The politics of austerity – and better public services

12 June 2017

The Labour Party is on a high, having run on a manifesto that promised big increases in budgets and manpower across the public sector.  The departing Number 10 chief of staff, Nick Timothy, has concluded that “many are tired of austerity”. Some  may think that the 2017 Election result puts public service reform off the table. I’m not so sure.

As others have said, what was remarkable about the campaign was the absence of discussion about the public finances.  As the OBR home page shows, the net debt stands at  88.8 per cent of GDP, more than twice the level of a decade ago. The deficit is falling but the timetable for its elimination has been repeatedly pushed out (and was postponed again by both Conservatives and Labour at this Election). This means that no-one in the public sector will feel immune from the push for value for money.

Labour won the election debate on public services but largely because the Conservatives made such a weak case against them.  By costing its manifesto, and proposing tax rises, Labour demonstrated that it was taking the public finances seriously (even if the numbers themselves were highly questionable). By offering increases in money and employment, Labour had an answer to the question of how public services could improve.

Given the state of the public finances, however, what voters needed was the argument that public services need ideas as much as money.  In truth, the Conservatives have been almost as willing to argue that it is budgets alone that matter. As Reform has written before, the 2010 Government emphasised that it was “protecting” the most sensitive areas (the NHS) while seeking efficiencies in others (like policing).  Theresa May has never said anything on the NHS other than to promise  extra resources, and the Conservative manifesto was little different. As Home Secretary, she bravely argued that extra police officers did not guarantee falling crime, yet she found it hard to make those arguments at the end of the campaign.

Certainly no political party should offer “austerity” if that equates to an endless prospect of cash-strapped services, steadily deteriorating. That does not mean, however, that they have to offer a simple-minded and unaffordable expansion in resources.  It means embracing all the opportunities of new technology and accumulated experience in reshaping services so that they achieve what they need to (linking to recent Reform papers as examples). My colleague Ele Harwich is tomorrow addressing a European conference in Croatia on the potential benefits of machine learning in public services, drawing on pioneering UK work. The Department of Health announced partnerships with three artificial intelligence companies earlier this year.  This is where the debate on public services in the campaign could have been, and can be now.

Conservatives may respond by saying that the brave reforming policy in their manifesto, to make greater use of housing wealth to fund social care, went down like a lead balloon. Depressingly, Dominic Lawson concluded yesterday (£) that no political party will offer a honest manifesto ever again. I continue to be optimistic that voters will respond to the right policies, accurately communicated. Reform’s ideas on social care funding will be our first publication of the new Parliament.

Andrew Haldenby, Director, Reform

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