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The 2020 Public Services Trust Blog

Thursday, April 22, 2010

Three colours orange – but what about the issues?

By Ben Lucas

In the parallel universe of British politics everyone has now become a Cleggon – basking in the orange afterglow of the Leader’s debate.  Change has become the central question – the choice being about who can manage this best and who personifies it the most.

But the election has not yet resolved itself into a clear argument about alternative strategies for managing the big issues – the economy, the deficit and the future of our public services. Read the manifestos in detail, as I suspect few have done, and what emerges are large areas of agreement between the three main parties, especially about public services and how they need to change.  But each party puts a different gloss on this. 

For Labour the central issue is about the scale of future risk – economic, social, demographic and political.  The message is that only Labour has the experience and fair values to guide Britain through these difficult times.  From here it is only a short step to Gordon Brown’s dividing lines on what public service budgets Labour would protect.

The Conservatives focus not so much on future risk but the state we are in.  Their argument is that our public finances, economy and society are broken and that a fundamentally new approach to government is needed.  They set out their stall for the Big Society, in which families, communities, and the state will need to work together to build a stronger society – exemplified in their plans for national community service for 16 year olds.

Meanwhile the Liberal Democrats have presented themselves both as the change agents and the people who tell it as it is.  For them the elephant in the room is the deficit and they seek to make a virtue out of plain speaking on this – saying that efficiency savings will never be sufficient to tackle the deficit.  They identify the need for hard choices about which spending to cut and offer, as examples of this, Trident and the Child Trust Fund.

Of course each party has much more detailed proposals on public service reform.  Labour has proposed strengthening citizens rights to public services to create a bottom up entitlement driver for improvement, with new patient and citizen guarantees. The issue of long term care and Labour’s proposal to create a new National Care Service echo Brown’s message about future risk.  And Labour seeks to be our mutual friend with proposals for public service co-ops in housing, sure start and even primary care trusts.

The Conservatives have prioritised welfare reform, based on tougher conditionality and extending payment by results for welfare service providers.  They have also promoted their model for parent led schools and for public service employee mutuals.  And they have courted some controversy by sticking to their guns in advocating elected police commissioners. On health their policy has been ‘softly, softly’, as they continue with their strategy of seeking to neutralise what has been a traditional Labour positive.   

The Liberal Democrats make fairness and decentralisation their overarching themes for public services.  They promote an explicitly redistributive funding formula which targets funding at the poorest people, so that the money follows the poorest patients and pupils – education and health premiums.  They advocate strengthened local say through elected local health boards and police authorities and neighbourhood justice panels.  And, in addition to their well publicised plans to simplify the tax system, they also propose greater transparency and control over by giving people greater flexibility in accessing part of their pension before retirement.  What the Liberal Democrats do not do is set out a framework for public service reform.

But so far none of the three main parties has really managed to lodge with the public a clear sense of what their vision adds up to for public services.   The Big Society is in some ways the most audacious idea, but it has not yet resonated as it might because, apart from volunteering, it it’s not yet clear where the beef is.  Meanwhile Labour’s focus on future risk has had some effect, but at the same time seems clunky. And the Lib Dems have scored on the deficit yet their prescription is less comprehensive.

Each party appears to have more of a stance than a strategy.  Take localism.  All are agreed that significant decentralisation is needed. The policies are plentiful from elected mayors, to localised planning and housing. What is lacking is a coherent theory.  A genuine shift in power from the centre to localities would have to involve big change in Whitehall and Westminster – a re-imagined, smaller and more strategic centre whose role would be to enable and empower innovation and delivery at local level.  That could be a recipe for achieving big savings as Total Place identified. The simple test for real devolution is to follow the money – if control over funding and revenue stays at the centre then so will power..

So the challenge for the main parties as we enter the second half of the election campaign will be to crystallise their respective positions into harder propositions, which offer voters some real choices for the future.  This isn’t just necessary for winning it is critical for governing. Whoever wins the next election, and whatever formation emerges after May 6th., their job in tackling economic stagnation, rising demand pressures and growing debt levels will be made that much harder if they haven’t established a mandate for the tough decisions which will be necessary.

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Wednesday, February 3, 2010

Staying in or Pulling Out?

By Henry Kippin

There’s a typically reflective piece in the FT this morning from Martin Wolf, pulling out his key themes from the World Economic Forum in Davos.  Strangely, I wasn’t invited this year, so I will have to take his word for it…

The article considers the short and the long term challenges for the global economy, and the killer question of if and when to withdraw fiscal stimulus and start cutting public spending.  The question is a global one, but is utterly relevant to our own election campaign. 

 

Labour accuse the Tories of wanting to ‘strangle the recovery at birth’.  The Tories accuse Labour of ignoring the ‘great bulk’ of the UK’s structural deficit.  There are risks to both strategies, but Wolf also points to the longer term challenges of financial sector reform and a rebalancing of the global economy. 

What interested me was his perspective on leadership and consensus.  An ‘impressive ability to deal with the crisis’ was shown, but now we are back to the push and pull of everyday politics, it may be much harder to generate the kind of global consensus and willingness to work together that pulled us out of the crash.    

