`BRITAIN’S PUBLIC SERVICES: RHETORIC AND DELIVERY’

`BRITAIN’S PUBLIC SERVICES: RHETORIC AND DELIVERY’

ANDREW JOHN WILLIAMSON MEMORIAL LECTURE
STIRLING, 25 SEPTEMBER 2003

Introduction

First, may I offer my sincere thanks for your invitation to deliver the Andrew John Williamson Memorial Lecture.

It is a tribute both to the work of Andrew’s parents and that of the Trust, and indeed to the University, that this lecture has become such a feature of the political calendar. It is a wonderfully appropriate way of honouring and perpetuating the memory of a remarkable young man who would, had he lived, undoubtedly have made a significant contribution to the political life of our country.

I know that I am following an illustrious line of speakers who have delivered this lecture in previous years and I feel truly privileged to be following in their footsteps. We have not all come from the same political tradition, by any means, but one thing which most, if not all, of us have in common is an involvement in student politics, a characteristic which, of course, we share with Andrew.

Your invitation to speak comes at an opportune time. Some 18 months away from a possible general election, the battle lines are being drawn. Clear themes are emerging. People are beginning to ask themselves why the current Government has not delivered on its promises – and whether it can be trusted to do so in future. They are ready – perhaps for the first time since Labour were elected – to look at the alternatives on offer.
That presents the Conservative Party with an opportunity and also a very important responsibility. We need to present a clear and credible programme for government. We must show how we can make people’s lives better.

The issues of concern to people – the issues which will determine the result of the next election - are also emerging. And I want to focus this evening on one of the most vital and central of these issues – the state of our public services.

As you might expect, some of what I have to say will be critical of the record of my political opponents. But the role of a responsible opposition, presenting a case for government, goes beyond that.
And my aim today is broader too. I want to identify some of the underlying causes of Labour’s failure on the public services. That failure is, fundamentally, a failure of an entire approach. And this evening I want to suggest a different approach, a different way of ordering and providing our public services.

Promises and Failure

What I have to say is relevant both to Westminster and to Holyrood.
Indeed, events north and south of the border have followed the same cycle.
First, in opposition the Labour Party – and, of particular relevance in Scotland, their coalition partners the Liberal Democrats - promised radical improvements in services.

They promised that this would come about through reform as well as investment. Indeed, the 1997 Labour Party Manifesto said: `The level of public spending is no longer the best measure of the effectiveness of government action’.

Yet second, having won office, they failed to introduce any real reform of those services. If anything, that failure is even more pronounced here than it has been in England.

Third, the improvements in services which were promised have then failed to materialise.

Fourth, having forgotten their promises of reform, their only answer to this record of failure on the public services is ever higher tax. And when that fails, higher tax still.

Every year we are told that higher taxes are required in return for better public services. But every year we just get the higher taxes.
So finally, after six and a half years in office in Westminster and four and a half in Holyrood, all we have from Labour is higher taxes and, on public services, yet more promises for the future. It is becoming increasingly apparent that these are empty promises.

Promises

Let’s look at that train of events in a little more detail.

First, the promises. Better public services, Labour say, are just around the corner. But, unfortunately, that is where they always are.

It is now six and a half years since Tony Blair said there were 24 hours to save the NHS.

First we were told it would take one term to get the public services in order. Then two terms. Now we learn that they need a third.

And their failure is particularly apparent when you look at some of the specific promises they made.

In Scotland, the 1999 Labour Manifesto pledged to: `bring waiting lists down by at least 10,000 from the level we inherited by 2002 and then drive them down further through targeting areas with the longest lists’.

In their programme for Government `Working Together for Scotland’, the Executive pledged to `reduce bureaucracy by streamlining NHS Boards’.
Their 1999 Partnership Agreement pledged to `set and monitor targets to speed treatment and shorten waiting times’.

And two and a half years ago the Executive set a target for reducing inpatient and day case waiting lists `to 75,000 by March 2002’ (press release, 28 February 2001).

