Category Archives: Public Services

Health, education, local services and public services generally

The Economist’s disgraceful prejudice on education policy

economist coverSome people hate The Economist; to them it is a proselytiser of that despised creed “neoliberalism” or just plain capitalism. Not me. I have been reading the Economist weekly since 1974 (from between the two British General Elections of that year), when I was just 16 and still at school. I loved its cosmopolitanism and that that it did not lets its opinions obscure the reporting of facts. It was opinionated, yes, but not prejudiced. Much of my writing in this blog has been inspired by my 40 years of readership. No other journal has come close in winning my loyalty.

The Economist has annoyed me of course. I felt a deep sense of betrayal when in 2011 it backed a No vote in the referendum on the Alternative Vote. My own strong support for AV dates from when The Economist itself persuaded me that it would be an appropriate and sensible reform. The chattering classes had taken against AV, and the paper followed the crowd. A perverse election result in Canada under first-past-the-post, reported in the very same edition of the paper, illustrated the case for AV perfectly. The paper’s support for the education reforms of the current government were built on similarly weak foundations, I thought, but these hadn’t strayed beyond mistaken opinion. Until this week.

The top article in the UK section, The new school rules, presents itself as a serious examination of the government’s education reforms. It reads like an article placed by a pro-government think tank, and not the original and critical journalism upon which the newspaper’s reputation has been built.

A bit of background. Under its first Education Secretary, the Conservative Michael Gove, the coalition government has driven through an eye-catching programme of reforms to England’s schools (in Scotland, Wales and Northern Ireland education is devolved). The centrepiece of this has been the establishment of autonomous “Academy” schools, independent of local council control. This built on the previous government’s policy, where Academies often replaced failed schools, and had to secure external sponsors to provide extra finance. This government has made it much easier to set up new Academies (referred to as “Free Schools”), and allowed existing schools to convert to Academy status without a sponsor. The government has done many other things too: established a “pupil premium” to channel extra funding to schools with needier children; refocused the school inspectorate, Ofsted; changed secondary school qualifications towards more academic subjects; refashioned the primary curriculum to something a more prescriptive and more to its political taste; changed teachers’ pay and conditions to give school managers more power; moved measurement of progress away from achieving arbitrary thresholds to measuring total progress. Given the general climate of government austerity, which has limited resources, these changes have been mainly to the good, though I fail to see the point of the changes to the primary curriculum, and the jury is out on the secondary reforms of qualifications.

But the Economist focuses almost entirely on the Academy programme, which it is claims is transforming schools and driving progress. It quotes evidence that secondary academies achieve more good GCSEs (the main secondary exam – “good” meaning achieving the grade C or above) than non-academies, even allowing for the number of pupils from poorer backgrounds. As it describes this progress it fails to mention two facts that throw an entirely different light on what is happening.

The first is that the most striking progress in recent times achieved by Britain’s schools has been in London, in the years up to 2010. Schools in apparently hopeless boroughs like Tower Hamlets pulled ahead of schools in much wealthier areas. This has been much written about and commented on – but it was achieved under the previous Labour government’s tutelage, working with councils of several political stripes. It was based on what I call “good old fashioned management”. A lot of focus was put on school performance, and where results were poor, school management was changed. Some failing schools were converted to Academies, not always successfully, but otherwise existing governance structures were used. The coalition has not undermined this achievement, which has largely continued under its watch (at least in areas I know about). But it is awkward for the article’s central thesis; the upward momentum in England’s schools predates the government’s reforms; it is far from clear whether greater autonomy has much to do with school progress.

The second awkward fact is that for ordinary schools that have converted to Academy status there is a bias towards better schools making the change. Schools who want to make the move on their own (i.e. without being folded into an externally run chain of schools) must achieve a high quality threshold. Rumour has it that one my local schools has been refused because standards aren’t high enough. Conversely schools with good performance often want to convert, in case an unexpected hiccup means that they are forced into being part of a chain. The article quotes evidence that the performance of schools that have converted is better than non-converters. Well, that is hardly surprising, but cause and effect have not been disentangled.

The article discusses the rather awkward fact that academy chains have delivered disappointing performance – I must acknowledge that it does raise difficult evidence in this case. These chains have a reputation of being brutally managed and focusing on a narrow curriculum – one reason that so many schools are anxious not to be swept into one. A bit of brutality is required in order to lift badly managed schools up to the standards of the best, and the London experience confirms that – but a broader, less performance-focused curriculum is needed to deliver the wider set of skills that the world of work (and outside it) demands. Schools have to be soft and hard both at once. It is no surprise to many that aggressively managed chains deliver at best only short-term results.

But the Economist seems to think that the problem is that management of the chains is is not aggressive enough. It suggests that one way to “turbocharge” the reforms would be to open up management of schools to for-profit companies, rather than just charitable foundations as now. If I was a cynic, I would suggest that the article was prompted by private sector company lobbying to be allowed to take over state schools – but I don’t believe that.

Unlike many I have no ideological objection to the use of the private sector in public services. But I do wonder whether the sort of aggressive performance-driven management that the private sector does well is what most state schools need. Private managers will be tempted to take two shortcuts. The first is to narrow the curriculum, which undermines the overall mission of education. At least competition might act as a check on this, as schools with too narrow a focus may be less popular. The second is more insidious: selecting the pupils by avoiding the neediest, through selective recruitment or exclusion. Whatever the formal controls against this, we can expect the private sector to find innovative ways around them, as this is the quickest way to improve margins. This then leaves a pool of needier pupils which will tend to be concentrated in other schools – when in almost all cases the best chances of meeting their needs is in schools with a good social mix. A vital social objective for state schools is to reduce the number of people who get into trouble of one kind or another later in life (crime, unemployment, poor mental and physical health). It is very important that schools handle the neediest cases well – and it is something that English schools have often been bad at. It is not something that private sector organisations have a strong enough incentive to deal with, and concentrating the problem into specialist schools is no way out.

When considering education policy in an international context, The Economist often says that teaching and management are the critical issues, and not other issues such as class sizes, money – or autonomy. English (and indeed British) education is nowhere near as good as it needs to be, and many schools and local authorities are complacent or defensive. Continued reform is needed. This needs to focus on getting good leaders in place, raising teaching standards, and ensuring that incentives and accountability are functional. No doubt academies, and even private sector expertise, has a role to play. It gives the politicians a few extra tools in the box. But to make autonomy the centrepiece of reform is a highly questionable approach, especially in a country, like Britain and unlike the US, where central government has such power over schools.

