Labour MP Stella Creasy is calling for a complete re-think of public services. She told the Guardian’s Patrick Wintour that the twin pressures of debt and demographics mean that the old days of ever-increasing budgets will not return, even with a Labour government.
The whole idea that we can somehow manage this through salami-slicing does not match either the challenges we face due to demography or the financial mess the country will be left in. What does my generation of politicians do? Do we say, well, we will try our best to limit the damage, or do we say there is a new world out there, and it requires radicalism.
She’s right about the salami-slicing. This graph from the Local Government Association neatly illustrates what will happen if budgets are cut without a re-think of services.
As the budgets decrease, age-related spending and those activities that someone, somewhere at some time has deemed to be essential, start to push out all the other services. Each year, they are cut until there isn’t enough left to do anything worthwhile. According to the LGA, the green area covers such things as housing, culture, recreation and sport. If things carry on as they are, then, it will be libraries, parks and leisure centres that close. So much for that Olympic sport legacy.
You could probably draw a similar graph for many public sector organisations. Eventually, the must-haves and the sacred cows will close down other services by default.
Far better, says Stella Creasy, to start again from scratch with a complete redesign of state services. Under her “zero-budget” proposal, nothing would be ring-fenced and everything would be up for grabs. Spending, she argues, should be redesigned around what needs to be delivered rather than the organisation delivering it. Budgets should be pooled and the delivery of services in the future may not be done by the organisations that deliver them now. (Total Place anyone?)
As I keep saying, we are unlikely to see a return to the level of public service provision we have been used to. The state as we know it has peaked. The task of this decade must be to design a state that can cope with the next one. If we don’t, a lot of things are just going to stop working. It is extremely unlikely that efficiency alone can preserve public services as they are. The most we can hope for is that, if we are clever, we can stop 20 percent spending cuts translating into 20 percent service cuts.
There is indeed “a new world out there”. It’s one where Britain will see weaker economic growth, where tax revenues will struggle to keep pace with rising costs, where most of the people reading this will be dead by the time public debt returns to its 2007 level and where public sector austerity will be permanent. We are nearing the end of the state as we knew it. If they have looked at the figures, most politicians must know this. It’s refreshing, at last, to see some of them being honest about it.