The 2020 Public Services Trust Blog

Watching Sky’s 24-hour news coverage of President Obama touching down on the tarmac at Stansted airport tonight, ahead of the G20 Summit a thought occurred. What would he think of the mess that is our MPs’ expenses? Being as Google has the answer for everything, I did some quick fire research, and found this in New York Mag, the news and features section:

At a time when people are having trouble holding on to their houses, Barack and Michelle Obama have sensibly decided not to use taxpayers’ money to renovate theirs. New presidents are allotted $100,000 to overhaul the White House residence and the Oval Office, and the Obamas hired Hollywood decorator Michael S. Smith (known, per his site, for mixing “Old World classicism with very contemporary settings”).

But the First Couple isn’t spending that money. They “are not using public funds or accepting donations of goods for redecorating their private quarters,” says Camille Johnston, director of communications for the First Lady. Nor is the couple, who reported $4.2 million in household income in 2007 tax returns, using money from the White House Historical Association, a privately funded foundation that paid for a $74,000 set of china shortly before Laura Bush left town.

But does this mean they’re going to spend more than $100,000 or less? Though Michelle Obama has talked up Pottery Barn, Smith’s client list includes cost-is-no-object types like Rupert Murdoch, Steven Spielberg, and former Merrill Lynch CEO John Thain-for whom he procured that $87,783 rug. “There’s no question that he’ll get it done in the way that it’s supposed to be done,” says Smith client and Democratic donor Katherine Chez. “But how, I don’t know.” The White House declined to disclose the budget, saying that all expenses would remain private as a result of the Obamas’ decision to absorb the cost.

Maybe just maybe our MPs could learn a lesson or two from this?

The Telegraph published the results of a new poll yesterday on the topic of public spending. “Public Spending Too High, Says New Poll”

The Telegraph/YouGov study found that ‘only one in ten people wants to keep the level of Government spending at its present level’. They found that ‘more than two thirds believe that the Government should spend less on administration in public services’.

OK….. but what about the actual services?

Apparently, most people thought that ‘core services like health, education and policing should keep their funding’. Divergences in public perception of possibility and reality could not be more starkly laid out, with implications for all political parties.

So what is the message? We are mindful of debt, yet want to maintain our standards. We are conscious of waste, yet believe current service provision in key areas is worth protecting. We want to kick-start our economy again, but are fearful of over-spending. Something has to give.

Localism, co-production, citizen empowerment…just a few of many current buzz words which carry little meaning outside of the public policy community…The Local Government Association (LGA) had a point when it released its top 200 pieces of jargon that public bodies should avoid using.

As Henry Kippin says in his blog (19 March 2009), the issue the LGA raises is an important one. If policy makers are going to make real headway and start to redesign public services from a genuine citizen perspective, they are going to have to have a conversation with the public using everyday language – not policy speak. But this issue of policy language and communication isn’t new. In fact, localism, co-production, citizen empowerment aren’t new concepts either.

The general public have long cried for a louder voice and more locally determined services. Accountability and increased ‘customer focus’ were meant to be the driving force behind Margaret Thatcher’s reforms way back in the 1980s. But we’re still talking about it. And therein lies the real problem. The same people are talking about the same things within the same corners of Westminster village, and have done for the last 20 years. And we wonder why little has changed?! Even this argument feels like a broken record…

So what to do? How can we make citizen empowerment or co-production meaningful policy? The Commission on 2020 Public Services is endeavouring to do things differently. Watch this space…

There’s an interesting report available today from the IPPR’s Tomorrow’s Capitalism series, exploring the idea of ‘accountable capitalism’. Its authors take the financial crisis as their starting point, and argue that simply blaming the bankers is a red herring. The crisis, they contend, is evidence of systemic failure – a ‘collision of self-interests’, not the fault of one set of agents.

This starting point leads into a discussion of what should replace our failed system. The focus, they argue, should be on five pillars: responsibility; accountability; relevant information; independent adjudication; and vigilant participants. The first pillar is already a central element of the Cameron message, which has pushed the idea of ‘fiscal responsibility’, ‘civic responsibility’, and even responsibility for obesity. Accountability is high on the Labour agenda, with the PM trailing the Cabinet Office’s ‘Working Together’ document as ‘ushering a new world of accountability’. The need for relevant information and effective adjudication has also been thrown into light by recent turmoil at the FSA.