The author of the article was clearly inspired by visits made to well-run Academies. If he or she wants evidence that you don’t have to be an Academy to be a very impressive school, I am happy to offer them a tour of the wonderful primary school where I am Chair of Governors. That at least may open theirs eyes to what is possible without being an Academy.

I must allow The Economist to hold firm opinions rather sit on the fence. What is so disappointing is that this time that opinion seems based on such shallow foundations. And its discussion of the evidence and wider debate lowers the papers standards to those of less distinguished papers.

 

 

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Rethinking Liberalism 6: reinventing the state

So far in my series of essays my conclusions have been quite conventional, if a little left of centre. We need to keep capitalism in a mixed economy; the state will need to get bigger to cope with the demographic challenge; we will have to tax the rich more as middle incomes are squeezed. There’s nothing here that would upset the denizens of Whitehall unduly, notwithstanding the economic liberal tendencies of some. But I think we are badly let down by our system of government. It will have to change radically – and yet the complacency of the Westminster elite is overwhelming. Liberals must rally to challenge it.

Unfortunately one of the best examples of this establishment complacency comes from our own Liberal Democrats. Back in the 1990s I was inspired by anti-establishment rhetoric from our then leader, Paddy Ashdown. The whole system was rotten, he said; we were the outsiders and only we could change it. Then, in 1997 the party arrived as a serious force in Westminster politics.  But, somehow, under the leaderships of Charles Kennedy and Nick Clegg (or the brief leadership of Ming Campbell, come to that) this radicalism came to be toned down. In spite of some radical language from both of these leaders, policy was more about trimming the Westminster policy agenda here and there without counting too much controversy. Ideas, such as a local income tax, which might have meant a decisive break from the Westminster-centred way of the world, were quietly buried. By the time Lib Dems took up cabinet jobs in the current coalition, they looked very comfortable in their new Westminster ministries, with the possible exception of Vince cable, the industry minister.

And the public could sense this. My heating engineer, classic old-school lower middle-class, told me that the Lib Dems had sacrificed their principles to get their hands on the prestige of power. Mr Clegg looked as if he was enjoying themselves too much. This feels very unfair, of course. There was a national crisis in 2010, and the compromises of coalition were needed for the country’s sake. And the Liberal Democrats have stopped the Conservatives doing a lot of silly things, like cutting Inheritance Tax. But there’s a grain of truth in the accusation; what about the promise to really shake-up British politics? It’s not clear that senior Lib Dems ever wanted to do more than change the standard Westminster priorities a bit, by pushing education and redistribution up the agenda and making the odd stand on behalf of civil liberties, unless real heat got applied. If there has been any reinventing of government, it is mainly Tory ideas that are driving it. And they are about keeping the basic Westminster architecture in place, but diversifying the delivery (more private contractors and Quangos in place of top-down state hierarchies). The attempt to devolve more power to democratically accountable local bodies has been a particular disappointment. Each step forward is accompanied by at least one step back. The malign orthodoxy of the Treasury, with its insistence on a highly centralised model of power, remains unchallenged by key Liberal Democrats – or so it appears.

Why does this matter? Firstly because the pressures caused by the demographic shift have only started. I have already written about pensions. Health costs will rise too as the ratio of older people increases. And then economic growth will continue to stagnate, for a variety of reasons, including the increasing number of people entering retirement, but for other reasons too. Meanwhile the twin (and related) economic deficits of government finances and trade are unsustainable in the long run. The government has to tax more and spend less. It has to become much more efficient and effective.

The country’s direction of travel is not encouraging. Government cuts have been very painful, and the public is tiring of them. Endless privatisations are affecting the quality of service. The fiscal deficit creeps down, but it is still very large, and he trade deficit is getting worse. This shows that the underlying economy remains weak, and that growth is hardly more sustainable than it was under the last Labour government. No sooner does the economy grow, than does Sterling appreciate to undermine all the rebalancing. Meanwhile the country is sleepwalking into the breakup of the United Kingdom (even if Scotland votes No in September) and exit from the European Union, as political dissatisfaction with the status quo grows. Pulling all the usual levers of power in Westminster seems to be doing not much good.

What have liberals to say about this advancing gloom? The first point is that we want people to have as much power as possible over their own lives. That means we dislike people being dependent on the state. It is here that we differ from the socialist left, who don’t mind if the public has a permanent client relationship to state agencies, as this creates a political constituency both amongst the dependents and the employees who serve them. Liberals should recognise that in a modern society the state must play a very big role – but we also need to push back on dependency. The state should fix problems so that demand for state services reduces.

The second point is that we believe that as far as possible state structures should be fully and democratically accountable to the people they serve. The state does not devolve power to citizens, but citizens delegate power to the various levels of government. This too is difficult in the modern world. Many problems are complex and must be solved at a national and international level – and the further up power is delegated, the weaker accountability becomes.

Have we delegated too much power to transnational bodies like the European Union and the World Trade Organisation – with the threat of more as part of a transatlantic trade deal? I don’t think so – these structures merely recognise the transnational nature of problems and the need to agree international standards and laws. Countries that opt out of these structures don’t seem conspicuously better off as a result. Is Australia, for example, really a better and happier place than Britain? Its recent economic success is as much down to the luck of geography and natural resources as anything else. Does having to dig up vast amounts of prime farmland to get at the coal beneath, while poisoning the great natural wonder of the Barrier Reef, really look like freedom?

No. I think the main problem is that we have delegated too much power to Westminster, and that the Westminster elite is protecting itself rather than solving the countries’ problems. It has created a series of administrative silos that perpetuate problems rather than solving them. To tackle this we need to do three things.

  1. Establish a federal system for United Kingdom, by creating a new English parliament and English government, based outside London, and taking to itself the same set of administrative responsibilities as the Scottish government has.
  2. Radically reform the way public services are commissioned to ensure that solving problems for their clients becomes their prime driving force. This will entail a radically increased role for locally accountable agencies.
  3. Reform the country’s tax system to follow this radical redistribution of responsibilities so that every level of government controls more of its own revenues – alongside a system of transfers to ensure a fair distribution of resources.

Each of these three depends on the others. Federalism is required to break up Westminster complacency; public services will only be properly remodelled if it is not controlled from Westminster; power cannot be decentralised unless tax is decentralised too. I will pick up each of these themes in future essays.

 

 

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Rethinking Liberalism 5: pensions and the state

In my previous essay I concluded that we had no choice but to tax the wealthy more, and this was the most divisive issue in current British politics. The reason for this is that state commitments on pensions and the health service, and potential commitments on social care, would force the state to expand, and for taxes to rise. The hollowing out of the economic middle meant that the wealthy would have to take up an increased share of the burden. But what are liberals to think about these state commitments? It is easy to see why socialists favour them, but less clear for liberals.