Record on Health

It hardly needs me to tell you that not one of those promises has been met.

Indeed, far from waiting lists having fallen, as promised, under the Lib-Lab administration they have risen by a quarter.

The typical waiting time is now 50 days - up from 47 days in March 1999 and from just 34 days in 1997 when Labour took power in Westminster.

Labour’s record in England has only been marginally less dismal.

South of the border there are a million people waiting for treatment.

And last year 300,000 people without health insurance, often pensioners, were forced to pay out of their own pockets for the health care they needed, because of the shortcomings of the NHS – a threefold increase on the number before Labour came to power.

Other Services

Other services have faired little better.

In its 1999 manifesto, Scottish Labour pledged that, under a Labour administration, 80 per cent of children would reach the appropriate standard in reading, writing and arithmetic by the time they left primary school. That pledge has not been met.

Likewise south of the border, the Government has missed its literacy and numeracy targets two years running. These are the targets which David Blunkett as Education Secretary said, if missed, would cause him to resign. One in three 11 year olds leaves primary school unable to read, write and count properly. Meanwhile teachers are increasingly demoralised, vacancies having doubled since 1997.

The Government has also failed to hit its target for truancy at any time since it was set. Indeed, by the end of the academic year 2001-2, the number of children playing truant had actually grown by 15 per cent. And there has been a growth of 25 per cent in the number of children truanting from secondary schools

And on our streets, in Scotland, violence has risen by 25 per cent since 1997, vandalism by 18 per cent, and drug crime by 37 per cent. In England and Wales there has been a 64 per cent rise in violent crime since 1998.

Of course bald statistics like these can sometimes disguise what is the everyday reality for millions of people across the UK. The reality of people waiting for months, often in pain, for operations which they would have received earlier had they lived elsewhere. The reality of people spending more time commuting each day than their European counterparts because of congestion on the roads. The reality of people’s daily lives being blighted by crime and the fear of crime. And the reality of a generation held back from the very best our schools can offer, simply because of where they live.

For while many of these problems are universal, it is often the poorest and most vulnerable in society who suffer most as they are trapped in failing schools, who are most likely to suffer from ill health, and who are most likely to be victims of crime. The terrible irony is that failing public services have let down most the very people who were promised most, who thought they had most to gain from a Labour administration, and who put most trust in Labour to deliver.

Inputs

The obvious question to ask is why these failures have occurred.

First, let me say that I do not doubt the good intentions of my political opponents, or their commitment to the public services. I accept that it is often a desire to improve these services that drives people, of whatever political colour, into politics. But that merely serves to make Labour’s failure to deliver even more stark.

Nor is this failure the result of any lack of resources from the taxpayer.

Indeed, there have been no fewer than 60 tax rises since 1997 – despite Tony Blair’s promise that he had no plans to increase taxes at all. The total tax take in 2003-4 will be 50 per cent higher than in 1996-7.

Spending has risen too. In Scotland, the health budget rose by no less than a third - £1.6 billion - between 1997 and 2003, even after the effects of inflation are taken into account.

There also, on the face of it, seems to have been an increase in staff. Public sector employment in the UK rose by 354,000 between 1998 and 2002. We estimate that there has been a further increase of 120,000 since then. And the Government estimates that public sector employment will rise by 70,000 annually between 2003 and 2006. So, in all, in the eight years to March 2006, the number of people employed in the public sector across the UK is set to have risen by some 684,000.

Lack of Reform

So the problem is not resources.

The problem, I believe, is Labour’s unwillingness to introduce real reform to accompany those increased resources.

Reform, they say, is just around the corner.

But, like the improvements in services, that is where it always is.

So today, in Westminster and Holyrood alike, quoting figures for rising spending has become not only the main but often the only way in which Labour can defend their record. They were right to say in 1997 that the level of public spending is not the best measure of the effectiveness of government action. But all too often today it is the only measure which Labour can deploy in their defence.

Administration and Inefficiency

Part of the reason for this failure is the rise in bureaucracy and spending on administration.

