The financial crisis and its aftermath have sparked a huge debate about how Britain's economy needs to change to achieve sustainable growth, benefiting people on all incomes and in every part of the country. Less attention has so far been paid to how the state and public services need to change to improve people's lives and life chances when there is far less money around. Yet reform of the state is vital if we're going to meet the challenges we face as a country.
Every week, as a local MP, I see constituents who are frustrated with one local service or another. A common complaint is that people have to battle different services and repeatedly give the same information to different agencies. Too often, people's personal needs and circumstances aren't taken into account and they're forced to fit themselves into services that don't appreciate the reality of their lives. Individuals and families don't get the early help that would prevent problems escalating, causing them distress and costing the taxpayer much more. Some fall through the gaps in services altogether.
Many of the people who come to my surgeries have a range of social, mental and physical problems, which can only be tackled when different services collaborate. The complex nature of the challenges facing public services will increase in future, as our population ages and more people live with several chronic health conditions.
People's expectations about public services are changing too. Deference and trust in professions and institutions continues to decline. Technology is transforming how people communicate with one another and how they interact with services. Yet the way some of our public services work remains stuck in a different age.
The pressures facing public services take place against the backdrop of a brutal fiscal challenge. According to the Institute for Fiscal Studies, only 40 per cent of this government's planned spending cuts will have been made by the time of the next election.1 Eliminating the deficit, which is currently set to be nearly £80 billion in 2015, and achieving a current budget surplus over the next parliament will mean extremely difficult decisions about funding priorities and spending reductions. Even then, we must also get far more out of every public pound spent.
These challenges will continue for years to come. The Office for Budget Responsibility says the primary pressure on the sustainability of public finances is the ageing population. Without fundamental reforms, including to the NHS and social care, this will affect the long-term growth of the economy.2
The Conservatives used to claim their approach to public sector reform was about creating the 'big society'. The rhetoric was about empowering people, but the reality has been individuals and communities left to cope on their own as services are withdrawn or contracted out to distant, often unaccountable and unresponsive private providers. Power has been centralised, not localised, and handed to the providers of services, not users.
Continuing to salami-slice individual services will not work. Instead, public services must be redesigned to achieve better results for users and better value for taxpayers' money.
Redesigning public services
First, there must be a fundamental shift in the focus of services towards prevention and early intervention. Children's services and care for the elderly will be key priorities. There is compelling evidence that high-quality early years services improve children's life chances and reduce spending on the costs of 'failure' in later life. Similarly, services and support that help older people to stay healthy and live independently at home improve their quality of life and reduce spending on more expensive hospital or institutional care.
Second, public services must be integrated to provide seamless support. Assessments and contact with lots of different services creates confusion for users and unnecessary waste and duplication. Joining up budgets and teams, and having a single coordinator to provide one point of contact for users and families, can transform people's experience of services and make more efficient use of resources. The integration of health and social care in Torbay, for example, has cut the number of emergency bed days, decreased delayed transfers from hospital, and reduced the number of people requiring nursing care homes.3
Third, public services must support a greater contribution from individuals, families and communities wherever possible. People have a huge role to play in improving their own lives and those of their families, but need support to do so. Parenting is the most important factor influencing children's life chances. The amount parents talk, read to and interact with their babies has a profound effect on cognitive and other areas of development. Large gaps in development between children with high income or well-educated parents and those with low-income or less well-educated parents emerge by the age of three. Changing the way midwives, health visitors and other early years services work with new parents is essential to narrowing these gaps.4
Patients with long-term illnesses can help manage their condition with advice from specialist nurses, by using technology to monitor their condition, and by learning from the experiences of other patients. Self-management programmes can improve patients' physical functioning, increase confidence, improve adherence to medicines and reduce hospital admissions.5
The wider community has an important role to play too. Leeds has pioneered a system of neighbourhood networks: small, independent organisations owned and run by local residents in 37 areas across the city, with funding from the council and others. The networks identify volunteers to help elderly and disabled people alongside statutory services. These volunteers provide practical and emotional support, such as going shopping, organising social events, or just being available to talk - things that make a real difference to people's lives but aren't being provided. Research suggests schemes like these cost around £80 a year to run for every older person but could lead to annual savings of around £300.6
Fourth, public services must be fully personalised and designed around the needs of individuals and families, rather than those of service providers and their staff. The experience of places like Torbay and Leeds shows that focusing on what matters most to people can drive fundamental changes in how services are organised, the culture and practice of staff, and the quality of users' experiences.
A new approach
Achieving these changes will require a different approach to public service reform from that of the current government and the previous Labour administration.
Under Labour, increased investment in public services and central targets drove big improvements, including in literacy and numeracy in schools and NHS waiting times. Publishing standards data, using new providers to challenge underperforming services, and giving users more choice were also vital in focusing services on the need to improve. However, the problems now facing public services are more complex and don't fall neatly under the responsibility of one agency or department. The need to help people take on a bigger role and to build better relationships between users and staff and within communities was also undervalued in previous reforms.
Neither predominantly market-based nor centrally driven state solutions will address these challenges on their own. We need a new approach that gives people greater individual and collective power over how services are designed, delivered and held to account.