At the recent CentreForum seminar on the Orange Book, more than one speaker referred to the coalition government’s commitment to a “triple lock” on the state pension as being disastrous and illiberal. This guarantees that the state pension will rise by the higher of consumer prices, earnings or 2.5%. So as the proportion of older people grows the cost of this promise will mount. The same demographic trend means that we cannot look to economic growth to camouflage the policy’s generosity. And yet pensions are something that people should be able to sort out for themselves through saving over their lifetimes. Relying on the state just fosters dependency – and it can only be funded by increasing the tax burden, largely on people who will not directly benefit. If liberalism is about fostering self-sufficiency and independence, this is surely a step in the wrong direction?

A similar logic applies to health care for the elderly. In Britain it is widely assumed that this will remain free and funded by the taxpayer. As the population ages the overall cost rises. Greater efficiency in the state spend can only get you so far. Social care for the elderly is a similar issue, except that this is only a universal benefit in Scotland – though there it was enthusiastically supported by the Liberal Democrats.

The answer to this puzzle comes in two familiar guises: the need for a safety net, and market failure. A safety net allows people who succumb to bad luck to get back on their feet. I am sure that highly sophisticated arguments can be made in their defence, but to most people it is simply being part of a civilised society. Once families and social solidarity could have taken most of the strain, but the demands of economic efficiency have broken these institutions down; so economic efficiency, and the taxes they can generate, should provide the solution.

The safety net idea isn’t entirely satisfactory when providing for old age, however. The capacity to earn at this stage in our lives is limited, so it is rather more than a just a temporary helping hand. However, it still means that your life can’t be entirely ruined by bad luck. But everybody is entitled to the state pension, not just those down on their luck. The triple lock may be required to keep the state pension for the destitute at an acceptable level, but should it apply to everybody?

What lies at the heart of the problem is a market failure. Start with an obvious problem. If pensions are means tested, then the incentive to save is destroyed until you get past an amount that gives you a reasonable pension. Let’s use some numbers to get this into perspective. The new basic state pension will be about £7,500 per annum in today’s money. To get an annuity of this amount, indexed to RPI (admittedly a mathematically flawed measure of inflation that tends to distort upwards) would cost in the region of £220,000 for somebody of 65, the current pension age. For a forty year working life, with zero real investment returns (I’m coming to that), that £220,000 takes a saving of £5,500 per year, which is over 20% of the average rate of pay (£26,500) before tax. Average savings rates are, of course, much less than that (typically 5-10% of household income).

But surely people can earn more than o% real return on their assets? Actually most people can’t. There are two problems. First is that investment returns are very low at the moment. Central bank interest rates are less than inflation (negative in real terms). All other returns take their cue from that. The prospects for higher interest rates are bleak; that’s they way the world economy is. There are too many savings chasing too few investment opportunities. To break this stranglehold you need a combination of three things: low transaction costs of investment, an ability to take greater investment risk by spreading it, and access what economists call economic rents – income that is not earned through adding wealth to society, but by exploiting an “unfair” advantage. These advantages are usually only available to the better off. For the first two you need a decent sized starting portfolio (over £1 million, say). For the last you need some kind of economic privilege. While the economy was expanding, and before the demographic crunch, you could, in fact achieve these ends by owning your own house. Rising house prices are a form of economic rent, earned by the ownership of land, which is in limited supply. That covers an awful lot of people, but these are now a privileged elite: it is getting harder to join them.

Can’t people band together to get a better return? That is what an old-fashion final salary pension scheme used to do. Administrative costs were low (because you the calculation of entitlements is simple), and investment costs and average risk was low because there was single, large investment pot. Unfortunately such collective schemes are another victim of the drive to ever greater economic efficiency, which destroys the large and relatively stable employers who are needed to sponsor such schemes. Collective action means the state.

The state is the only institution that can take effective collective action. And, with private sector investment opportunities in such short supply, increasingly the state has access to the best investment opportunities too (consider much infrastructure investment). And they have the chance to tax those economic rents. That is the central logic behind the new triple locked state pension. A basic minimum, which the public has every incentive to improve through private saving, which will, unfortunately, rarely add up to a great deal more.

Meanwhile, the various distortions of tax and regulation that inhibit private savings can be gradually dismantled. The government has started by dismantling the rules compelling people with pension plans having to buy annuities. Personally I would start to dismantle income tax relief on pension contributions, increasingly of benefit only to a wealthy elite, and which comes with a dense thicket of rules to prevent abuse. That is a formidable political challenge, though, and can only be achieved in small stages.

Because efficient long-term savings are not accessible to the vast majority of people, especially those without access to property assets, the state must intervene to fill the gap. That makes the economic liberal dream of a low-tax society an impossibility – the alternative is mass destitution, or a needs based system that will be economically less efficient. And if you add health costs and social care into the picture, the problem gets bigger.

The state must get bigger. The question is how to do this in the most liberal way?

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Britian’s police: unprofessional conduct

Carol HowardFor once the BBC News’s editorial priority seemed to be spot on. Top story on the 7am Radio 4 news was an astonishing case of discrimination involving a black police officer, Carol Howard. Amongst other things, it showed that the Metropolitan Police were systematically manipulating evidence. Alas by 1pm the story had dropped right out of the bulletin. Instead the channel carried a story about a potential paedophilia scandal in the 1980s, based on some very thin evidence. But this story should not be allowed to drop from our attention. Indeed it raises many questions that should be very worrying both for Londoners and the whole country.

Ms Howard joined the Met’s elite Diplomatic Protection Group in 2012. She was quickly victimised by her boss, Acting Inspector Dave Kelly. Mr Kelly appears to have assumed that Ms Howard’s behaviour was dishonest, and instead of handling this in a professional manner, he is accused of hounding her with unreasonable complaints, and he then become “hostile and aggressive” when she invoked a grievance complaint. Ms Howard then went on to bring a complaint of sex and race discrimination. The tribunal hearing this complaint asked to see a report on the original grievance complaint – but the Met’s management edited out all references to discrimination, saying that they were not relevant to the tribunal. They then claimed such deletions were a matter of policy to protect the Force.

The tribunal found in favour of Ms Howard, and was understandably very critical of the Met. All the Met has done so far is to offer this very weak statement:

We are aware of the decision of the tribunal. We are disappointed at the tribunal’s finding in favour of PC Howard.

The tribunal’s decision will now to be given full and careful consideration. We will review the findings, take legal advice and take forward any learning or actions as appropriate.

