30 June 2006
There is a lull in Westminster, as if everything is waiting for the next PM. For many in the public sector, this represents a welcome rest from a breakneck whirl of reform – but not for local government. Tony Travers reports
A strange and eerie calm has settled over the public sector. Except, of course, at the Home Office, which is being subjected to the kindly attentions of Dr John Reid. While the immigration directorate, prisons, the probation service and the Human Rights Act are being made 'fit for purpose' by the home secretary, the rest of central and local government appears to be adrift without any particular sense of direction.
The main reason for this lack of direction is the curious interregnum through which we are living. Tony Blair has presided over nine years of 'modernisation' affecting virtually all the public services. Huge amounts of cash have been ladled into the NHS and schools. Targets and other performance drivers have been imposed in great number. Local government has had Best Value, New Localism and now 'double devolution' visited upon it. Inspectors have been created and then reformed. Even the word 'initiativitis' has become a cliché.
But the present PM has signalled his own end. He will not serve beyond 2008, and possibly only until some time next year. The decision to stand down before the next general election has had a number of consequences, not the least of which is an addicted fascination within the media about when, precisely, the end will come. But there has been another, less expected, consequence: we are in a lame duck period where, across the policy-making world, everyone is awaiting the next prime minister, and the received wisdom is that it will be Gordon Brown.
The problem has been made worse by Blair's recent Cabinet reshuffle. Nowhere was this factor more obvious than in local government, an issue that will doubtless be much discussed at the Local Government Association's annual conference in Bournemouth next week. After a year of learning, talking and listening, David Miliband was just about ready to publish a white paper outlining his ideas for the future of local government. His removal to Environment, Food and Rural Affairs means a new secretary of state has, understandably, decided to start again. Ruth Kelly will, it is now believed, publish a consultative paper in late autumn.
But even when Kelly has decided what she wants to say, there will then be a consultation period, which would take us towards the middle of 2007. By then, speculation about Blair's demise will either be reaching a further zenith, or he will just have gone. Either way, there must be a fair chance that yet another minister will inherit local government, doubtless in another department. If this happened, it is difficult to see an October/November 2006 local government paper being the basis of policy from late 2007.
The same will be true of Sir Michael Lyons' report, due in December 2006. This too, will require a consultation period into the middle of 2007, by which time all bets are off. Indeed, a number of commentators have speculated that Brown, if he were to become prime minister, might introduce radical policies for the regions and local government. The very fact that there might be major reforms just after a new prime minister took office will have the effect of reducing policy activism during the rest of 2006 and most of 2007. This vacuum leaves local government in limbo once again.
To make life just a little more uncertain, the Conservatives are trundling along nicely in the opinion polls. No one any longer writes them off as the obvious losers of a 2009 general election. Indeed, a number of senior Labour figures now appear to believe a Tory government is virtually inevitable. We will all be paying far more attention than before to any ideas emerging from David Cameron's policy groups.
Moreover, the Local Government Association is also evolving. Political and officer leadership has changed. There has been a significant shift towards the Conservatives in recent years' local elections. New chief executive Paul Coen will be stalking the land in the months ahead, taking the temperature of his member authorities. It is possible that the LGA will be lobbied to adopt a more adversarial approach towards central government, particularly if there is seen to be endless delay at the centre in arriving at a firm set of proposals for the future of local government.
The policy and political drift within the government and Whitehall will become problematic over the next year. If Blair decided to stay on well into 2008, it seems unlikely that his government would be able to do much more than concentrate its remaining strength on the key issues of schools' reform and the NHS. Certainly, these are the services that he has claimed will be the main elements in his legacy.
It is, incidentally, fascinating to contrast the British prime minister's desire to be judged by the success or failure of public service reforms with French president Jacques Chirac's chosen legacy project – a £150m museum of indigenous art which, he promised, would inspire 'peace and tolerance' in the world. All very revealing.
The kinds of issues that will be left untouched in the next year or so include the future of local government, but also such questions as how much further the private sector will be encouraged to run public services, public sector pay (bubbling up nastily) and whether or not Britain has really reached the zenith of possible centralised government. Reforms designed to increase trust in politics and engagement in the political process will also languish.
Speculation about the end-point of the evolving Raynsford-Miliband-Kelly examination of local government has already been intense. At this week's Core Cities conference, city-regions were given a rhetorical boost by the new secretary of state. It seems likely that some form of 'double devolution' will continue to interest the centre, which in turn means a significant move towards parish or neighbourhood government. No one has yet been able to outline a detailed example of a model that would allow a new elected tier of neighbourhood government, complete with access to council tax and the capacity to deliver services. Most proponents of the ultra-local model talk vaguely about 'rights of initiative' or of polling-based service demands. If a proper decision is to be made about this issue, someone will have to describe, in detail, what the new units of government would actually be able to do.