Devolving power and control
A radical devolution of power and control is essential. Preventive, integrated and personalised support cannot be achieved via diktat from Whitehall. Yet the English state remains highly centralised, with decisions about funding and priorities still largely taken by national government. Services are still predominantly held accountable upwards to (separate) departments, rather than outwards to users and citizens.7
As Rick Muir and Imogen Parker have argued, decentralising power to local authorities and city regions will help break down silos, encourage greater pooling of funding, and support professionals from different services to work in integrated teams. Longer-term budgets will support services to invest in prevention, allow staff time to work in different ways, and give voluntary groups the security and space they need to build capacity in local communities.
However, these changes will be difficult to achieve if central government continues to work in the same way. The Local Government Association (LGA) argues that just as councils need to reduce bureaucracy and remove artificial silos, so too does Whitehall. The LGA has called for six government departments to be merged into a single England Office, to support changes at the local level.8 Labour's zero-based spending review provides an important opportunity to consider what changes are needed within central government to support the decentralisation of power and control.
Labour's plans for devolution will not stop at the town hall. The state can hoard power locally just as much as it does nationally. Local professionals and politicians often think they know best, as much as civil servants and ministers. This is one reason why public services often end up doing things to or for people rather than with them. At worst, this can mean entrenching dependency and undermining people's capacity to change their own lives.
So power will be devolved not only from central to local government, but from councils to communities and - crucially - individuals, too. Labour has a strong track record here. The Supporting People initiative and the introduction of personal budgets and direct payments in social care have helped to transform the lives of thousands of disabled people and their families, giving them greater control over vital services that affect their daily lives. Labour also began piloting personal budgets for people with long-term health conditions in 2009. The national evaluation of these pilots has shown that giving individuals choice and control improves their quality of life and wellbeing and reduces their use of more expensive hospital care.9
There are, of course, many aspects of NHS care where a personal health budget will not be suitable, such as emergency and inpatient care. However, for people with long-term conditions, they are an important way of allowing a publicly funded healthcare system to develop truly personalised care.
Giving users the power to shape services around their needs and priorities, and those of their families, means ensuring people can help to design the services that are available, rather than leaving them simply to choose between existing and often inadequate options. Although the need to involve users in developing public services has long been discussed, in practice too much user engagement is patchy and superficial. Many Labour councils are now rethinking their approach and 'coproducing' how services are commissioned jointly with users and local communities.
Lambeth is one of a number of cooperative councils that are radically devolving decisions and budgets to the people who use their public services. For example, the Young Lambeth Cooperative is a trust owned by residents that is taking control of the council's multimillion-pound youth services budget. The trust works with affected communities to help them define the support they need and ensure it is put in place. Lambeth is also bringing small groups of people with personal budgets together to determine the care and support they want and need. The council will then act as a 'broker' to change existing services or bring in new providers if necessary.
Increasing people's involvement in the delivery of services, as well as their commissioning, has so far been underexplored. There is growing evidence that mutuals and cooperatives can improve the experience of those using services and increase staff satisfaction as well. These should be encouraged and incentivised in future, particularly in areas like early years services and social care, where the quality of relationships between users, staff and the community is essential.
None of these changes will be easy. Public sector workers feel battered and bruised by the huge number of changes that have taken place over recent years. The capacity of many individuals and communities to take action themselves has been undermined by this government, as services and support have been withdrawn.
Risks are inherent whenever changes are made and politicians always find it difficult to give power away. There will be tensions, too, as the public's desire for national standards in public services meets the need for greater local control.
However, the risks of not doing things differently are equally great. No change is not an option. People should no longer be treated as passive recipients of services, or purely as consumers left to choose between inadequate options. Instead, the new state will understand that people are active citizens, with whom power and responsibility must be individually and collectively shared.
Bill Clinton argued that 'those who believe in government have an obligation to reinvent government to make it work' - not least because it is those without power and wealth who bear the brunt when the state and public services fail. This is the challenge now facing Labour: to offer a real alternative and genuine hope that the services we value and rely on can be sustained for future generations.
This essay appears in issue 20.4 of Juncture, IPPR's quarterly journal of politics and ideas.
3 Thistlethwaite P (2011) Integrating health and social care in Torbay: Improving care for Mrs Smith, London: King's Fund ^back
4 Social Mobility and Child Poverty Commission (2013) State of the Nation 2013: Social mobility and child poverty in the UK, London ^back
5 Naylor C, Imison C, Addicott R, Buck D, Goodwin N, Harrison T, Ross S, Sonola L, Tian Y and Curry N (2013) Transforming our health care system: Ten priorities for commissioners, London: King's Fund ^back
6 Knapp M, Bauer A, Perkins M and Snell T (2010) Building community capacity: Making an economic case, discussion paper 2772, Personal Social Services Research Unit ^back
7 Muir R and Parker I (2014) Many to many: How the relational state will transform public services, London: IPPR ^back
9 Forder J, Jones K, Glendinning C, Caiels J, Welch E, Baxter K, Davidson J, Windle K, Irvine A, King D and Dolan P (2012) Evaluation of the personal health budget pilot programme, discussion paper 2840_2, Personal Social Services Research Unit ^back
Snakes and ladders: Tackling precarity in social security and employment supportAcross the country, people are trying to make ends meet, build financial security and pursue their aspirations. But, in a vicious cycle of snakes and ladders, many are being pulled down into poverty.
Making markets: The City's role in industrial strategyTo tackle climate change, we need a significant increase in public and private capital investment.
Broken hearted: A spotlight paper on cardiovascular diseaseProgress on cardiovascular disease was a significant driver of better health and prosperity in the latter half of the 20th century, however progress has recently stalled – with indications it may be in reverse.