In other words: zero leadership, but we’ll ask our lawyers how to fiddle with our procedures. They are clearly hoping the story will go away. To judge by the speed with which the BBC has dropped the story, their hopes appear to be well-founded. It is now up to our politicians to on their case. This is one area were the London Assembly can really show its worth. Here’s hoping.

But evidently no major politician has seen fit to take the case on so far – perhaps the reluctance has something to do with the rise of Ukip, and the backlash against political correctness, by older white males in particular. If so our politicians will be letting the majority of people in London down – of all ethnic groups.

Here are the questions I would like to ask:

  1. How is it, 30 years after Lord Scarman first identified problems in the police, that this kind of behaviour seems to be tolerated by middle management in the police force?
  2. There seems pretty good evidence that Mr Kelly’s conduct was unprofessional as well as discriminatory. He has brought the service into disrepute. Has any action been taken by the Met against this officer?
  3. How was it that an attempt was made to manipulate the evidence from the grievance complaint. Is it legal? Is any disciplinary action warranted against any officer? Or should a more senior officer take responsibility for unethical conduct?
  4. Have such deletions affected other complaints? Have they affected statistics produced to the public about the number and resolution of complaints of discrimination?

And then there are the wider issues. The Police are a public service, funded by us as taxpayers. A quid pro quo is that they should be accountable, with a culture of public disclosure and truthfulness. Instead they seem to have a defensive culture, where the public seem to be treated as the enemy, and openness as a threat. Furthermore, proper professional standards seem to be lacking, and the application of discipline highly selective. If officers are unprofessional, they should fear the reaction of their own superiors; instead these superiors seem to rally round. After each scandal, I hear that police morale has been hit, and I hope that this is at last evidence that they have got past of the denial stage of the grieving process for their old ways. But I may be underestimating their resilience.

I am going to leave the last word to Ruwan Uderwerage-Perera, a former policeman and now a Liberal Democrat councillor. Here is what he said in a Facebook post earlier today (quoted with his permission) (and please allow for the informality of that medium):

“The ‘Canteen Culture'” states Prof PAJ Waddington (himself a former police officer) “is often portrayed as a pervasive, malign and potent influence on the behaviour of officers. The grounds for this portrayal are, however, insubstantial and appear to rely more upon the condemnatory potential of the concept than its explanatory power.”

As a former officer myself I believe this aggressive and macho sub-culture that further stamps the belief of ‘them & us’ between the police and the policed is not only still very much alive and well, but has proven resilient to the three plus decades of criticism since is existence was acknowledged by the police service following the Scarman Report of 1981.

The ‘Canteen Culture’ as a result of its very existence is exclusionary and as such Women, BME and Gay (sworn) Officers (for support staff and PCSOs and the like are never fully accepted) either have to acquiesce to the egotistical, male dominated, heavy drinking, womanising and otherwise hedonistic culture which is supported by the ‘work hard, play hard’ mythology or they are cast aside and will be subjected to further abuse.

I add ‘further abuse’, for even perceived membership of the group means that if one is different e.g not white male and straight then one will be the butt of the so called humour anyway, but at least the victim is ‘one of us’ for the time being.

In my opinion the continuance of this sub-culture holds back the service from becoming a professional body, and means that the service will remain believing that it is not part of society, but somehow is on some ‘crusade’ to save society from itself.

Update: 3 July 10.40am

As I hoped, some traction is being made by London Assembly members on this issue, pressing London’s Mayor, Boris Johnson. Mr Johnson, to his credit, does seem to be taking the matter a bit more seriously than the Met’s senior management. He has said he will review 34 other cases.

According to yesterday’s Standard, the Met have denied that the deletions were a matter of policy. That always did sound like a bit of a middle management excuse to me. Also Ms Howard’s lawyers have called for a public enquiry. I don’t agree with that. What is needed is proper accountability, up to the Chief Constable. A public enquiry will merely drape the matter in more evasion, obfuscation over evidence, legalese, and lost time. The answer starts with leadership, and if no leadership is forthcoming from the incumbents, we need new leaders. Quickly.

And just to be clear. This story is about London’s Metropolitan Police. But the problems uncovered are typical other British police forces.

 

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Birmingham exposes the hollow heart of Conservative education policy

Britain is ill-served by its news media. There has been a growing kerfuffle about Muslim-dominated schools in Birmingham. The issues dominating this in media coverage are the extremism of some Muslims, and the explosive relations between the Education Secretary, Michael Gove, and the Home Secretary, Theresa May, which they assume is all to do with Mrs May’s leadership ambitions. This wantonly ignorant coverage is not only damaging community relations, but it failed to shine any light on the failure of the coalition’s Conservative-led education policy. This matters because this policy has been given nearly a free run in the media, and supported by papers, such as The Economist, that really should know better.

We must start with Mr Gove, who has been in post since the government was formed in 2010, and is one of the Conservatives’ big hitters. A journalist by profession, he has strong views on both education and extremism, which he has not hesitated to put into practice. Liberal Democrats have moderated some of his more extreme positions, but many suspect that the Lib Dem leadership (in contrast to its activists) sympathises with a lot of what Mr Gove is trying to do. Instead they have concentrated on their own pet policy, the Pupil Premium.

At the heart of Mr Gove’s policy is the idea that education should be run as a quasi-market, driven by parental choice, and without the need for much in the way of government direction – rather in the way the private sector does. Schools are being progressively pushed into being “Academies” independent of local authority control, and new Academies, “Free Schools”, are being established without much of the obstructive bureaucracy that would have strangled many of them at birth under the previous regime. These Academies were not subject to the National Curriculum, though they were subject to inspection by Ofsted, the schools inspectorate, which focuses on a narrow set of core subjects (literacy and numeracy – with “behaviour” thrown in to satisfy conservative prejudices). The idea was that bad schools would fail to attract pupils, and so they would end up being closed, or management changed. Competition would impose discipline on the schools, and the whole thing would be more democratic because parental choice would not be intermediated by busybody officials, elected and otherwise.

Two other themes ran alongside this. One was the idea that existing education was not based enough on factual learning, with too much emphasis on wishy-washy “skills” and mushy “values”. Mr Gove recalled the curriculum of old-fashioned private schools and selective state grammar schools, which educated most off Britain’s elite. A second was a distrust of educational experts and officials, who Mr Gove took to referring to as “The Blob”, who watered down and undermined the reform process. The “Blob” was progressively dismantled.