So far so essential – but also relatively uncontroversial.

The authors’ discussion of vigilance is, however, a new avenue – interesting as much for what it doesn’t say as what it does. The essay explores trustee accountability and grass-roots shareowner movements as ways of shaking people out of a ‘hardy culture of passivity’, and using Web 2.0 networking capability to ‘pressurise investors into continuous engagement’. The overarching argument is that insiders (or market participants in this case) are often more effective regulators of market processes than outsiders – with the potential to drive up structures of transparency and accountability.

This is not self-regulation, but a nod towards the idea that we are all stakeholders in the financial crisis – and thus we all share a degree of responsibility for how it should work in the future.

The question is how far we take this idea. What would a citizen focused view of the market look like? Would it imply more than simple transfer and exchange? Should we be more than consumers? Should we be demanding a company balance sheet with our take-away cappuccinos? The IPPR are pushing at an open door with regard to re-evaluating the role of values in markets; but the debate will also have wider implications – sharing elements with emerging debates over public service reform. It is a creative avenue worth following.

Today’s papers lead on Governor of the Bank of England; Mervyn King’s warning yesterday that the economy cannot afford another substantial stimulus package because of the state of public finances. It has been reported that this has made public the tensions between the Bank of England and the Treasury on the one hand and No10 on the other. Apparently, the Bank of England and the Treasury are increasingly concerned about the deterioration in public finances, whilst the Prime Minister wants to keep open the option of further stimulus measures in the budget and fears the economic consequences of focusing primarily on debt reduction.

What is striking about this is how much it mirrors tensions which have existed at previous points in recent British history. Bernard Donoghue’s excellent “Downing Street Diary Vol 2. – 1976-79), launched at the RSA late last year, reveals similar battles between the Treasury, the Bank of England and the rest of government during the tense negotiations with the IMF in 1976. By 1976 the Treasury was increasingly taking a monetarist line, so its pre-occupation was with reducing debt, strengthening the pound and tightening money supply. This was strongly backed by the Bank of England. Jim Callaghan and the rest of the Government frequently felt that they were backed into a corner by the Treasury and the Bank and worried about the consequences on jobs, the wider economy and public services of Treasury orthodoxy.

There are of course some significant differences between now and 1976. We are in the middle of a global and not just British financial crisis this time round. Whereas Callaghan was infuriated by leaks from the Bank of England, now Gordon Brown has given the Bank independence and Mervyn King’s views were given on the record. In 1976 the Cabinet was locked in lengthy debates and negotiations about how to respond to the crisis, this time power is much more firmly located in No10, No11 and the Bank of England.

One other interesting and unexpected feature of the current situation is that the power balance between No10 and the Treasury appears more equal than had been expected; it had been assumed that Gordon Brown would be an all powerful PM, with the Treasury much weaker than at any point in recent memory. But the logic of economic events has strengthened the Treasury and Bank of England’s hand and they are much more significant in the balance of power than anyone would have guessed. This is why Mervyn King’s intervention was significant.

Out of all this we are beginning to see the contours of where future political debate will lie. Much of this will be about the role and efficacy of the state, and about what its scope and form should be. Some within the Government will want to push ahead with further counter cyclical stimulus measures in the budget, even at the risk of worsening the debt picture – in order to reduce the impact of the recession, and to maintain a political dividing line with the Conservatives. The Treasury and the Bank of England will oppose this, increasingly reverting to type as advocates of fiscal restraint. The Conservatives, albeit warily, are attaching more and more importance to fiscal rectitude and reducing debt.

A tougher attitude to debt across the main parties will necessitate cuts to public service spending on a much greater level than anticipated in the PBR. So the choice between the parties may not be one of cuts vs. investment, but over the scale of cuts. This will make the Government’s current battle-line difficult to maintain.

What neither party are yet talking openly about are the big choices which will have to be faced about public spending and public services. The question for progressives across the party divide is what would a progressive strategy for public spending retrenchment look like?