Andrew Haldenby is the director of the independent think tank Reform.
Today Reform publishes a scorecard on how each of the big spending departments, plus the Cabinet Office and the Treasury, is shaping up against the Government’s own principles of reform.
In my view the Prime Minister has been absolutely right to say that its reforms will be based on the following principles: accountability to the user, flexible delivery (by charities, public sector or private sector) and value for money. These principles are right because the last twenty years' experience in the UK shows that our problem is over-active government, arbitrary rules on who can provide public services and over-spending. By setting out these principles, David Cameron has sought to give the whole reform package coherence and force, so that the whole is greater than the sum of the parts.
Just as importantly, the Government has said that it will make structural reforms, not incremental ones. It wants to avoid “halfway house reforms” which make a bit of difference but leave the great majority of provision untouched and then get swept away. The last Conservative Government achieved fully 1,000 grant maintained schools, arousing a storm of opposition and duly abolished in 1997. The Blair Government achieved nearly 100 academies – which lost their key freedom (over curriculum) in 2007. The Blair Government achieved a few dozen Independent Sector Treatment Centres in the NHS which were furiously opposed and in due course the Brown Government ruled against NHS private provision full stop. This Government is absolutely right to look for structural changes that bring the benefits of reform to the many, not the few.
David Cameron’s problems lie in the policies that his spending departments have delivered. One at least is on course. The Home Office’s policing reforms are a model package. Theresa May is making police services accountable in the right way, to their local electorates. She is conducting an independent review of the pay and conditions of the police workforce. And Ministers are arguing that the police should deliver value for money and that there is no simple link between extra resources and lower crime. If anyone wants to see how to do it, look no further.
The mid-ranking departments include Communities and Local Government and the Department for Work and Pensions. Both have embarked on major reforms to improve accountability: respectively, to link local taxation and local spending, and to end the payment of universal benefits to better-off people. The Treasury has made the right call on the big question of reducing the deficit though it has undermined the Government’s commitment to value for money by ring-fencing certain public sector budgets.
The other departments are lagging behind. Despite much rhetoric to the contrary, neither Health nor Education have dismantled central regulation and made services properly accountable to their users. Defence has failed to reduce the nation’s strategic ambitions in line with reduced budgets. The higher education reforms do not provide significant extra freedoms to institutions. The Cabinet Office has made one of the strongest attacks on the reform programme by deciding against making the Civil Service accountable. (This evidence to the Public Administration Select Committee shows that the new departmental boards will not hold Permanent Secretaries to account.)
What should be particularly worrying to the Prime Minister is the degree of inconsistency between his departments’ policies and sometimes within them.
For instance, some departments want an open competition in public service markets while others want to favour mutuals or social enterprises or small firms. Some departments are arguing that resources do not equal results while others have guaranteed spending increases. The Department for Education wants more academies that are free from the National Curriculum yet wants to impose a National Curriculum on the vast majority of schools. The Department for Work and Pensions will means-test Child Benefit but not any other universal benefit.
The Coalition may argue that these inconsistencies are good politics. In fact they are bad politics because they undermine confidence that the Government is serious about reform. They are a gift to the opponents of reform, who can argue, for example, that private sector delivery in healthcare must be a mistake if the Government forbids it in education (and wonder at the force of Nick Clegg’s language last week). The failure to adhere to principle gives an air of unreality to the whole programme.
Some may say that whatever the failings of individual policies, the Coalition is an advance on the last Government. What strikes me is the degree of continuity. So far, in both cases, a committed group of reformers at the heart of Government have failed to create a consistent and coherent programme across the departments. Both governments have offered “halfway house reform”, such as academies, rather than comprehensive reforms of the mainstream of public services. Both governments have put forward mutuals and social enterprises as better alternatives to straightforwardly profit-making organisations.
Still others may say all this criticism ignores the energy and speed that the Coalition has displayed. It is indeed under attack from the opponents of change every day and its Ministers are displaying real courage under fire. But as Tony Blair discovered, personal commitment, energy and rhetoric are not enough. The only real questions are whether the reforms are right and whether they contribute to a coherent reform programme across Government. Ministers are going to spend their political capital one way or the other. They might as well spend it on the right things.
The need to get value in public spending means that the Coalition will never have a better chance to reform public services. On 17 January the Prime Minister said, “I have to say to people: if not now, then when?” Yet he is in danger of failing to heed his own rallying cry.
The forthcoming Public Service Reform White Paper is expected to give greater definition to the Government’s reform themes, such as payment by results. In fact its task is much more urgent than that. It is the chance for the Government to set out a revised programme which is consistent with its brave reforming principles. Such a programme would indeed represent, in the Prime Minister’s words, a “great achievement” and a fitting legacy for his Government.