In this mix we should mention faith schools. The Birmingham row does not involve faith schools directly, which has led a number of, excessively defensive, faith school supporters to claim that they are a irrelevant. But they are heavily bound up in the consequences of the row. Faith schools were not a strong element of Mr Gove’s ideas. They were rather an enthusiasm of the previous Labour government, who, it must be added, started the whole process of setting up independent Academies. Britain’s state schools have always included those run by religious foundations, in particular the Church of England in (rather obviously) England. These were joined by Catholic schools. Under Labour these were extended to Jewish, Muslim, Sikh, Hindu and no doubt other foundations. The Labour Prime Minister, Tony Blair (a Catholic convert) had the idea that such faith schools gave children a solid moral grounding. Labour generally found that it helped their clientalist relationship with ethnic minority communities. These schools have been given a great deal of freedom to run themselves along their chosen lines. So long as you keep giving us good test scores and exam results, the suggestion was, we don’t care how you do it.

Finally in this background exposition, I need to mention Muslim extremism. Terrorist groups have successfully recruited a number of young British Muslims, and they have carried out a number of acts of violence both in this country and abroad, in such places as Syria. It is considered my many to be the biggest security threat the country faces. These extremists have very conservative instincts, such as believing in the veiling of women, but they tend to be converts and not very conversant with the actual teachings of Islam. Their extremism is fuelled by a general feeling of rejection and alienation.

In the public eye however, these young extremists have become tangled up with the conservative views of many Pakistani and Bangladeshi communities. These are horrified by what they see as the laxity of Western moral values, and do not want their children to be corrupted by them. They share many of the conservative instincts of their extremist co-religionists, along with an acute sense of injustice over the treatment of Muslims abroad, especially in Israel and Afghanistan; but there the similarity breaks down. Terrorism plays no part in their outlook, and certainly not in a domestic UK context – they may view Palestinian suicide bombers more sympathetically. But the extremists hover at the fringes of these communities, and that leaves the British state with a very tricky problem. They need intelligence from the established minority communities, and so to maintain good relations with them. But they are quite unsympathetic to many of their beliefs.

Into this delicate situation wade opportunistic journalists and careless politicians, Mr Gove among them. To them there is a direct line between the terrorist threat and conservative religious values. Most of the white community assume this to be the case, and happily lap up this message. Almost no politicians attempt to put a more realistic public gloss on this.

And so when allegations emerged that conservative Muslims had taken over a number of state schools in Birmingham (as part of a “Trojan Horse” plot), Mr Gove assumed that terrorism was at the heart of it, and so did most of the public. He steamed into a delicate situation, upsetting community relations and the Home Office, responsible for policing. The schools had been rated highly by Ofsted, who had focused on academic achievement, which was strong. The inspectors were sent in again with a different agenda, found evidence of  a conservative religious agenda, and, with a bit of ingenuity, ways in which these breached requirements of state-funded schools. The schools are in the process of being transferred to new management.

But the problems have only just begun:

  1. What has been alleged is that school governors, recruited from the local community, took the schools over and forced them into a conservative religious agenda. The school populations were almost entirely drawn from the local Muslim communities. But this is surely what school governors are supposed to do? They set the direction, ethos and strategy of the school. Their actions appear to have been perfectly popular with parents (though not staff). And though not faith schools, the widespread political support for faith schools would not have suggested to them that what they were doing was a bad thing. They were simply picking up the ball tossed by Westminster politicians and running with it.
  2. The actual alleged abuses are not so black and white. Segregation of the sexes? We still have 100% segregated schools. Allowing tradition Muslim dress? A lot of perfectly respectable schools do that already – and that is surely right. The same goes for making provision for prayer, which after all can be open to all faiths. A culture of intimidation? sounds a bit like my English private school education. And surely school management has a right to make the changes it wants, and this always leads to such allegations. The were, predictably, no demonstrable links to terrorist extremism.
  3. We are now told that Mr Gove wants “British Values” to be taught at all schools. Not only is defining this a minefield, but it is a step away from the “fact-based” principles that he had been so fond of espousing. And how will “real” faith schools, and not just Muslim ones, end up if judged to the same standards as those used in the second wave of Birmingham Ofsted inspections?
  4. Sorting out this mess is going to take a lot of work. Schools can’t in fact be left just to get on with it. They are going to need help, guidance and correction from an intermediate level of officialdom. A newly recreated Blob, in fact.

And so we find that parents are free to choose, provided they conform Mr Gove’s own version of political correctness. It is very easy to understand how the local Muslim community (and no so local ones) feel victimised – judged by double standards from a society that has lost its moral compass.

The government’s reforms are barking up the wrong tree. Here in London we have an outstanding example of how seemingly hopeless schools in deprived areas can be turned round. This did not need the creation of Academies; the existing local authority structures were up to the task. What it is did need was strong and credible leadership. Politicians can lead from on high, but ultimately this leadership has to come from experts who live and breath schools. The country was lucky enough to have plenty of these. But they have been side-lined and pensioned off.

Coalition policy is hollow at its heart, and the last four years have been largely wasted. Even Labour could do a better job than this.

 

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The remarkable politcal success of Michael Gove

Shortly before the British General Election in 2010 a headteacher at a local school told me: “Well, however is the new Education Secretary cannot be worse then Ed Balls.” Mr Balls, now Shadow Chancellor, was then Labour’s Education Secretary. He had built up a reputation for political posturing and bullying, while presiding over new Labour’s muddled education policies. I have not asked that headteacher how she thinks the new education Secretary, Michael Gove, compares to Mr Balls. I don’t have to; her prediction was spectacularly wrong. Mr Gove is even more loathed by education professionals than was Mr Balls. But Mr Gove, unlike Mr Balls, counts as a political success.

Mr Gove has been in the news recently. Yesterday he gave a speech spelling out his vision for state schools; over the weekend there was a fuss over his failure to reappoint the Chair of Ofsted, the schools’ inspectorate. His spin doctors have been pushing out a story of his reforming zeal against an educational establishment referred to as “the Blob” after a 1950s sci-fi movie. This has received a lot favourable coverage in the right-wing press. More neutral observers, such as the FT as well as the BBC, seem content to faithfully report Mr Gove’s spin while not openly taking sides.

All this is in stark contrast to the government’s attempts to reform the NHS, led by former Health Secretary Andrew Lansley. The government side of this argument hardly got a look in, as the picture of chaotic reforms took hold. This negative coverage stiffened opposition to the reforms, muddling them further, so that they have ended up being the biggest blot on the Coalition government’s record – though some good may yet come out of them. There has been little public support for opponents to Mr Gove’s education reforms, however. Mr Gove, an ex-journalist, is clearly a better communicator than Mr Lansley, an ex-doctor. The education system is also much simpler than the health service. But the political skills of Mr Gove’s “Blob” are totally lacking, unlike those of the doctors and nurses opposing Mr Lansley. The teaching unions have long been a bit of a comedy act, resisting basic workforce reforms, like performance appraisal, that non-teaching professionals have long since got themselves used to. Other educational professionals rarely raise themselves beyond the minutiae to give politicians and the public a clear vision of what they are trying to achieve.

