The 2020 Public Services Trust Blog

Todays figures on NHS primary healthcare trust overspends are a sharp corrective to the idea that cuts to public spending will hit the back room only.  Chief Secretary to the Treasury Liam Byrne is apparently impressing upon department heads the need to find big savings, but the scale of overspend in some trusts (Enfield being the largest) illustrates the challenges of making this happen – and the likelihood that institutions will feel the pain as well as service users. 

In the same article, the Kings Fund’s John Appleby uses Manchester as an example – “in Manchester you have 25 acute hospitals.  That is probably too many and it underlines what big questions the real funding cuts entail.” 

These are massive choices to be made, with real human consequences and long-term (social and behavioural) impacts for communities.  

This speaks to a key tension in the current debate on public services – and one that has not really been explored in depth by any of the parties.  Cuts as an end in themselves seem to be necessary in the short term.  But the question is: how do they fit into a longer term perspective? 

In the next couple of weeks the Commission will publish its interim report, which will set out such a vision.  It wont be everyone’s cup of tea, but it will at least try to force a conversation that gets beyond the short term, and asks politicians and the public to think about ten years time as well as tomorrow.  If this really is a ‘moment of historical discontinuity’ as Vernon Bogdanor has said, we need to do both.

Welcome to the new 2020 Public Services Trust blog. This is just the start of our vision of a Commission 2.0. We aim to post regular entries and we hope you can join us in lively debates on the future of public services. The posts will range from speakers at our seminar series and researchers working on commissioned reports for the Trust, through to commentary on current public service policy issues.

We are entering a new era – public services in a cold economic climate. Whilst the inevitability of recession has been apparent for several months, it is only now that the political parties are even beginning to think through the implications for public services. This is partly because political parties are like oil tankers, it takes a long time to turn them around, and partly because a mindset created by 16 continuous years of growth takes some time to come to terms with a new economic reality.

As recently as the party conferences we were treated to the very odd spectacle of completely disconnected narratives from Labour, Liberal Democrats and Tories. Gordon Brown, Alastair Darling, Vince Cable, David Cameron and George Osborne all talked about the new economic challenges, with the latter dubbing this “the politics of austerity”. Meanwhile, Ministers and spokespersons for spending departments gave speeches and unveiled policies, sometimes involving new spending commitments, which mostly seemed detached from the new economic reality.

Nevertheless, the new economic climate looks like changing everything. Jobs are back at the top of the political agenda. The state is back too, both in the US and the UK, with the effective nationalisation of the financial sector and everyone looking to government action to stimulate the economy. Keynesian counter cyclical investment in the form both of fiscal stimulus and infrastructure type public works package is once again the orthodoxy. Meanwhile there are chilling rumours about the size of the fiscal gap and the scale of public service cuts which may have to be introduced either in 2009/10 or the year after that, on top of the immediate savings which departments are going to have to make.

Through both our seminar programme and our shortly to be launched Commission on 2020 Public Services, we will be looking at the medium to long term effect on public services of economic downturn. In the short to medium term the focus will be on hard spending choices, with zero sum consequences. But in the longer term the questions which our Commission will seek to answer are what will we need public services for in the future, and what should be the balance and distribution of risk and responsibility between the state, society and the individual. This will involve exploring in some depth the features of a post-bureaucratic or an empowering state in relation to public services and how these would be balanced against the strategic and planning role which the state will need to play both on infrastructure and, for the foreseeable future, in financial markets. The long term issues, which economic downturn puts into even sharper focus, are the demographic, economic, environmental, fairness and behavioural challenges with which our current public service settlement, based as it is on the 64 year old Beveridge report, is ill equipped to cope.

Our first guest blog, from Hilary Cottam, founding partner of Participle takes up this theme by proposing a new model, Beveridge 4. Her starting point for this is the innovative work in which Participle has been involved with Southwark Council in seeking to recreate services for the elderly. This is particularly fitting, as it has long been held that the rising cost of care for the elderly, in a society in which the number of those aged over 85 will increase 50% by 2020 to 1.9 million, could be the straw that breaks the camel’s back of the welfare state.