Expect a relative lull on public service reform

19 Jun 17

Public services were certainly a factor in the election result and, with little authority, the government is unlikely to try major new reforms

What do you do when there is nothing you can do? Theresa May’s government has managed to emerge from a general election with a mandate for nothing much and the capacity to do even less. It is often said in the public sector that a period of quiet would be desirable and that might well be in prospect – if a shambles of a government with no authority can ever be said to be quiet.

The fate of the public sector was, unquestionably, a factor in the unexpectedly good Labour performance. An analysis by the GMB, a public service workers’ union, shows that the number of public sector workers is greater than the previous majority in most of the seats the Conservatives lost in early June. The patience of the public with spending cuts has run out. May signalled an end to austerity at least seven weeks too late. She needed to go into the election on a promise to restore some of the budgets that had been raided. Britain is still spending more each year than it raises and borrowing rates are about to rise –but the political reality is now clear. The restraint has to end.

The most obvious thing to do, because it is the easiest, is to give the public sector a pay rise. With inflation rising to 2.9%, the highest rate since April 2012, wage rises capped at 1% are hurting too much. Cuts to education budgets were a particular concern during the election and, in retrospect, the Conservatives were trying to defy precedent by improving their position in an election held at a time when living standards were falling.

The unions have submitted a request for a 5% pay rise and while that is a bit of a stretch, the government will surely move a little, even if that means adding to borrowing. The Tory party has a recent history of criticising Labour’s deficit reduction plans then carrying them out. The same may now happen with pay.

Elsewhere in the public sector, the government went into the election with few plans and came out with even those plans in tatters. The change of heart over the proposals to fund social care was an extraordinary campaign moment but it does leave the government without a viable policy. Meanwhile, social care remains a serious problem that is constantly feeding cost back to the NHS. There would be a parliamentary majority across the major parties to move forward on something close to the Dilnot proposals and May would be well advised to proceed on that basis.

The reason for doing so is not just that a tough problem needs sorting out after years of evasion and delay. It is that May’s last days in office (and her tenure is now entirely at the mercy of her party) will be marked by nothing other than Britain’s EU negotiations unless she devises distractions. Indeed, she needs to build authority in her own party by seeming to have a purpose so she must at least try. The trouble is that there is no mandate for any public sector reform and probably little prospect of getting anything through parliament, especially the Lords.

Michael Gove’s reforms of prisons were mothballed by his successor Liz Truss and David Lidington, the new justice secretary, will find it difficult to command a majority should he wish to revive them. The proposals for new grammar schools are surely dead. In political circumstances such as this, the government is bound to retreat into reforms that are already on the block that require no further legislation. That might mean more free schools, pushing hard on performance in the NHS and, if it is feasible, accelerating progress on universal credit. The stress will be on implementation because it will be all but impossible to do anything new.

Philip Collins will be speaking at the CIPFA conference on 12 July

  • Philip Collins

    chief leader writer and columnist at The Times. He tweets @PCollinsTimes

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