In England and Wales there are now more administrators than beds in the NHS. Between 1997 and 2002 administrators in the Scottish health service rose by 13 per, while the number of beds fell. The RCN have pointed out that while the number of managers increased by a third in England over three years, the number of district nurses and health visitors fell.

Similarly, out of a budget of £3.3 billion earmarked for spending by Scottish schools, only £2.2 billion actually reaches the chalk face.

Increased bureaucracy inevitably means reduced efficiency. Over the latest year for which figures are available, inflation in Government consumption (UK) was 4.4 per cent. By comparison, inflation in household consumption was just 1 per cent over the same period.

Official figures from the ONS show that, since 1997, current government spending has increased by 49 per cent and output by just 15 per cent.

So all the evidence suggests that the increase in funding for the public services in recent years has simply not been used wisely. Too much of the money has been wasted on bureaucracy. And the public sector has been getting less efficient.

Indeed, today we read that the emerging black hole in the national finances has forced even this Government to embark on what The Times calls an `urgent efficiency review’ in which `thousands of backroom jobs are expected to be swept away’. What an indictment of this Government’s approach that such a review has been prompted not by any concern about the public services but by Gordon Brown’s panic at not being able to balance the books.

Unfortunately I do not hold out much hope that the review will be a success. Because the problem of inefficiency in the public services goes to the heart of the way this Government behaves. It has been brought about partly as a direct and inevitable – albeit unintended – consequence of policy.

In England, the Government is estimated to have issued documents totalling 3,840 pages to primary schools and secondary schools in 2001-2 - 20 pages of Government documents for each school day.

The fact that ministers saw the need to issue quite so many directives results from their desire to control and centralise as much as possible in Whitehall and the Scottish Executive. That process of centralisation lies, I believe, at the heart of what is going wrong with the public services.

Centralisation

So how and why has this centralisation happened? A couple of weeks ago, Iain Duncan Smith launched a policy document which looked at this very problem. It identified a `vicious circle of escalating central control’. As it said: `with each inevitable failure to achieve over-hyped electoral promises comes the impetus for yet further intervention from Whitehall and more intrusion into the autonomy of professionals. The result is a deluge of political interference in the operations of front-line services’.

There are several ways in which this centralisation has taken place. We have identified four so-called `drivers of centralisation’: centrally controlled funding; over-bureaucratic audit and inspection; rigid terms and conditions; and targets imposed from Whitehall.

Targets

Let’s spend a moment or two on just one of these drivers: the Government’s culture of rigid and centralised targets. This in many ways epitomises what has gone wrong.

First, the sheer number of targets, and quite often their nature, has actually diverted time and attention away from the task of improving front-line services. It has encouraged instead a kind of `tick box’ culture in which the overriding aim is to satisfy Government demands for a particular target to be achieved, irrespective of whether it actually corresponds with the needs and wishes of the users of the services.

Second, it stifles local initiative, and the responsiveness of local services to the needs of their communities.

Third, it encourages cheating. If targets are being met by, for example, re-designating a trolley as a `bed on wheels’, then it is clear that an improvement in service has not occurred.

So not only have individual targets often not improved things, but in some cases, the whole target culture may actually be harmful.

Let me give you an example of the damage which rigid and centrally controlled targets can cause.

In 1999, the Scottish Executive pledged to `reduce by a third the days lost every year through exclusion from school and truancy’. Inevitably, the result of this target was pressure on headteachers to reduce exclusions, even though headteachers are clearly in a much better position than the Scottish Executive to judge whether an exclusion is justified in a particular case.

Partly as a result of this policy, there has been in the last few years an unparalleled increase in the level of violence and indiscipline in our classrooms. Scottish Executive figures show that the number of reported incidents of violence against local authority school staff increased sevenfold between 1997-98 and 2001-02. There is now an attack on a teacher in Scotland roughly every fifteen minutes. Not surprisingly, teacher absence through stress continues to rise.

Furthermore the Government has used targets as a substitute for real, decentralising, reform.