Then there is the other level of the 'double' part of the proposed model. The government will have to decide what powers and responsibilities it is willing to pass downwards to local authorities. Again, purring gentle words about Local Area Agreements is all very well, but it is still not clear how far the whole of Whitehall would be prepared to go along with a radical form of service (and resource) pooling. The Department for Communities and Local Government and their Office of the Deputy Prime Minister predecessors are the good guys here. But the service departments have always been less enthusiastic.
Private sector involvement in public provision is another sphere of policy where we are likely to see drift. It is clear that Blair sees no barrier to private providers delivering virtually any service. Brown probably holds the same view, given his enthusiasm for the Private Finance Initiative. But Alan Johnson? David Cameron? For the time being, decisions about the use of private providers will continue to be made on a one-by-one basis, without any clear steer from the centre. However, a new prime minister might decide to state explicitly what kind of balance should be achieved.
Public sector pay, like the public finances more generally, is moving towards a period of unguided turbulence. We will have to wait until the summer of 2007 for the next Comprehensive Spending Review – barely six months before public providers will set their budgets for 2008/09. There are few detailed spending plans beyond 2007/08. What is already clear is that the chancellor wants public sector pay moderation to compensate for lower growth in public expenditure in the years ahead. This spring's local government strike (albeit about pensions) was not an encouraging omen, particularly if a significant gap opens up between private and public sector pay. Civil service pensions also look to be a new source of dispute.
Drift in government will additionally affect the drive to reconnect politics to the electorate. The genesis of the government's neighbourhoods and communities policy lay in a realisation that turnouts were declining and, ominously, polling suggested trust in political institutions was in decline. Other constitutional policies, such as the attempt to reform the House of Lords, are intended to enliven democracy. But it is hard to see how it will be possible for Blair to deliver in his last few months in office what he has failed to do for almost a decade.
In fact, turnouts in local elections have started to rise, albeit modestly. But this does not mean the battle to attract people back to politics is won. Far from it. The baleful decline in the major parties' memberships and the consequent difficulty in raising any money show just how bad things have got. Recent Mori research suggests British people are optimistic about their personal circumstances but cynical and pessimistic about government.
The need to increase political engagement will fall to Blair's successor. Whether constitutional reforms and/or neighbourhood government will be the solution, only time will tell. The trouble is, we do not really know how the 42% of the economy that falls within the public sector – or for that matter, the 58% that doesn't – will be governed from now on.
Britain really is living through an interregnum. Only when there is a new prime minister and government with a firm mandate will it be possible to start the process of sorting out the muddle that now faces us. Given the criticism of the present government's over-fondness for initiatives, a period of calm might be thought to be a good thing. A little less legislation would, for example, be unlikely to damage criminal justice.
There are certainly a number of other areas of public life where a period of calm reflection would be welcome. But there are others, notably local government, where reform is seriously needed. The English system of local authorities and their funding has been tampered with to the point of serious damage. There is a risk that unless an effort is made to increase autonomy, the public will continue to hold central government responsible for every aspect of every service. Councils will be treated as no more than agents of the most centralised constitution in the developed world.
Even when we arrive at the end of the power vacuum, there is the question of whether or not the new prime minister will have the instincts to deliver real change. Blair has been robust in foreign policy, but less sure on domestic issues. Brown is largely unknown and untested beyond the Treasury. After nearly a decade in the political wilderness, the Conservatives are even less easy to predict.
Over the next year or so, it will be important to lobby Brown's policy-makers and also Conservative and Liberal Democrat rethinking. The interregnum brings with it an advantage: there has not, since the late 1970s, been a period of such opportunity to push forward new ideas. Politicians are desperate to find ways to move on from the position they now feel trapped in.
There are alternatives to the Thatcher-Blair ideas and government models that have dominated British thinking for 30 years. This is not to say that everything is now bad. Britain's economy remains reasonably robust. The private sector seems broadly creative and successful. But the public sector does require a single, sharp, period of change to allow more decisions to be made beyond the centre. It is not only local government that needs devolution.
Normal service will, at some point, be resumed. But when this occurs, it is important that the direction of reform is away from centralisation and towards a greater degree of local (not to say personal) choice. Blair might be approaching his final days in office, but he is right about one thing: public services that are not up to standard risk alienating taxpayers. Encouraging a more decentralised democracy might just solve a number of problems at once. The alternative certainly hasn't worked.
Tony Travers is the director of the Greater London Group at the London School of Economics
PFjun2006
