1st May 2009
By Tash Shifrin
The government’s push for greater choice and personalisation of public services will be hit by the spending squeeze outlined in the Budget, the chair of a powerful Commons committee has warned.
Choice and personalisation have been central elements of the government’s public service reforms. But Chancellor Alistair Darling’s April 22 Budget speech made no mention of this.
Tony Wright, chair of the public administration select committee, said: ‘I do think we will hear a lot less about choice, personalisation, empowerment and all that bag of tricks, because they are the expression of a very well endowed public sector – and we’re not going to have a very well endowed public sector.’
He told an April 23 Public Finance round table on performance management: ‘In a sensible world we would start working out what we think the core functions of the state are.’
Colin Talbot, professor of public policy and management at Manchester Business School, agreed, saying: ‘Personalisation is dead in the water. I think it will only work in a situation where there’s reasonably generous resources available.’
It was ‘very unlikely’ that such a ‘flexible system’ could be introduced effectively in a climate of cuts, he said.
Talbot cited the costs of introducing systems, lack of economies of scale and lack of control when individuals assess their own needs. ‘I’ve never heard a convincing explanation of how you impose financial control on that,’ he said.
But Nigel Keohane, senior researcher at the New Local Government Network, said personalisation was ‘a way to drive efficiencies in the medium to long term’.
He cited pilots in adult social care, which had achieved savings of 6%–7% through better targeting of resources. ‘Instead of giving some people more than they need, you’re giving people exactly what they need,’ he said.
Darling set out plans to reduce planned resource spending growth in the three years from 2011/12 to 0.7% a year, while capital spending will be cut by 17.3% annually.
The Institute for Fiscal Studies warned that ‘plausible’ assumptions of the impact of rising debt interest payments and social security bills would mean a real-terms spending cut of 2.3% a year for Whitehall departments – a total of £26bn.
IFS senior research economist Gemma Tetlow told PF: ‘The figures pencilled in [for the three years from 2011] show public spending as a share of GDP falling from 48.1% to 43.4%. That decline equates to £66bn in today’s terms.’
The public sector must also return an extra £5bn of efficiency savings to the Treasury in the next two years and make further efficiencies worth £9bn a year by 2013/14.
Senior Labour backbenchers this week joined opposition politicians in questioning the future of other flagship government policies.
Former transport secretary Stephen Byers said the Budget had not done enough to reduce child poverty, while ex-home secretary Charles Clarke said the Budget lacked a ‘coherent sense of strategy’ on taxation and spending.
Former welfare minister Frank Field urged an ‘open debate’ on public spending.