Are and were British schools in a mess? Yes and no. International comparisons show a mixture of good and bad news. Overall performance is unspectacular but not awful. We have a long “tail” of under-achieving pupils that schools give up on too quickly. There is a lot of mediocrity, especially amongst rural schools, who “coast” by getting average performance from pupils capable of much more. But over the last two decades, the Blob has pulled off one of the most spectacular episodes in school improvement in the world: the transformation of London schools. This has given the lie to the standard line of the Left that the educational prospects of poor pupils will only be transformed once other social problems, like jobs and housing, have been fixed. The Borough of Tower Hamlets, one of the country’s poorest, regularly outperforms much wealthier districts outside London.

The transformation of London’s schools remains one of the last Labour government’s greatest achievements. But politically, it is problematic. It owes nothing to the various policies pushed by politicians and think tanks, such as creating semi-independent Academies. It was largely down to good old fashioned management: officials at national and council level holding school managements to account, and replacing heads of mediocre schools. As a result politicians are strangely reluctant to take the credit.

What of Mr Gove’s reforms? They are a mix of good, bad and ugly. On the good side, Ofsted’s remit has been sharpened up a lot. Previously it had expanded into such areas as “community cohesion”, which are highly sensitive to context, and inspectors did not show any great aptitude. Now they focus much more sharply on the quality of teaching. This gets to the core of what drives school performance. Some older teachers hate this – but it really isn’t any different to the pressures that accountants and lawyers find themselves under. Younger teachers seem accept the much greater level of accountability that is expected – and respond well to it. (My evidence on this is rather anecdotal though – based on my experience as a school governor in a London primary school).

Another good thing, though largely unremarked, is that Mr Gove’s Academy programme is putting private schools under real pressure. Many private schools outside the South East are now signing up to be state schools, run as academies. My local Free School is recruiting many middle class youngsters that would formerly have gone private. No doubt some on the left see this as a sinister subsidy to the middle classes – but a much higher level of social mixing occurs at these new state schools than would have occurred at private schools. And social mixing at schools helps the poorer children achieve more. It is worth noting that this policy works as well as it does thanks to two measures insisted on by the Liberal Democrats: a “pupil premium” giving extra funding for poorer pupils, and insisting on non-academic selection. Many Conservatives want to recreate academically selective Grammar Schools. These may once have been engines of social mobility, but now academic selection is simply used as a way of weeding out pupils from poorer backgrounds and reducing mixing.

The bad: there is a lot of wasted energy on changing things that don’t need changing. That particularly applies to changes to the curriculum. Mr Gove and his supporters seem to have an old-fashioned view on what should be taught in schools, to reflect a 1960s private education. Now it is true that the Blob has developed a lot of woolly curriculum ideas that don’t seem to be of lasting educational benefit (especially in “applied” qualifications), but they were gradually sorting out this mess by themselves. Mr Gove seems to have little idea as to what modern universities and employers actually want the product of a secondary education to be. A lot of the drive to turn state schools into academies seems a bit pointless, and will probably create problems of accountability in later years. It has a sinister aspect too: the Academy chains who are the main beneficiaries are politically well connected – and it is their political connections that seem to be critical in their success.

The ugly. We are getting more religiously founded state schools. Given religiously founded schools’ role in cementing toxic community relations between Catholics and Protestants in Northern Ireland and Scotland, I am very nervous about this. But it could be that making these newer schools conform to modern educational norms, and forcing them to engage with a wider civil society, will bring benefits. But I really would prefer it if our children went to schools attended by children of many faiths and none. But the alienation of some religious communities is such that they would not engage in such arrangements, and for them a state religious school is a second-best.

My verdict on Mr Gove is that he is not quite as evil as he cracked up to be. But he is wasting a lot of time and energy. What should be absorbing energy is teaching standards, establishing a broad curriculum appropriate to modern life, and establishing better systems of accountability which don’t tempt schools to game the system by neglecting “hopeless” cases. Fix these and Britain’s state schools would be world class. But alas, we are distracted by political gimmickry.

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Is there a case for complementary medicine on the NHS?

Last weekend there was outrage from The Daily Mail that Prince Charles had being lobbying government ministers to give more space for complementary medicine on the NHS. This provoked a piece on the BBC Today programme (at 0833) on Saturday morning. In this UCL’s Professor David Colquhoun made short work of Tory MP David Tredinnick, who was attempting to defend homeopathy, the target of choice of those wanting to drive complementary medicine to the lunatic fringe. Indeed, very few advocates of complementary techniques do a decent job of defending them in public forums, quickly resorting to dodgy mumbo-jumbo and dubious scientific studies. And yet there is a case to be made.

I find it a bit awkward to make this case myself. I have not used such therapies, and nor am I likely to. I am simply in too deep with conventional scientific scepticism to give any credence to their supporting patter – “energy fields”, “life forces”, or homeopathy’s “like cures like”. And without that, I suspect the techniques lose a lot of their impact. However, people I like and respect do use selected complementary techniques, and they have value.

The best way to start a defence of complementary medicine is attack. Conventional, evidence-based medicine has its own weaknesses. The technique depends on breaking health issues down into bite-sized problems, and then testing therapies to treat them using statistical tests against a placebo. Once a therapy passes this test, it then gets rolled out to anybody suffering from the condition concerned. This approach benefits from scientific rigour, and has steadily improved the effectiveness of conventional medicine over the generations. More recently the focus of the technique has been more on finding what works than necessarily why. This makes it less vulnerable to dismissing therapies that do not work in theory (as happened in some spectacular early medical failures in the 19th century over the importance of hygiene and clean water). But it has certain blind spots designed into it.

The first problem concerns placebos. The reason why this is the null hypothesis against which therapies are tested is that placebos have a measurable beneficial effect in many cases. The main scientific sceptical explanation for any benefits of complementary therapies is that it is a placebo effect. A supporter might go further: complementary therapists understand how placebos work better than conventional therapists: it isn’t just a placebo, it’s a top class placebo. But you can’t test a placebo against a placebo. Back in the 1980s a practicing GP told me how one of his favoured techniques was to prescribe harmless sugar pills to his patients, and he claimed great benefits from doing so. Surely if that sort of thing is allowed on the NHS, why can’t other placebo therapies? And the answer isn’t to ban all placebos – though doubtless that is the approach taken by conventional medicine advocates; something tells me that my GP wouldn’t be allowed to prescribe his sugar pills nowadays.

