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The 2020 Public Services Trust Blog

Thursday, November 25, 2010

Local Identity – the photographic evidence?

By Henry Kippin

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Last night I was speaking at the mining institute in Newcastle at a roundtable discussing themes from LOCAL – a book my Dad and I published recently.  The book is a mix of photography (based on an artist-in-residence period at Cumbria County Council), and text (an essay on local politics & identity), and the roundtable reflected a mix of interests in the photographic process, the politics of creating a piece of work like this, and its relevance to the current national and local political context.

Lots of discussion centred on the potential impact of spending cuts on the North East – impacts that no-one can really prejudge, but that most people felt would be socially damaging.  Those asking “where is the growth strategy to get places like Sunderland out of the other side?” are asking the right question.  This is where concepts like the big society and the 2020 Commission’s idea of social productivity must have practical impact.  And it is precisely because the public sector is such a shaper of economic trajectory (the University in Sunderland, for example) that social productivity – which suggests a more active role for the state – is more likely to help people think through what happens next.

Back around the table, one participant commented on the ‘pace’ of the photographic content of the book – “feels almost rhythmic, like its own council logic of movement but inertia, meetings, decisions, problems, meetings, solutions, meetings…et cetera.”  What he was getting at was that the pictures carry a sense of the banal, a sense that nothing changes in the machine of (local) government.  Our book was created in 2009, before the current politics took shape.  But I wonder if this is true now. Bradford council was reported to have sent every employee a letter warning that ‘their jobs are at risk of reduncancy’.  This is hardly everyday – and we should be worried if it is the start of a new politics that considers jobs and people as collateral damage as budgets are quickly balanced.

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Posted by Henry Kippin at 4:36 pm
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Wednesday, June 23, 2010

A budget for cuts but is it a budget for reform?

By Ben Lucas

This is a tough budget. It adds another £40bn to the already stringent consolidation planned by Labour.  We won’t know its full impact for some time to come. The real test will be what happens to the economy and to jobs.  If growth continues and gathers pace next year, then the Government will feel vindicated, if not then people will question whether the scale and timing of deficit reduction was right.

At least now we know the numbers – what we don’t yet know is what will be the impact on public services.  That will be set out in the spending review, which now assumes even greater importance given the challenge of trying to maintain and even improve social outcomes in the context of huge spending cuts.

A large part of the story is about welfare cuts.  Child benefit will be frozen for the next three years and all other benefits, except pensions, will be uprated only in line with the Consumer Price Index, rather than with RPI.  Housing benefit will be capped at £400 a week.. The principles which are being applied to welfare cuts are conditionality and means testing, with the aim being to target expenditure on those who need it the most and to incentivise work.  But this clearly does not explain the decision to uprate the state pension, which is a political decision.

By far the biggest inconsistency in the coalition government’s position on public expenditure is on health.  The government’s argument is that we face a moment of unprecedented fiscal crisis and so everyone will have to share in the pain of cuts.  In so far as there is a glimmer of hope at the end of the tunnel, it lies in the belief that a crisis can be an opportunity to reform public services to get more for less.  Both these considerations ought to apply to health, it bears a huge share of public expenditure and no service area better represents the concentrated power of institutional and vested interest than the NHS.  Either public services need to be reformed or they don’t. It makes no sense to exclude the most expensive service of all from this process.  The exemption risks undermining reform elsewhere as well as forcing other spending areas to shoulder a disproportionate level of cuts.

It is a measure of just how big the other departmental cuts are that what looked a savage reduction in capital spending under Labour now looks likes an infrastructure reprieve under the new government – even though this still corresponds to a 17% cut in building projects.  The previous Budget’s projection of 10% cuts in non-ring fenced department spending now looks like the good old days, when compared with the 25% cuts which these departments will now face.

