also a role for new, local economic institutions and industrial strategies targeted at rural areas. The government has committed to establishing local industrial strategies with LEPs and mayoral combined authorities to revitalise regions. The first places they will be pursuing them are in the North East, Tees Valley, West of England, Leicester & Leicestershire, Cheshire & Warrington and Heart of the South West. They have also pledged to use the UK Shared Prosperity Fund (UKSPF) to reduce inequalities between communities. However, following in the example of the LEPs, both the local industrial strategies and the UKSPF will have raising productivity as their goal, despite the decoupling of productivity and growth from earnings and public value.[61]

How might local industrial strategies and funding help build public value beyond the narrow focus on productivity and GDP? Regional development banks, central to the German economic miracle in the 1950s, are a tried and tested place-based mechanism for regenerating regional economies. In 1850 dispossessed workers and peasants in the north east of England came together and pooled their meagre resources to establish the Northern Counties Permanent Building Society. It provided security in hard times and its assets were the common possession of all those who had ever invested in it. It stayed local and loyal to its members. In the 1950s it merged with Rock Building Society and became Northern Rock. Still its traditions and its localism endured. Loans were given to local people at reasonable rates. During the miners’ strike the Society suspended mortgage payments from striking workers and their families. Yet in 1997, amidst the hubris of the boom years, Northern Rock demutualised and began short-term speculation on the stock markets. It became the fourth largest mortgage lender in the country. 10 years on the bank collapsed (none of the building societies that were demutualised have survived in their original form). One year later, in 2008, history returned full circle and the bank was nationalised. This time, however, it was not returned to the people but nationalised by the state bailing out a failing financial sector and heralding the beginning of the financial crisis.[62]

There is no part of the United Kingdom more in need of new local banking institutions than rural communities which have been denuded of their economic and civic assets by decades of underinvestment and a global economy tilted towards global cities. There is some banking support available in the form of a £200m Barclays fund and a £300m HSBC fund to support short-term and long-term cashflow for farmers.[63][64] But properly funded regional development banks would have a broader scope than just farming. They would ensure a circulation of capital in rural regions that would enable a wider rural economic revival. New businesses in rural areas are sometimes less productive and profitable than their urban counterparts. They tend not to benefit from economies of scale, and factors like travel costs can raise significant barriers in the early stages. If regional development banks were to afford funding based on likely overall contribution to GDP or productivity it is likely that rural areas would be overlooked, so there would have to be a duty to consider the special needs of rural communities in their statutes. Another funding model the Commission could explore is cooperative rural credit unions, which have historically played a role in Germany in providing low-cost access to capital for rural people, particularly the poor, looking to establish small firms.[65][66]

3c. Asset-based community development

Asset-based community development and associated movements are another attempt to map and coordinate the resources of local people and mobilise them to increase public value.[67] Perhaps the most successful recent venture of this sort has been undertaken in Frome, Somerset. While not explicitly a form of asset-based community development (it owes its origins to former Mayor Peter Macfadyen’s ‘flatpack democracy’) it uses the same principles to create a vast real-life social network that replenishes community life.[68] Led by an energetic independent local council, Compassionate Frome undertook, “the mapping of all existing community resources and the subsequent compilation of a service directory; the formation of a network of willing volunteers, known as Community Connectors, offering support to those in need and guiding them to appropriate sources of help identified in the service directory; the formation of groups requested by members of the community to meet newly identified needs; and the creation of one-to-one support relationships through liaison with Health Connectors.”[69] In a small market town of just 28,000 they now have 400 groups providing forms of mutual aid from help with DIY to mental health support networks.[70]

This form of social capital may seem like a nice but expendable extra befitting a bohemian West Country town but in fact it has delivered a significant and quantifiable benefit to public health and finances. Since the experiment launched emergency admissions to the local hospital have dropped by 17 per cent with an associated 21 per cent drop in costs, whereas across the whole of Somerset admissions have risen by 27 per cent, with a 21 per cent increase in costs.[71] This demonstrates that to calculate public value effectively, place-based mapping of social value has to form part of the place-based mapping of the whole resource. It also shows that the mapping itself, if it is led by community leaders on the ground, is a process which creates as well as measures social capital.

