Localism was a New Labour mantra, and is something all the major parties subscribe to in theory. But Ed Miliband is rebranding the concept to make it fit for an age of public sector austerity
This week, Ed Miliband has started to fill a major gap in Labour’s policy prospectus: public service reform. Ever since the economic crash Labour has perhaps understandably focused on the economy and living standards. However, given the state of the public finances, all parties must show that they can deliver better services at a time of shrinking budgets.
One important means to achieve this, as Miliband will recognise in the speech he delivers tonight, is to break up the power of England’s centralised state. As the IPPR shows in a major new report published this week, we face a growing range of complex social problems, including long term unemployment, chronic disease and anti-social behaviour, that cannot be effectively tackled by delivering services in centrally controlled silos from Whitehall. This is true both of services run by the state and of those contracted out to big private providers.
Take for example the failure of the Work Programme to help the long term unemployed who are sick or disabled into work. This programme contracts out employment services to private companies who are paid for getting claimants into jobs. However those providers have no control over the things which prevent many of the long term unemployed finding work, such as low skill levels, mental health problems, family problems and so forth. To tackle these complex cases employment support needs to be integrated with other services locally. This requires a devolution of these budgets out of Whitehall and towards England’s towns and cities.
Devolution also creates the space for much more creative solutions to the problem of shrinking budgets. Rather than salami slicing off departmental budgets at the centre, the next spending review should push service budgets down to city regional and local authority level. These budgets can then be pooled together and, combined with longer five year financial settlements, funding can be brought forward to invest in preventing problems from occurring in the first place. So, for example, by bringing together health and social care budgets, local areas can invest in supporting older people to stay safe in their homes, rather than paying for avoidable and expensive hospital visits.
But empowerment means more than just taking power from Whitehall and handing it to town halls. Local authorities, schools and NHS trusts can also be unresponsive to citizens, meaning that service users themselves need greater direct control. Sometimes this can be at the individual level, such as with personal care budgets which have unquestionably improved the autonomy of many elderly and disabled people in receipt of care. These should be expanded, where patients want them, to include personal health budgets for those suffering from chronic diseases.
But choice alone is not enough. There also need to be opportunities for citizens to collectively challenge poor provision: taking your child out of a school, where they have developed close friendships and which may be closest to home, is hard to do. Parents need to be empowered to challenge poor standards together: parents should also be able to petition new school commissioners, at city regional level, to intervene to raise standards.
These reforms will not be easy. For one thing, they require a break with our highly centralised political culture and day-to-day ministerial interventionism. Sceptics will point out that opposition parties have promised ‘localism’ before, only for it to disappear once politicians are ensconced in ministerial office. However, what is new is the unprecedented nature of the financial pressure on government departments: this means that across Whitehall and across all the political parties, people are looking seriously at the more creative possibilities that devolution creates.
Significant devolution will also require a strengthening of our layers of local governance. Ever since John Prescott’s failed attempt to bring in regional assemblies, England’s regional and local governance has been fragmented. There are however promising signs: in the North East and Greater Manchester local authorities are coming together to create Combined Authorities, that at a bigger scale can credibly be devolving budgets in areas like transport, housing, welfare to work and skills.
None of this will be easy: politicians and mandarins will have to give up power, and more personalised services will require citizens to play a greater role. But we have little choice if we are to find more creative ways of dealing with austerity and tackle the more complex challenges we face.
Rick Muir is associate director for public service reform at the Institute for Public Policy Research. IPPR’s new report ‘Many to Many: How the relational state will transform public services’ will be published on Wednesday
