Thinking outside the Budget box

29 Feb 12
Henry Kippin

To achieve economic growth, the Chancellor needs to come up with a new narrative on the relationship between the public and private sectors

In the Times this week Rachel Sylvester talks in typically forthright style about an ‘abattoir administration for the austerity age’ – evoking a government that risks ‘wielding the knife for the sake of it’ without articulating the long term aims or results.

Few front-benchers would agree with that, but I guess that is exactly the point.  We are indeed seeing a mix of harsh cuts and retrenchment, and also innovation, creativity and reform.  But it spikes in different directions, is fragmented in nature, and is not held together by a coherent central narrative or set of goals.  This is partly in line with a coalition ideology that prefers laissez-faire to collective planning.  But as the article suggests, it is also about a failure to articulate a long-term vision beyond the vague promise of sunnier times (presumably administered by a smaller and more market-imbued government).

Both government and opposition are understandably being kicked around by events.  Fiscal constraint looms over the coalition’s social programme, but beyond this baseline there is very little consideration of how economic growth and public service reform could be considered as mutually reinforcing pieces of the same vision.  The opposition has gone back to the drawing board on long-term economic development and industrial policy, but risks undercutting its thinking without a more tangible link to the public service reform agenda that is being radically reshaped by the coalition.

At the core of any strategy for recovery and renewal should be a conjoining of the public service reform and economic growth agendas.  They are too often considered separately, and too often couched in simplistic terms of the private economy as generator of wealth, and public agencies as spenders of it.

So my suggestion is that Cameron, Clegg and Miliband need to start thinking more obviously about (1) how to encourage a shift in the public sector towards public entrepreneurship and the productive capacity of public services, and (2) how to encourage a shift in the way we understand government-business-society relationships over the long term.

A forthcoming report from the RSA 2020 Hub explores these ideas in some depth, but in essence they reflect our own over-arching narrative of social productivity. Social productivity is about rebalancing and re-socialising the relationship between citizens, public services, the private sector and civil society; unlocking the state’s capacity to catalyse and nurture enterprise; and re-aligning public services to build social capacity through quality, co-productive relationships.

It an ambitious set of goals, though we are working with local authorities, public bodies and businesses who are already acting on them in a long-term and strategic way.

Public services will become increasingly fragmented and disjointed without a shared narrative or shared purpose holding them together.  This does not mean central control or top-down social planning – just a sense that disjointed reforms to funding, distribution and delivery in different areas share an interrelated set of goals and a realistic account of how their relationships with citizens will build social capacity and resilience over the long term.

This cannot be done without creating a narrative for public service reform as a whole, and it cannot be done without seeing this narrative and that of economic growth as mutually reinforcing parts of the same programme.  This is a challenge for next month’s Budget, but also above and beyond.

Dr Henry Kippin is a partner at the RSA's 2020 Public Services Hub

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