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My Lords, the idea of public service is much invoked in debate about the reform of public services, but little analysed. Does public service have more than rhetorical and sentimental value? I believe that it does, and I have two reasons for saying that. First, there is the link between the public sector and the provision of certain basic goods such as health, education and welfare, which impinge directly on human well-being, and physical security, in the case of the police service and the fire brigade.
If those services are not provided for properly, well-being will be lowered. In certain circumstances, it may be that the effects of that are irreversible. For example, if people miss education or health opportunities, or if policing fails, the effects may be irreversible. In this country, most people feel that these services should be provided by government out of taxation.
Secondly, it is vital that there should be a high degree of trust on the part of both government and consumers that services are being properly provided for and operated in the interests of the needs of consumers and not in the interests of producers. The ethic of service can provide a basis for that trust. Service provides a constraint on sectional and producer interests in the public sector and allows government and consumers to have a degree of trust in the provision of services that have a basic effect on people's lives.
The alternative view is that associated with public choice economists. Many Members of your Lordships' House know much more about this than I do, but the view which is favoured by people on the Right is that there is no such ethical realm as that of service in relation to the public sector. They say that people entering the public sector do not step into a different ethical realm from that of the market or the voluntary sector and that people are motivated by utility maximisation and self-interest, whichever area of life they are in. That applies as much to the public sector as the private sector. It is argued that that is the best explanation that can be provided for the growth of the public sector in western society. It is the result of the utility maximising behaviour of those employed in the public sector.
On that view, the institutional reform of the public sector should not pay much attention, if any, to the idea of service, but should look to reforms that constrain self-interest or engage self-interest in ways that will produce benefits.
I would argue that even on that public choice model, one cannot escape the problem of trust. If one considers the kinds of constraints that public choice theorists put on self-interested behaviour, contract is a main focus. The imposition of a kind of contract on individuals in the public sector will constrain their behaviour better than anything else. While that may be so, it does not avoid the problem of trust. However specific a contract is, there is always a gap between a set of rules and how the rules are implemented. That point has been well known since Aristotle. If there is always a gap between rules and their implementation, one has to use judgment to apply them. How can one do that if the rules do not give the answer? One has to trust people to apply judgment in an appropriate way.
If we devise institutions on David Hume's injunction that we had better treat people as if they were knaves, we may end up driving out good motivation, which was the point made by the noble Lord, Lord Skidelsky. If we adopt a wholly contractual and rule-governed approach to behaviour, we shall end up with people fulfilling their contractual obligations and no more, which was the point made by the noble Lord, Lord Haskel.
We cannot continue devising rules and contracts to constrain behaviour. There has to be a degree of trust and judgment, which must be exercised against the background of the ethos of service. The service ethic is important in that respect. I certainly do not think that we can use the service ethic as the whole basis for thinking about the public sector, and I do not regret what I did in relation to quasi markets. Nevertheless, it is important that we do not end up throwing the baby out with the bath water.