So successful have David Cameron’s Conservatives been in turning political debate on its head that all three main parties are now arguing not about how to beat the recession – but how far to squeeze public spending. Instead of competing over how to reverse the haemorrhage of jobs and offset the collapse of private investment, the issue has become which public services to cut.
That is a dangerous diversion. The crisis facing the country is not one of public borrowing, but of unemployment, business retrenchment and a failed economic model. Britain’s debt ratio isn’t particularly high by historical standards and is lower than other advanced economies. Nor is there any reason to believe it will become impossible to finance the increase in borrowing that has kept the banks afloat and the economy from tipping into a full-scale slump.
But although Gordon Brown is right that “growth is the best antidote to debt”, the cost of servicing that debt is set to increase as the economy recovers, and the growth of public spending is bound at least to slow.
A major contribution to cutting the deficit can of course be made by broadening the tax base: clamping down on tax allowances and loopholes to ensure the wealthy pay at least the same proportion of their income as low and middle income earners, for a start, would be both effective and popular.
There’s no reason why deficit reduction should have to mean cuts in public services, however, which could actually weaken the public finances still further, as the experience of the 1980s showed. The same goes for the likely attacks on the pay and conditions of most public sector workers, serially misrepresented as privileged and cosseted.
But it does offer a chance to reshape public services and the way they’re delivered. A switch of resources into public housing investment, for example, would have a powerful impact on both neglected communities and economic recovery.
Cuts in spending on ID cards, the Afghan war, Trident renewal and corporate welfare would be widely welcomed – as would the major savings to be had from slashing the vast infrastructure of bureaucracy, quangos and private consultancies built up to administer the marketisation and outsourcing of public services over the past couple of decades.
Instead, the expectation must be that the tempo of privatisation, which in public services has gone far further under New Labour than its Tory predecessors, will if anything accelerate. The claim will be that further private provision will cut costs.
The weight of evidence, on the contrary, is that from PFIs to PPPs, independent sector treatment centres to rail franchises, prisons to school testing, privatisation is actually more expensive and inefficient, less accountable, damaging to the public service ethos and a motor of political and corporate corruption.
Where privatisation does reduce costs, it has routinely been through cuts in pay, conditions and service quality. But by claiming the mantle of reform and choice, the privatisers have managed to pose as the service users’ champion. That’s why alternative models of public service reform, such as that pioneered by unions and managers at Newcastle city council, are potentially so important.
As part of a Unison-led campaign to resist the privatisation of the council’s IT department, the workforce played a central a role in reshaping it, achieving £28m worth of savings – without compulsory redundancies or loss of terms and conditions – along with sharp improvements in services, user satisfaction, training and investment. As the title of Hilary Wainwright’s account of the Newcastle experience has it, this is “public service reform … but not as we know it”.
If public services are to be defended from the slashers and privateers – and developed as the universal badge of social solidarity and citizenship they should be, rather than a second-class safety net for the poor – an alliance of workforces and users is going to be essential.