Similarly, in Cleobury Mortimer, a small Shropshire town of 3,036, local community organisers got together and created Cleobury Country Limited, a volunteer led organisation that mobilises the social assets of local people to promote the rural heritage of the area. Working with Locality they have established a community hub in the town that, among other things, runs a small library, hosts accredited training courses and a local events and jobs board.[72] They also run local allotments, encouraging locals to get involved in producing fresh food. This kind of ‘anchor organisation’, with sufficient support, can play an important role in the creating public value.

3d. Collaboration with local business

Business will have to be constructively engaged to orient their considerable economic clout towards delivering public value. Often this will be case of demonstrating shared interests between local business and environmental and other aspects of public value. From flood protection to enriching soils, for example, businesses benefit from well-managed landscapes.

Sustainability consultancy 3Keel have started putting this understanding into practice, convening local businesses, farmers and other land managers in Landscape Enterprise Networks.[73] In East Anglia, for example, they have engaged British Sugar, Nestlé, Adnams Brewery and other businesses in the area who have an interest in soil protection and water resilience and are encouraging them to fund projects in irrigation, reservoir management and cover-cropping.[74] The projects are in their early stages but have potential to help mobilise some of the resource flowing through places and value chains for public value.

These projects have their limitations, however. They are driven by business interests; while sometimes business interests align with wider public value objectives this is not always the case. It is only business being engaged, not public bodies or the third sector. The LENs are local projects and their work is piecemeal and relies on conversations with local business rather than systematic mapping of resource flows. Finally, their focus is limited to aligning resources to protect and enhance landscape assets. Nevertheless, they offer a model for one sort of coordination between businesses and land managers to mobilise untapped resources for public value.

— — — — —

Breaking silos: local councils and community entrepreneurs

One of the central insights of the bike tour was that people living and working in the countryside share a sense of uncertainty about the future and a lack of agency, economic as well as political, over their lives. Existing mechanisms designed to coordinate regional economic activity such as LEPs are unaccountable, ineffective and little known. The two-tier system of local government is collapsing under the weight of austerity. There is a need for a revitalisation of local decision-making and power.

4a. Devolution

The topographies imposed from Whitehall and those within which people feel they live differ substantially. Despite the attempts of successive reforms to rationalise the delineations of place, parish maps dating back to the 16th century remain the best guide to popular perception of the distinctions of place. Meaningful devolution is not only about the formal powers conferred to the local level, but also about the sense that the local authority which is the recipient of said powers substantively represents a particular place. We can see this in the very different public receptions different devolution proposals have received; whereas there has been widespread opposition to regional devolution (especially in the rural hinterlands written out of the city region model) with, for example, a referendum decisively rejecting devolution in the ‘north east’ in 2004, in early 2018 voters in Doncaster and Barnsley voted overwhelmingly for Yorkshire-wide devolution and to reject the nebulous ‘Sheffield city region’.

Local powers, then, should be based around the places which people inhabit, rather than those devised in Whitehall. As late as 1835 parishes spent one fifth of the entire (albeit substantially smaller!) national budget. And arguably in the spirit of subsidiarity and local attachment it is to parishes, the level of political authority closest to people, that further powers should be returned. This will require a revitalisation of democracy at the parish level so that there is a feeling of community ownership of the parish.

The Commission will explore various means of doing so; from the progress report: “These [new duties of parish and community councils] could include more useful and generative tasks than those which normally fall to parishes — developing locally responsive sustainable development plans, and other ways of bringing collaboration, co-design and democratic decision-making closer to people in their communities. It might also include experiments with adapting arrangements from other countries, including parish mayors (France), drawing down powers and responsibilities from districts on subsidiarity principles (Scandinavia) or local budget setting (USA), all three of which have traditions of local rural involvement which are at risk of withering in the UK.”