To use an analogy, the Government has acted like the owner of an old car which has, alas, long since seen better days. He wants to get from Glasgow to Edinburgh. So he fills it with petrol, knowing it needs ‘resources’. And he sets himself a target of getting there in one hour. But he does nothing at all to deal with the car’s clapped-out engine, faulty steering or flat tyres. He is unlikely to get to Edinburgh on time.

Targets are, of course, only one aspect of the centralising culture.

Only today, a Plymouth consultant has complained in an interview of a system `so rigidly controlled that it’s almost like being in Russia under the five-year plan’ (Telegraph, 25 September 2003).

Differences in Approach

There is a different approach to the public services.

As you will have gathered from my criticism of Government policy, I believe that real reform of the public services should be decentralising in nature. It should reflect the fact that, more often than not, decisions are best taken by the people who use the services and by the professionals who provide them. Fewer decisions should be taken by bureaucrats.

This principle has some very practical consequences, which I will come to in a minute, but I want to note first of all that it stems from a different philosophical approach from that taken by the Labour Party.

I said earlier that I did not doubt Labour’s motives on the public services. Most people who go into politics do so because they want to make people’s lives better. But there are fundamental differences when it comes to the issue of how best that can be done.

When they see shortcomings in services, the instinctive reaction of Labour MPs is to take as much control as possible to the centre.

And that instinct derives from a certain set of beliefs about the role of individual choice - and of the personal responsibility which comes with such choice.

Earlier this year, Gordon Brown delivered a lecture to the Cass Business School in the City of London. He set out the philosophical underpinnings behind his – and the Government’s – approach to the public services.

There are aspects of that lecture with which I agree. But in setting out a limited role for the consumer in public services I think he was profoundly mistaken.

In health care, for example, he said `the consumer is not sovereign’, in part because of asymmetry of information - with practitioners possessing greater knowledge than the users of the services. And, in large part at least, that view of the user of services leads to his view that there are severe market failures in such services.

I believe that view of the impotent patient lies at the heart of Labour’s concept of the structure of the NHS, with its large degree of State control.
And I disagree profoundly with that analysis.

First, there is asymmetry of information in other professions too – from vets to solicitors, estate agents to financial services advisors, bank managers to surveyors. All these people advise their clients on matters of exceptional importance to them. And of course all are more knowledgeable than their clients in their areas of expertise. But this does not mean that people cannot exercise any choice between professionals or providers, or that the services concerned should be provided in a centralised manner by the State.

Second, we should not ignore the extent to which governments fail to provide the optimum outcome for society as a whole. This is not out of malice, but in part because the State simply cannot acquire enough information about the needs and wishes of millions of people to be able to direct resources from Whitehall or St Andrews House in a way which will meet those needs.

So by its very nature, a centralised approach, in which all key decisions are made by the State, reduces the decision-making power of users of services, partly because policymakers do not trust them to exercise that power properly.

And, crucially, this in turn reduces a sense of personal responsibility. Parents, for example, find they do not have any real influence over the type of school their children attend, because all such decisions are taken by the state. But, given the chance, they want to be involved, they want to have a say, because they above anyone else have a stake in the outcome of their children’s education.

A society in which people find they are able to exercise less and less responsibility and take fewer and fewer decisions for themselves will not be a society in which there is much of an in-built incentive for services to improve.

But it is not only the users of the services whose views end up being marginalised. As I have illustrated with reference to targets, such a system also downplays the role of the professional. It is often not the professional making the choices, but the bureaucrat – and often at central rather than local level. The `ethic of public service’ which Gordon Brown rightly identified as being at the heart of health care provision, is at risk not from reform, as he claimed it would be, but from the current structure and the failure to reform it.

I have focused so far largely on the efficiency with which services are provided. And of course, equity as well as efficiency is of paramount importance in the delivery of health care and other services. Health care should be available regardless of ability to pay. No-one should be denied necessary medical treatment simply because they are unable to afford it. And there are various reasons why leaving health care entirely to the market would produce an outcome which is both inefficient and inequitable.