Speaking of which, there is an interesting article in this weeks New Yorker (which can be read online) about the new Tea Party movement in the US.  Really fascinating to see how a disgust with mainstream politics (and mostly with the ‘liberal’ elite) has led to such an organised, collective set of protest movements.  This is definitely not a coalition that would make many moderates or Obama supporters (or indeed me) feel comfortable, but its fascinating to see how grass roots mobilisation is impacting on formal US politics.

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Posted by Henry Kippin at 10:18 am
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Thursday, January 7, 2010

Let it snow, let it snow, let it snow!

By Ashish Prashar

As we are in the middle of the coldest winter in the UK for 30 years and people across the country are battling treacherous conditions after sub-zero temperatures follow days of snow, the economic impact of the cold snap is beginning to pile up.

The Federation of Small Businesses has criticised head teachers for closing schools too readily in the snowy weather (over 10,000 schools closed across the UK), saying lost working days are affecting many companies. With millions unable to get into work, business leaders are ‘forecasting’ (excuse the pun) that the cost to the economy could top £14.5bn by the end of January and with the big freeze set to continue until March business leaders are urging workers to carry on regardless.

This doesn’t bode well for an economy still navigating its way through a recession, oh and wait there is still more snow to come… I guess the only big winner from the cold snap has been energy firms, whose profits are set to soar, well I’ve had my central heating on all morning haven’t you?

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Posted by Ashish Prashar at 12:40 pm
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Tuesday, September 8, 2009

Public services – it’s the economy stupid!

By Ben Lucas

Mathew Taylor in his blog yesterday, makes the point that what is missing from public debate is a strong economic case for public services. This is because the post-war welfare state settlement was conceived partly as being about social justice and partly about social amelioration.  Of course it had an economic function, to maintain a healthy and contented workforce, but this economic case was not the explicit rationale for the settlement.

If you separate the public service settlement from the economy then it is inevitable that the sole focus becomes what society can afford.  Yet the real question should be what is the welfare state/public service settlement designed to achieve.  Here as Roger Liddle, Chair of the Policy Network, and one of our 2020 Commissioners has pointed out, there is something we can learn from continental Europe. There the question of welfare reform is posed in explicitly economic terms. The aim of social and welfare reform is to enable the highest possible level of participation in the workforce, so as to create a more sustainable society and a tax base that can fund pensions, health care etc.

In the UK there is a danger that the focus will be exclusively on debt levels in public finance rather than the wider economic challenges, of which debt levels are part.  We should be at least as worried about the decline in the tax base, as about debt levels. In the medium term the biggest challenge that Britain will face will be about the dependency ratio – the proportion of the population that contribute through taxation to society, as opposed to the net beneficiaries.  Demographic change allied with globalisation will lead to an older society, with a smaller proportion of people in work and a further decline in ‘traditional working class jobs’.

Public services face a perfect storm of growing demand pressures as a result of demography, globalisation, behavioural challenges and climate change combined with a massive funding squeeze. The proper response to this would be a new public service settlement with the twin objectives of increasing both economic and social participation in society.  This then makes the case for talking as Matthew Taylor does about public service productivity, but also for focussing on what can be done through public service reform to boost participation in the workforce. This ranges from skills, education and training policy through to welfare reform and early intervention. Some of this policy work has been developed by Government and Opposition. What has been missing so far is a strategy which links public service reform with economic growth.

This is a theme which we will be focussing on over the next few months, as our Commission on 2020 Public Services develops its key propositions for a new social settlement.

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Friday, August 21, 2009

High Pay Commission – Yes or No?

By Henry Kippin

Some interesting debates going on over the Compass campaign for a high pay commission.  I’m going to try and set out some of it here:

Arguments For:

  • Some people earn an absolute fortune – true
  • Some people have repeatedly been rewarded for what most of us would see as failing – true
  • The government acted pretty successfully over low pay, establishing consensus over the minimum wage – true
  • A better and happier society would be a more equal one (or certainly less unequal) – progressives would probably say true

But say the commission is established, and sets a salary cap.  This might not be a good thing because:

  • A high salary cap would be indiscriminately lump together the bankers, with the entrepreneurs, with the footballers, with the pop stars etc etc on the basis of salary – true
  • It would therefore penalise some people who work very hard, and deserve their rewards (salary or bonus) – maybe true
  • It would ignore nuance in the value or spin-off benefits from these high salaried jobs – true
  • It would set an obstacle to high pay, but not an insurmountable one (people would use bonuses, incentives etc to get round that) – definitely true
  • It’s effectively a ceiling on aspiration, and thus damaging economically and morally – maybe true, but how many of us will live to find out?
  • High pay in the highest performing organisations is a function of a well-working market, so the government shouldn’t tinker with it – hmmmmm- not sure what the economic crisis says about this…

An alternative suggestion – put forward this week by David Aaronovitch Hamish McCrae (and there are other ideas) – is to make earnings transparent, along with establishing a more open and ‘straightforward’ tax system.  This sounds good, though certain footballers have demonstrated that public knowledge of salary details does not necessarily translate into more self awareness…

Anyway, I’m undecided about this one, and eager to hear more arguments for both sides. Anyone want to help?

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Posted by Henry Kippin at 3:11 pm
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