Public services: Stalin meets Enron

The UK government throws some cash at education and hospitals – and we’re supposedly witnessing a new wave of social democracy.

UK chancellor Gordon Brown’s much-vaunted spending review of 15 July 2002, in which he pledged £61billion to public services, was hailed as the largest cash injection into the public sector since the 1970s. This seemed to mark a radical departure from the decades of Tory squeeze and half a decade of New Labour tightfistedness. In fact, it represented a more radical departure from the traditional ideals and principles that underpinned public services.

Even in New Labour’s terms, this spending review did not represent a big idea, or anything remotely risky. ‘[O]ver the economic cycle we will not only meet all our fiscal disciplines and rules but we are on track to meet our fiscal disciplines and rules with a margin for prudence even on the most cautious case, even on the most cautious assumptions’, insisted Brown (1). Can anybody imagine Nye Bevan using that kind of language to justify the creation of the NHS? Brown’s speech went on in a similarly passion-kindling thread.

‘[T]he role for government’, Brown said, is to ‘enable and empower people to make globalisation work for their families and their future’ (2). Some commentators, who have previously castigated New Labour for failing to deliver the cash to make its principles work, have bemoaned the lack of ideology in this week’s spending review. Yet this view, of government as therapist-cum-financial adviser, is as neat a presentation of New Labour’s ideology as you are likely to get. And it makes for an interesting approach to public services.

Whatever else could be said of the public services created by Old Labour, they at least involved a concept of the public. The welfare state was born out of the postwar compromise between the competing political ideologies of socialism and the free market, the aim being to curb the worst excesses of the market and their effect on the working class. In mediating between the elite and the working class, the welfare state institutionalised a concept of the public, of society, in an economic system that was predicated upon the individual.

By contrast, New Labour’s interest in the public services is not in mediating between social classes, but connecting with individuals at the level of their personal, short-term priorities. Health and education come first, not to address a public concern with social inequalities, but because people take their own health and their children’s education very personally. You can forget governments transforming society through politics, institutions or the economy – the government is just a mediator between individuals and the market.

New Labour has no intention of going back to the old days of social democracy and welfarism. But it recognises that, by orientating public services around individuals, something has been lost. Once the public sector lost its ideological backbone, the question became – why would anybody work for it? There is no public service ethic – nothing that encourages people to become teachers, doctors, nurses, council workers because they believe it to be in the public good.

And New Labour has tried to compensate for this by emphasising the ‘services’ part of the equation, and focusing on efficiency, competition, individual incentives and consumer orientation. The trouble is, that has made things no better; and the spending review seems destined to make it worse.

Gordon Brown made much of his intention to ‘promote choice and devolve responsibility, authority and flexibility from the centre out to local and regional decision-making – to primary care trusts, headteachers and governors in schools, police commanders, and local service providers’ (3). Implicit in this is a recognition of the major problem with today’s public sector, for which New Labour has been criticised from across the political spectrum: the demoralisation, bureaucracy and paralysis caused by the government’s attempts to micro-manage, from the centre, every local service.

For an article published to coincide with the spending review, commentator Jonathan Freedland took himself off to Luton: ‘model New Labour territory, a living, breathing testbed of the entire Blair-Brown project.’ (4) Freedland quotes Janette Smith, headteacher of Lealands high school: ‘This government has put more money into education.… The problem is, it’s always been tied up.’ Stephen Ramsden, chief executive of Luton and Dunstable Hospital, shares her concerns. ‘The motivating power of being left to run your own affairs should not be underestimated’, he says. ‘We need freedom to deliver. Just let us get on with it.’

As Freedland points out, these people do not have a political problem with Blairism: they are ‘pin-ups for the New Labour way of doing business’, ‘modern managers whose guiding light is not ideology, but efficiency’, and ‘each one speaks with a technocrat’s focus on a simple, pragmatic goal’. Yet even when the government is dealing with good Blairites such as these, and when it recognises the need to give public service bosses some autonomy, it just cannot bring itself to let go. Why?

After five years under Blair, it is fashionable to blame the current government for everything: but the public service ethos was eroding way before New Labour got there. New Labour’s orientation of the public sector around central government priorities was a response to existing fragmentation and disorientation. But its constant interference in the micro-management of the public sector, and the reaction to that, is indicative of the fact that targets, audits, reforms and incentives cannot compensate for the lack of a political ideology. And the government is painfully aware of that.

The apparent control-freakery that New Labour exhibits at every turn reveals the extent to which it feels out of control – of everything. A government with confidence in its big decisions would not feel the need to micro-manage every little decision. It is also testament to its lack of confidence that New Labour has spent its political life reforming – leading to a constant churn in the public sector, particularly in health and education, where no sooner is one change implemented than another is brought in, with a new layer of bureaucracy needed to oversee it.

Lacking faith in any single one of its ideas, the government seems to believe in a quantative approach: the more different, often conflicting changes you make to something, the better. In reality, as we know, it leads only to confusion, cynicism and resentment on the part of both the staff and the public.

In a scathing editorial on 16 July, the Daily Telegraph commented: ‘power will be “devolved” only to those headteachers and hospital managers who do his bidding. Those who fail will be named and shamed, and in extremis sacked. That’s independence and devolution for you, Brown-style.’ (5)

This process has, to a large extent, already taken place – the government has painstakingly built a professional elite out of managers prepared to puts its ideas into practice and carry out its reforms. Yet New Labour has so little confidence in its own ideas and reforms that it cannot bring itself to trust even the new elite. Instead, it transforms public service bosses effectively into middle managers, to whom it attempts to devolve blame when things go wrong.

The only thing that New Labour has demonstrated any faith in so far is accountancy. The relentless process of audit and inspection has, of course, done wonders for education: transforming it from a sphere of life in which teachers teach and pupils learn into a goldfish-bowl of measurement, calculation and data-inputting, in which everybody is forced to think not about what they are achieving, but how to meet the random targets sent down from on high; not about what they are doing, but how it will look on inspection day.

Now, Gordon Brown proposes to extend this process across many other sectors: ‘[W]ith independent audit and statutory inspection, departments and agencies will be fully accountable for performance against targets: so in addition to the new police standards unit, we are creating the new health and social care inspectorates and a reformed criminal justice system inspection regime and a single housing inspectorate.’ (6)

God forbid the police fail to meet their mobile-muggers target, the health service fails to meet its safe-sex advice target, or the criminal justice system fails to meet its locked-up-for-life target – things could get quite dangerous out there.

But – who’s going to audit the auditors? ‘[I]n the light of Enron’, said Brown, ‘the secretary of state for trade and industry will put before the house the interim report on accounting and audit reform’ (7). Now the government lacks confidence even in its beloved system of targeting and measuring, the public services seem likely to end up in a constant cycle of measuring, checking, re-measuring, rechecking…to the point when one wonders how they will provide any service at all.

The spending review represents a breathtakingly accurate balance-sheet of New Labour’s economic, political and ideological priorities. And the sad truth is, it doesn’t add up to much.

Read on:

spiked-issue: Economy

(1) Full text of Brown’s spending review, Guardian, 15 July 2002

(2) Full text of Brown’s spending review, Guardian, 15 July 2002

(3) Full text of Brown’s spending review, Guardian, 15 July 2002

(4) Thanks for the money, now set us free, Guardian, 16 July 2002

(5) Spending in order to control, Daily Telegraph, 16 July 2002

(6) Full text of Brown’s spending review, Guardian, 15 July 2002

(7) Full text of Brown’s spending review, Guardian, 15 July 2002