But this should mean that particular problems should be identified and dealt with by government, not that government should step in and remove almost all responsibility from individual service users and professionals.
Because unfortunately, it is equally clear that the outcome from our current arrangements is both inefficient and inequitable. Healthcare in Britain falls woefully short of what we should expect in the world’s fourth largest economy.

For example in France, the maximum wait for an operation is four weeks.
In Accident and Emergency, NHS patients have to wait hours – first just to be seen, and then to be admitted. In Germany, all patients are seen within minutes of arrival.

We must have the humility to learn from the success of others or British patients will continue to suffer unnecessarily.

That is why reform is required across the public services.

The Conservative Alternative

So we want to see headteachers have greater control over their school budgets and operational decisions. We want to see all hospitals having the opportunity of attaining foundation status, with real extra freedoms from Whitehall. And we want to see communities get the type of policing they want, not what bureaucrats and politicians think they should be given.

We want people to be able to exercise more responsibility for their lives.
We want to reverse the four `drivers of centralisation’ which I have identified.

We aim to replace rigid and centralised targets with structures better able to respond to the differing needs of individuals and communities, with people being offered reliable and accessible information about the quality of the services available to them.

We aim to replace centrally controlled funding with direct funding for people and more finance raised locally. In most cases, money will follow the individual to wherever they choose to receive services. The distinction between state, voluntary and private providers will increasingly be broken down.

We aim to replace central audit and inspection with lighter systems of oversight. The role of audit and inspection should primarily be to provide information to help people choose between services, not impose a template on how services are run. Of course, there need to be guaranteed minimum standards, but not constraints which hold services back from delivering excellence

And we aim to replace national terms and conditions with flexibility to respond to local circumstances.

Other healthcare systems, for example, are much more diverse than Britain’s. In most countries, hospital care is undertaken by a variety of institutions.

Standards in such systems are often raised by giving patients an informed choice as to where they can obtain treatment. In Denmark, for example, patients have the right to choose which hospitals they receive their treatment in.

So the policies we have set out are based on giving people genuine choice, driving up standards for everyone, and giving freedom for practitioners and professionals to get on with their jobs. Innovation will be encouraged and rewarded, not held back by bureaucracy.

By contrast, in England the Government’s foundation hospitals will still be subject to a large measure of central control through the so-called `Independent Regulator’. In Scotland the Executive does not even support Foundation Hospitals at all.

Scottish Conservatives propose to devolve power through GP Fundholding and Foundation Hospitals, and to create a genuine partnership between the NHS and the Independent Sector.

Our aim, in short, is to substitute a virtuous circle of decentralisation for the vicious circle of centralisation and the bureaucracy that afflict our healthcare today.

Similarly in education, Scottish Conservatives have set out plans to empower head teachers to exclude violent or disruptive pupils, to encourage a greater choice of specialist schools; and to give schools greater freedom to set their own priorities.

Conclusion

In all these cases, we will not be reforming services for the sake of reform, but because we passionately want them to improve. Our ultimate goal is better, fairer and more accessible results in health care delivery.

The present Government, I believe, is testing our existing models of public service delivery to destruction. Despite a huge injection of additional resources we are still not getting the improvements we all want to see.

I believe that, for the first time in generations, the people of our country are going to be receptive to new ideas of public service delivery, to ideas which borrow from the experience of others and show that there is a different and better way of doing things.

I outlined at the beginning of this lecture the opportunity and the challenge facing the Conservative Party as we approach the next election. But in reality far more than the outcome of an election is at stake. We have the opportunity to change our public services for good. I believe that we are the only Party that can put forward alternative policies for our public services that are unblinkered by ideology, free of dogma and independent of the purse strings of powerful vested interests. And in so doing we can improve the everyday quality of life of the people of our country.

It is an opportunity that, for their sake, we must seize with relish and enthusiasm. It is an opportunity we must not squander.

Rt Hon
Michael Howard QC MP