Running to catch up, by Tony Travers

7 Jun 07
Is New Labour's modernisation agenda for public services anywhere near endgame? Tony Travers surveys the progress so far and asks whether a Brown government should slow down or speed up the pace of reform

08 June 2007

Is New Labour's modernisation agenda for public services anywhere near endgame? Tony Travers surveys the progress so far – and asks whether a Brown government should slow down or speed up the pace of reform

'Modernise' has been one of the most enduring buzz words of the past decade. The Blair years, however progressive in appearance, have had an obsession with applying the slightly old-fashioned word 'modern' to aspects of local government, the NHS, policing, the fire brigade and, indeed, pretty well every other public service. It is as if the ghost of Harold Wilson has infused the post-1997 government's rhetoric with a word used previously to describe Concorde or decimal currency.

Repetition has hardly added depth or meaning to the word. New Labour has demanded modernisation as the price of increases in public expenditure. Ministers wanted to pump cash into health and schools to show they were Left-leaning. But they also wished to make clear they were not part of the failed Labour tradition of the 1960s and 1970s.

Tony Blair has used the notion of modernisation to suggest not only that services should be efficient, but also that the public should be able to choose between providers and, indeed, that antique work practices should come to an end. The use of private providers – directly or to achieve 'contestability' – has been seen as another element in modernising services. Like all such abstract concepts, it has been stretched and extended over the years. This flexibility of meaning makes it hard to be sure where modernisation has got to. Indeed, the Blair years have suggested that it is a pretty-well continuous process. What was modern in 1998 might not be by 2008.

The services that have most clearly been modernised – at least, in Blairite terms – probably include the fire service, local government and, possibly, prisons. The NHS is more difficult to call. Large sums of money were spent on paying for changes to terms and conditions, although evidence such as the collapse of out-of-hours GP provision suggests the impacts were far from best modern practice. The police service has added community support officers, but otherwise has not been radically altered in terms of its working practices and organisation. Schools are funded slightly differently, but otherwise operate in broadly the same way as in 1997. Universities now rely in part on top-up fees, but this has not significantly affected the nature or quality of provision.

The near-impossibility of measuring productivity in Britain's public services does not make assessing the impact of modernisation any easier. If we knew, for example, that productivity were maintained or improved as additional resources were put into schools or hospitals, it would be easier to make a fair judgement about the various policies used to reinforce modernisation. But as we cannot measure education or health productivity, we cannot assess whether the additional money has been used effectively.

Targets and performance indicators are probably more useful. The achievement or otherwise of outputs demanded by targets or Public Service Agreements would – assuming official statistics are credible – give a clue as to whether or not there have been any improvements. Performance measures are better still. They show, for example, that waiting times in hospitals are down, school examination results have improved, child poverty has been cut and crime has fallen.

Similarly, assessments made by inspectors and auditors have been among the more reliable ways of judging how far Labour's promises have been delivered. Local government's Comprehensive Performance Assessment scores have improved and show most councils are providing services to a high standard. Other regulators have revealed failure and encouraged success.

Finally, Private Finance Initiative and public-private partnership deals, however unpopular they are with many public service providers, have allowed the Treasury to feel comfortable with the rapid growth of new building across the NHS, schools, prisons, roads, transport and elsewhere. Hospitals and schools provided by the private finance route, however difficult it might be to prove their long-term costs and benefits, are seen within the core of Whitehall as part of the modernised state.

Thus, the overall impact of public sector modernisation after a decade of Labour government is muddled. No one in the Treasury, Number 10 or most service departments would claim that Britain has achieved modern public services. But, equally, it would be wrong to argue that many improvements have not been made. The problem in providing a hard and fast answer to the CIPFA conference question: 'Are we there yet?' is that it was never particularly clear where we were going.

Gordon Brown's grand leadership tour has thus far not provided much new evidence about his soon-to-be government's approach to public services. It has become a cliché to say that Blair's domestic policy has largely been run by his chancellor. But it is also significantly true: no aspect of PFIs, public sector pay, NHS reform, Gershon efficiencies, schools funding or the pending structural reform of local government have fallen beneath the Treasury's radar.

The Institute for Fiscal Studies has provided us with a clear view of what this autumn's Comprehensive Spending Review will offer the public sector. There will be real-terms spending increases for the NHS and schools, though at a rate far short of the years from 2000 to 2007. Other services, including much of local government, police, fire, transport and the arts can expect zero in real terms – and probably for at least two spending review periods. Defence might win a little more than a standstill, but not much.

