Looking back on the Great Train Wreck of 2013, some say it was ironic that a government that was formed to tackle a public finance crisis of one sort should have managed to create a quite different one of its own making. But, of course, it wasn’t just a public financial crisis, as public services plunged into chaos.
It all seems, in retrospect, to have been so inevitable and yet few really saw it coming – at least not on the scale that finally erupted.
First there was the disaster of Universal Benefit – more like No Benefit as it turned out. The idealistic IDS had been undoubtedly well-intentioned and the policy was, according to most analysts, not that bad, but it all went so terribly wrong. The mistake was obvious really – trying to reform and implement such a huge change to the benefits system of a whole country in under three years, and at the same time transfer it all onto the web and automate it, was a bit like John Kennedy announcing America would put a man on the moon within 12 months.
As launch day approached in October 2013 it was already apparent the new system was in trouble. There were enormous teething problems, and the government was throwing money at it like there was no tomorrow, which turned out to be all to true. When disaster struck it was easy to blame the initial botnet attack from cyber warriors, but as that abated it soon became clear that the system just didn’t work. And, worse still, there seemed to be no Plan B.
The old benefits systems were shut down and most of the staff that ran them were being laid off. Within a matter of weeks there were millions of families plunged into crisis and soup kitchens were springing up everywhere. The sight of William and Kate dishing out soup and rolls in Windsor was an image that will not be soon forgotten.
And, of course, the health service was also in complete meltdown. Services were being suspended as the whole of the NHS’s financial system spun out of control. GP consortia had lost control of the money – not surprising really as the populist ‘slaughter of the bureaucrats’ had left them with no-one who actually knew how to run a budget. (Some wags suggested it was a good thing that Universal Benefit had failed, because it meant the Treasury at least had the money to fund the massive NHS overspend.)
But, of course, despite the overspend, services had been so badly dislocated that they weren’t being delivered. Waiting lists soared, and A&Es started to look like something from the Crimean War. Nobody died – well, probably – but the general air of crisis ratcheted upwards another notch.
Education didn’t fair quite so badly, but the rash of scandals in the so-called ‘free schools’ added their bit to the general air of chaos. Over 100 schools were now under investigation for fraud – although ‘investigation’ is probably putting it a bit strongly, as the mightily stretched police didn’t have much to spare for this particular problem.
Unemployment had remained stubbornly high and, although it hadn’t gone stratospheric, unemployment amongst the young was a disaster. As the universities shed more and more places, removing that possible escape route, the pressure-cooker effect on the young was predictable. When the Great Benefits Disaster struck and even their meagre rations failed to materialise, it was only a matter of time before the inevitable happened.
It was a shame about the Trafford Centre, but in retrospect it seems so obvious that the ‘flash-mobs’ would target such places and it would get out of hand. The reduced police forces didn’t stand a chance and the fire services didn’t have enough engines for such a large-scale event. By the time enough engines got there from elsewhere in the country it was way too late.
But what finally created the real catastrophe was the collapse of the HMRC systems. Because, of course, they had rushed to try and update them so they could support the Universal Benefit system – real-time benefits depended on a real-time income tax system. What nobody realised was that the eventual collapse of the UB system could ‘flash-back’ and take the income tax system with it.
It took six months to sort out and in the meantime the Treasury lost both cash-flow and suffered a permanent loss of billions of pounds of income tax. The financial markets and credit rating agencies reacted as you might expect, and interest rates for the government (and everyone else) soared. The rest, as they say, is history.
Of course, the country sorted itself out, eventually. We always do – ‘Keep Calm and Carry On’, indeed. And the coalition? Well, that’s another story…
Colin Talbot is professor of public policy and management at the University of Manchester Business School. This post first appeared on Whitehall Watch