The second problem is the fragmentary approach of conventional medicine. Fragmentation has been elevated to a positive religion in the NHS. You can’t experience the service without being handed to several different professionals of different shapes and sizes, each with their carefully rationalised boundaries. Each handoff creates risks, and stories of catastrophic breakdowns in hospital treatments abound – patients left for hours on trolleys, starving to death, or forced to drink water from plant pots – and even more cases where post hospital after care breaks down. One of the few common themes across complementary disciplines is that they are holistic. Indeed the very idea of holistic treatments (now very much part of modern management jargon) was originally derived from complementary medicine, or that is where I heard it first, anyway. You see a single therapist, who gathers as much information about you and your condition as she can, integrates it, and then moves on to treatment. The diagnosis is likely to be a large part of the cure in its own right. And yet scientific testing of complementary therapies is liable to start only after the diagnosis has ended. All this proves is that if you go out to a shop and buy homeopathic remedy, you are on to a hiding to nothing. That does not prove that the complete homeopathic therapeutic process is useless.

There is a third problem. Evidence has to be gathered by using large numbers of people. In this process there is very limited opportunity to distinguish between the different needs of individuals. As a result the evidence tends to show not that the therapy works for everybody, or even most people, but that on average it is better than the placebo. The result is that lots of people are prescribed treatments that are, for them as individuals, useless. How many people do you know who complain of medication that gives unpleasant side-effects but does not seem to be doing them any good? The scientific evidence says they could be right, but is rather helpless after that. Complementary therapies are much less likely to have side effects, though they don’t have the proven benefits either. I do wonder whether for some conditions the overall cost-benefit balance of complementary therapies against conventional ones is constructed fairly.

And finally we need to address the question that few advocates of scientific method will admit to. That scientific rigour has its costs. There are areas of potential knowledge into which it is incapable of reaching. The higher your standard of rigour, the less that is capable of being revealed. The method is too blunt an instrument to deal with many types of issue. It can’t handle too many variables at a time, especially if they are interdependent; and any ideas that mess with constancy of the laws of nature are ruled out a priori. It struggles to find ways of testing mind over matter propositions, which often play a part in complementary medicine’s thinking. How many people do you know who feel unwell, go to doctor, who commissions tests that just don’t find anything? You don’t have to take on mystical ideas to see that the bluntness of conventional diagnosis leaves huge areas of illness as a mystery. And when this happens conventional medicine is worse than useless. It creates stress and frustration, and doctors start to disbelieve the patient, making the problem worse, not better. Complementary techniques are much better at handling patients suffering from these sorts of problems.

So what are my conclusions? A little more humility on the part of the advocates of conventional medicine is warranted. They don’t know everything; they are not very good of handling conditions that are difficult to diagnose; they are too sanguine about the collateral damage arising from evidence based treatments on those they do not help; and they fail to see how the fragmentary way they handle problems is bad for patient health. With this humility they might understand that once they have eliminated the nice, well-defined illnesses in their comfort zone – cancer, heart disease, strokes, bacterial infections et al – being open to patients who want complementary treatments is often the best way forward. And I haven’t even mentioned the corrupting influence of big pharma.

 

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The NHS crisis: while politicians look the other way, what should we do?

The NHS is deep in a long term crisis. Last Thursday NHS England published a “call to action” outlining the emerging crisis. This attracted a day or so of news coverage, focusing mainly on a £30 billion funding gap. But there was no political debate, and the story quickly died. It was replaced yesterday by a story on the NHS’s abuse of the “Liverpool Care Pathway” for end of life care, and today by an investigation on struggling hospitals. Both stories are backwash form the continuing struggle of NHS management and staff with financial pressures. But where are the politicians? Labour are waiting to pounce on stories of struggling accident & emergency services to promote a general air of government incompetence on the NHS; the government try to play things down, blaming any problems on long standing issues not tackled by the previous government. A debate about the long-term options for the service it is not. So what should they be talking about?

The dimensions of the crisis are quite clear. Britain’s NHS is almost entirely funded from tax. But after the economic crisis of 2007-09 the tax base has shrunk. Furthermore a number of trends, not least the increasing proportion of older people, point to a slowing down of the overall rate of growth in the economy and hence taxes. And yet some of those same trends will create growing demand on the NHS. The government has promised to protect the NHS budget in real terms, much to the chagrin of right wing critics, but this will not solve the problem of rising demand. The NHS England report settled on a headline gap figure of £30 billion by 2021  – after toying with £60 billion by 2025, the number used by Health Service Journal (HSJ) in its preview.

The strategy is to buy time through efficiency savings. As a large, monolithic organisation, with weak accountability, inefficiency is rife. NHS top management has been ratcheting up pressure on the component services by progressively squeezing the available funding, , in a process known as “the Nicholson challenge” after NHS England’s chief executive, Sir David Nicholson. The NHS England report claims that this is on track to deliver its target of £20 billion efficiency savings by 2015, but there is plenty of reason to doubt its efficacy, as the number of crises with a financial root seems to grow.

But the strategic point is that efficiency is not a long term answer to the pressures. The NHS paper calls for fresh thinking, but seems to rule out most radical ideas, like charging for, or heavily restricting services, although in doing so it is only holding to the current political near-consensus (the far right does not go along with this, but everybody else does). Let’s take a step back and look at this.

The first point to make is that increased demand for health services in the economy will be met by increased supply. Occasionally you hear people suggesting that the economy can’t bear an increase. But there is no fundamental economic reason why the proportion of the economy taken up by health care cannot increase substantially. It does not depend overly on imports, and there are plenty of things the public can give up to make way (own fewer or cheaper cars or clothes, go out less, and so on and on). Healthcare offers the prospect of a longer life and less pain; it is a consumer proposition, as I have pointed out in an earlier blog, to die for. If there is demand, there will be supply. The only question is how that supply will be met.