Thus, Brown as prime minister will in his early years preside over public services that are being squeezed by pay pressures and the threat of 'cuts'. In place of the expenditure increases of recent years, it is likely he will offer constitutional reform and, possibly, new options for modernisation of services.

It is impossible to be certain how far any attempt at reforming the British constitution would get. Such changes would require the Opposition to agree to them. It is also not immediately clear that Britain could ever determine a formal, written, constitution. Vast effort would be needed to get from our current position to one where there was a permanent, legally enforced statement of how the people and various organs of the state related to each other. Moreover, many commentators and politicians are opposed to a formal constitutional settlement, preferring the fluidity of the 'unwritten' arrangements that have evolved over 1,000 years or more.

A constitutional review would have to consider, among other issues, the position and independence of the judiciary, all aspects of the House of Lords, devolution, the position of local government and human rights. It might also have to embed a statement of the extent to which there should be regional government in the nations and regions of the UK. The asymmetry of devolution to Scotland, Wales, Northern Ireland and London has been such that words would have to be carefully chosen unless, that is, it were decided to move to full regional devolution for England.

Local government would need to argue its case carefully for inclusion within any constitutional settlement. Once a position is set, it would be hard to change it. Thus, for example, any constitutional legislation would have to include councils' rights to set local taxation. Would this be one or more taxes? Would the centre be given the right to limit this freedom? If the constitutional law allowed the centre to override local freedom, we would be no further forward than in the existing capped system of local authority funding.

The past month has seen the Blair government publishing its final policy statements. We must assume Brown accepts the tone and content of the white papers on the planning system, energy and waste, and the draft Local Transport Bill.

Certainly, the planning document was a leading indicator of the incoming prime minister's views about the sclerotic nature of the existing planning system. Major projects such as airports, wind farms and nuclear power plants have to be built and the planning system will, under Brown's leadership, be reformed to accommodate this need.

The government's waste proposals, on the other hand, showed a touching concern for localism. While Whitehall remains concerned about the problem of Britain's generation of rubbish and the need for landfill, the consultation document showed remarkable local sensitivity, preferring to allow councils to decide where and how to encourage households to change their behaviour. Given the Daily Mail's activism on this subject, it is easy to see why ministers are happy on this occasion to let councillors make the difficult decisions about bins and the need for charging.

The draft Local Transport Bill suggests that the Department for Transport is going to move ahead with new forms of city-regional government. The government will be given the power to require proposals for the strengthening of the institutions that run transport, either in metropolitan areas or elsewhere. There is a strongly pro-city-region (and, indeed, pro-local) flavour to these proposals, which would also give authorities greater powers to determine local bus services, tramways and road pricing schemes.

Thus the early shape of Brown's government can be inferred from the white papers published at the end of Blair's decade. There will be more powerful and top-down determination of major policy, but only where ministers are certain they can avoid the odium caused by potentially unpopular policies such as waste collection or road pricing. Even the planning proposals would give the say over major projects to independent commissioners, not politicians. There is a strong sense that government needs to lead, but less certainty that the public trusts politicians sufficiently to accept their leadership. Indirect Stalinism, perhaps?

Other major issues that will have to be addressed in the new prime minister's 'first 100 days' include the future of the NHS and how far 'personalisation' can be made an alternative to the Blairite choice agenda. Brown appears to have ruled out an independent NHS board, but the grumbling concern about the health service's finances (last year deficits, this year a possible surplus) means the issue will not disappear. Blair's desire to introduce choice and competition into public services might be sidelined, but the government remains committed to ensuring services are tailor-made for individuals. How can this be achieved without heavy central intervention?

Whitehall will be reorganised. The Home Office has already been chopped in two. It is possible the Treasury could be reconfigured, separating financial management from economic affairs. The Department of Trade and Industry is surely destined for oblivion. Communities and Local Government's future might depend on what other reorganisations take place. Regional policy might be grouped into a single unit. At the core of government, the layout of the Cabinet Office, the Number 10 Policy Unit and other parts of the sprawling Blair machine will inevitably be redesigned. The reorganisation of public sector regulators has not been completed, either.

But as the Blair era finally draws to a close, any rational analysis of the future of British public services will conclude there is a limit to what can be done differently. So many reforms have been tried during the continuous revolution of the past decade, not to say the past 30 years. As Brown surveys the full extent of his new empire, he might wish to consider whether he really wants to be yet another reforming prime minister, or alternatively, if he would prefer to consolidate. Can we really stand any more modernisation?

Tony Travers is the director of the Greater London Group at the London School of Economics. He will be speaking on 'Surviving the Comprehensive Spending Review' at the CIPFA conference in Bournemouth on Wednesday, June 13


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