4b. Community leaders and voluntary groups

The power of individual community leaders is magnified in rural areas due to the sparsity of the population. One individual may struggle to make an impact in a London borough, but in a village of a few thousand a small injection of energy is often enough to transform the whole community for the better. This is clear from the example of Frome, discussed above. Westminster should not impose a uniform framework for community entrepreneurship on local communities, but we can support an environment that makes it easier for local schemes to proliferate, and which connects those carrying out important work.

There is already an ecology of institutions which provide support in rural areas and within the food and farming sector. There is, for example, a greater density of both churches and worshippers in rural communities and churches are often the central public building in a village. They tend to have meagre financial resources but an enormous asset in the church itself and in people’s attachment to it. They are already frequently used for coffee mornings, lunch clubs and other community get-togethers. The Methodist Church, which is particularly strong in rural areas such as Cornwall, work directly with farmers combating isolation. The Christian charity Germinate: the Arthur Rank Centre, for example, have 75 facilitators in rural areas who enable local people to take an idea from inception to fully-formed business plan.[75]

Even small acts, such as bringing farmers together over a bacon sandwich in a farmyard, play an important role in tackling loneliness and isolation and thus contributing to public value within the sector.[76] The three charities within the Farming Help network help farmers with financial, legal and personal problems. Farming Community Network, for example, is a voluntary organisation which contributes to the wellbeing of farmers. They have 400 volunteers over the country, as well as a helpline and online service for farmers who are struggling, whether with problems on the farm or, for example, mental health. 6,000 farmers are reached ever year through the service.[77]

But these voluntary services are often patchy or disjointed. In the progress report we wrote: “We will explore the potential of a national network of community facilitators or ‘public entrepreneurs’, to connect communities more effectively with all the relevant institutions; identify and mobilise the resources at a local level, to help build the capacity of parish and community councils, and connect between communities to share experience, knowledge and resources. This would have to be funded and convened, independent to local authorities, by a national body with appropriate knowledge and experience, such as ACRE or Plunkett Foundation.”

— — — — —


The concept of public value provides a rich and radical account of what public policy should be aiming for. The public value framework offers the practical mechanism for delivery. Rather than focusing on isolated policy commitments or projects, together they allow us to systematically rethink how best to deliver a sustainable and resilient future for our food and farming systems and the wider countryside.

— — — — —

[1] p. 5

[2] pp. 11–22

[3] pp. 84–85

[4] — p. 7

[5] Ibid. p.12

[6] p.27







[13] p.4

[14] E.g.

[15] pp. 32–33


[17] Ibid. p. 346–350

[18] Ibid. p.360

[19] Ibid. p. 357

[20] Ibid. p.354

[21] Ibid. p.355

[22] Ibid. p. 349














[36] (Our Common Ground)


[38] p.27

[39] p.17

[40] p.26


[42],Stephan p.9.



[45] Calvin Jones, ‘On Capital, Space and the World System: A Response to Ron Martin’ (Territory, Politics, Governance, 2015) p. 17




[49] Annex A pp. 5–8

[50] pp. 14–15

[51] p. 4



[54] Kate Pickett and Richard Wilkinson. The Spirit Level (Penguin, 2010)

[55] p.4

[56] p.5




[60] p.15


[62] Northern Rock was the sponsor of Newcastle United FC from 2004 until after it collapsed. Its replacement sponsor was Wonga.






[68] Peter Macfadyen. Flatplack Democracy: A DIY guide to creating independent politics. Eco-logic books (2014).




[72] p.21






Note: this report was originally published on the RSA website (Royal Society for the encouragement of Arts, Manufactures and Commerce), which hosted the Food, Farming and Countryside Commission between November 2017-April 2020.