What the Budget lacked, and the Spending Review will have to provide, is a coherent public service reform narrative and strategy.  This points to a dissonance at the heart of the Coalition Government.  Whilst the Prime Minister has proclaimed the Big Society as the Government’s big idea, this is not mentioned anywhere in the 120 pages of the Budget statement.  Yet, if the Big Society is to have substance then surely it must be relevant to the fiscal challenge, otherwise it is just a nice to have decorative adornment to the age of austerity.

The spending review will need to develop a strategy for public service reform and transformation and not just for expenditure cuts. The challenge is even greater than that faced by countries like Canada, because the scale of potential cuts is greater and the expected level of economic growth is lower.  The question will be how can cuts on this scale be delivered without unsustainable public sector job losses, particularly in the north? And how can communities and neighbourhoods prosper and develop greater autonomy, when the support they will need to enable this will be under pressure as never before.  The spending review will need to put the emphasis on structural and institutional reforms and on building social productivity – focussing on neighbourhoods, service integration at local level,  more for less budgets for local areas and the social finance mechanisms which can enable scarce funding to be reprioritised on prevention and early intervention.  Without this, retrenchment will quickly turn into residualisation.

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Wednesday, March 3, 2010

Deep Impact

By Henry Kippin

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.

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Posted by Henry Kippin at 11:26 am
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Thursday, December 10, 2009

Borrow more, borrow now…

By Ashish Prashar

There was very little change in the borrowing figures in yesterday’s Pre-Budget Report, which is impressive given the turmoil of the last year. The Treasury also estimated that the cost of bailing out the two state-backed banks will now only cost £10bn and £50bn as previously estimated and the Chancellor promised the markets that the deficit would be halved in four years. However, he ducked the decisions on where cuts would need to be made and spending for 2010-11 will surge ahead as planned.

Now although deficits look bad it has been relatively cheap to borrow since the start of the recession and we’re probably now entering the beginning of a period where the rate for government to borrow will normalise as the recession comes to an end, therefore becoming more expensive.

So if government going to go forward with spending as planned and borrow more in the near future, it’s probably a good idea to borrow now and lock it in while rates are low.

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Posted by Ashish Prashar at 11:10 am
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Monday, June 22, 2009

The Trident Trade-Off

By Henry Kippin

Sarah Tusa writes in the Times today on the thorny problem of Trident – which crosses our path frequently as an example of a ‘quick-win’ initiative for those looking to cut the fat from public spending. David Davis wrote about this in the FT in April, following a pre-Budget publication from think tank Reform. He argued that

“There is no firmer advocate of nuclear deterrence than me, but even I have some difficulty seeing the justification for a wholesale upgrade of Trident. Our system was designed to maintain retaliatory capacity after a full-scale Soviet nuclear onslaught. Now our likeliest nuclear adversary will be a much smaller, less-sophisticated state. Should not the costs reflect that?”

Maybe so, writes the defence consultant, but there are serious trade-offs to think through in scrapping the proposed Trident upgrade, as today’s article makes clear. First is the question of how much such a move would actually save, and how this compares to other large-scale (and seemingly more worthy) initiatives:

“Estimates of £30 billion and over … combine the capital cost…with the annual operating costs for a 25-30 year life… On the same basis, a comparable civil project, the 953-bed Norfolk & Norwich University Hospital will cost not £229 million, as announced in 1998…but £16 billion, including PFI charges, staff and equipment. Any debate should at least be on an apples-to-apples basis.”

The second trade-off is about global status. Tusa’s argument is that failing to replace Trident would relegate the UK to the status of a “second-rank” European country, raising the spectre of losing its seat on the UNSC. On top of this, jobs are at stake – “at least 15,000…could depend on the Trident replacement.”

Whatever the politics of the piece (and I am certainly not convinced by some of it), we should welcome a more sophisticated debate about the choices that face the next Government. There will always be difficult trade-offs to negotiate, and it is bordering on the disingenuous to suggest that ‘quick wins’ are possible even for controversial initiatives such as Trident or ID cards. As the author warns, “there are no easy cuts left in defence”. But wherever the axe falls across Government spending, none of it will be easy.

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Posted by Henry Kippin at 9:56 am
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