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Consumers Powering Growth – Better Choices: Better Deals

May 10, 2011

The Government has launched a Consumer Empowerment Strategy setting out its intention and proposals to help increase consumer power, a key part of its newly announced economic strategy The Plan for Growth (pdf).

Better Choices: Better Deals – Consumers Powering Growth uses insights from the behavioural sciences (aka ‘nudges’) to support a new approach to empowering consumers and shifting the balance of power in relation to businesses and providers of goods and services. It hopes to enable consumers to make better choices, obtain better deals and, in consequence, contribute to improved business efficiency and innovation, market competition and economic growth.

The emphasis is on putting customers in charge of their own personal data which can be used to inform purchasing decisions and lifestyle choices, and on shifting away from the traditional regulation-based approach to consumer/business relations towards a more open, transparent partnership approach.

The strategy’s ambitions are as bold as they are broad – a fundamental shift in the consumer/business balance of power; transformed access to data gathered and held by commercial and public bodies; reforms to the systems of redress and resolution; a new culture of collaboration between Government, businesses, consumer groups, third sector bodies and regulators; economic recovery powered by new consumer confidence.

Consumer groups have welcomed the theory but have also questioned whether:

  • consumers, armed and able to use the new information available to them, have the resources to drive economic growth?
  • the depth of consensus and trust, required by the new strategic partnership approach to programme-development and regulatory oversight, is achievable without some form of regulatory coercion?

From a local government perspective, the big question concerns omission: what (and where) is the spatial dimension? The strategy’s scopey ambition is at peculiar odds with its narrow field of vision, almost exclusively on an agenda driven by central Government at national level.

Local authorities could be forgiven for ignoring it – and run the risk of being similarly myopic. It has implications of which local authorities should be aware, at the very least. There are also opportunities on which they could capitalise for the benefit of local consumers, businesses and their own regulatory activities.

The strategy proposes a fundamental shift in consumer culture. If successful, it will heighten consumer expectations of their place in the consumption of goods and services, and their relationship with businesses and providers. It will also introduce new mechanisms and systems for negotiating and resolving difficulties in those processes.

There are obvious parallels for local authorities. The past decade has seen a transformation in the relationship between local service providers and their local communities and service users. The transformation is further reflected in that between local citizens and the nature of local governance. The new era being proposed for consumers and businesses, characterised by new levels of openness, accountability, transparency and honesty, is one in which local government has much to contribute by way of relevant experience.

It is also one in which local government should elect to be actively engaged. It matters not to consumers whether they are dealing with a private or public sector provider. Nor, in today’s mixed service provider economy, are the sectoral boundaries so distinct. The breadth of cultural change envisaged by the strategy will, necessarily, impact across the board.

Local authorities will want to ensure that the strategy develops in such a way as to retain some semblance of coherence for local people in their dealings with (all) service providers – and its coherence in terms of the culture and mechanics of service providers’ relationships with the public. The relationship between ‘mydata’ and the greater availability of regulatory data with data protection, freedom of information and confidentiality requirements will require high resolution microscopy indeed.

More tangibly, the strategy presents practical challenges and opportunities in which local councils may want to engage more immediately:

  • supporting the development of collaborative purchasing and goods sharing schemes by local communities, groups and consortia;
  • ensuring the potential for small, local businesses to contribute to community schemes – that new purchasing schemes are not to the sole advantage of big business;
  • reviewing and reconfiguring their own local trading standards operations in terms of their advice and protection work, and any local quality assurance schemes;
  • working with businesses, traders, regulators and consumer groups to ensure a local dimension to the Strategy.

Local councils will, of course, want to encourage a more open, transparent and quality driven approach on the part of local businesses and traders. They will also want to ensure that consumer protection, privacy, security and safety is not compromised in the process.

This post is based on a LGiU members briefing written by Juliet Morris . Briefings are accessible to all officers and elected members of our member authorities. For more information on joining the Local Government Information Unit please follow this link

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