There are broadly four ways the NHS will meet this crisis:

  1. Taxes will be progressively increased so that taxpayer funded services maintain their current profile overall. This is clearly what is favoured by most NHS insiders, and left wing policy types who like the paternalist structure of the current NHS.
  2. It will stratify into a class-based service, where only poorer people will use it, while richer people go private. This will happen because the NHS service will be considered dangerous, shoddy, and accessible only after an intolerable wait. This is largely what has happened to NHS dentistry, and it is what will happen if the NHS is allowed to muddle on with its current level of funding (or if funding is cut).
  3. The NHS will concentrate on excellence in a smaller core of services, while letting people go private for others. However healthcare has few neat boundaries, and it is difficult to see how this would work in practice.
  4. The NHS will start charging for more services, and accepting co-payments for cosmetic and other add-ons. This may be done with increased collaboration with the private sector, rather like NHS optometric services. This is the direction of travel favoured by the right, apart from those who secretly favour option 2.

These solutions are not mutually exclusive, and indeed option 3 is probably only viable in conjunction with 4.

The first strategic question is how far new taxpayer funding will be forthcoming. Many seem to assume that it will be. John Appleby, economist at the health think tank the King’s Fund,  assumes this will be so: the economy will be growing again by 2025, and public demand for increases to real spending will return. I’m not so sure: the headwinds on the economy are severe, and I don’t see any return to the growth rates we have previously seen for more than a two or three years in a row. Meanwhile demand from other areas of public expenditure has been suppressed and could bounce back. And I think public attitudes to higher taxes have changed, after the general squeeze that has been put on living standards. Some left-wingers assume there is large pot of money available from taxing rich individuals and businesses. This is open to doubt, however, and it has proved a volatile source of tax revenue both Britain in the past, and to other economies, like California’s, whose public funding depends heavily on taxes on the rich.

Besides, I do not think that taxpayer funding is particularly efficient. It means that resources tend to be allocated top down according to political objectives, and not where it is really needed. And difficult problems tend to be left unsolved rather than confronted. My guess is that we will end up with option 4, after having given options 2 and 3 a try. It will continue to be a very bruising time for the NHS.

For those that want to avoid this, I think the most promising way forward is to bring health services into a complete rethink of public services to make them more integrated with each other, and centred on people rather than symptoms. And in case you think that sounds like motherhood and apple pie, its practical consequence means dismantling current power structures, and pushing towards democratically accountable local control. That will not be popular amongst NHS professionals, and we know how much noise they can make. Some on the left are starting to think this way, and while I don’t trust the left, with their penchant for paternalism, this may be the basis for a useful political coalition. One interesting aspect of this is that the other services (personal care, housing) with which the NHS would be integrated are not “free at the point of use”, considered so sacred in the NHS, which may allow the whole question of charging and co-payments to be fudged in a constructive way. Here’s hoping that something can be achieved along these lines.

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Will Labour let the Tories win the 2015 election?

Margaret Thatcher’s death on Monday has distracted attention at rather an interesting moment in British politics. There is a vigorous debate about how Labour should fight the next General Election, which should be in 2015 (one of the very few Lib Dem inspired constitutional changes to get through was one on fixed term parliaments). I have picked this up from two articles. First was an article by Guardian journalist Jonathan Freedland last Saturday: Labour must draw the sting from welfare, or lose in 2015. Mr Freedland is nominally an independent journalist, but this article seemed to be very well coordinated with material coming out from the Labour leadership, including a TV interview with deputy leader Harriet Harman. It sounds their leader’s, Ed Miliband’s, party line. Then came former leader and prime minister Tony Blair in a widely reported article in New Statesman: Labour must search for answers and not merely aspire to be a repository for people’s anger. The link is to a summary, which is all I have read; the full article is in a special Centenary print issue. I don’t think either have identified the right strategy for 2015, though Mr Blair is closer.

Both writers attack a complacent view which seems quite popular in Labour circles, and which is often associated with another Guardian writer, Polly Toynbee (though not by either author, and possibly not fairly). This is that the Conservative led coalition is in a mess, having picked the wrong economic strategy, and heartlessly cut important parts of the British system, such as working age welfare. The Conservatives are very unpopular; public anger is raging. They even face a challenge from the far right, Ukip, which is causing panic and leading them to revive their reputation for being the nasty party. Meanwhile Labour have already dealt a mortal blow to their coalition partners the Liberal Democrats, who face a private battle with oblivion in a few dozen constituencies across the country, and are reduced to irrelevance everywhere else. On this reading, all Labour have to do is to ride the anger and say as little as possible about what they would do in government, beyond the implicit or explicit promise to roll back the Tory cuts. The coalition parties will lose the election without Labour having to try very hard to win it.

But both authors suggest that the middle ground of British politics has shifted, to something much sourer than it was before the crisis. Before Mrs Thatcher’s death, the left had been stoking up the anger over the government’s welfare reforms, and especially some changes on housing benefit that they dubbed “the bedroom tax”. But into this maelstrom stepped the novelist A.N. Wilson and The Daily Mail who suggested that odious killer Mick Philpott was a product of the British benefit system, showing that cuts were needed. And then Chancellor George Osborne joined them, to apoplexy of the left. Labour’s anger is genuine, but it does not seem to be hurting the Conservatives. Opinion polls put Labour on about 40% to the Tories’ 30%. Add in more than 10% for Ukip and the right is level pegging with the left before the fight has really started. Labour are appealing to people who already vote for them, or who live in Northern urban constituencies where their votes are not needed.

The threat to Labour is quite clear, with a parallel in 1992, another election in difficult economic time. The weak economy is causing hardship across the board, and not just amongst those on benefits. If the economy picks up in the next two years, the government will get credit. If, as most people expect, things stay grim, then that sour mood will continue. People don’t buy the argument, popular amongst trade union leaders, that bit of extra government spending will stimulate the economy into a virtuous circle of growth. As in 1992 the Tories will claim that Labour’s plans to restore the cuts will simply make things worse by raising taxes. This will be very hard for Labour to fight if they follow the Polly Toynbee strategy, and they might lose rather than gain seats. A Lib Dem meltdown, predicted gleefully by Labour activists, will simply deliver a full working majority to David Cameron.

What to do? Mr Freedland suggests a programme of radical reforms to welfare, which will inspire the public with fresh thinking against Coalition incompetence. Ideas include moving towards the contributory principle for benefits (linking benefits more tightly to contributions, as many other European countries do), increased support for childcare, guaranteed jobs after a year of unemployment, and so on. These reforms will tackle the crisis of legitimacy that Mr Freedland highlights as the problem with the benefits system. This seemed to chime with what Ms Harman was saying on the television, and which I had read elsewhere from another Shadow Cabinet member.

What Mr Blair is suggesting is not clear, certainly from the article summary. He asks questions rather than provides answers. He does not seem to be going down the radical reform line, though. He suggests things like building more houses (in his case probably by building private sector houses on green belts), more computerisation of government services, and using DNA databases to tackle crime more effectively. Overall this is much closer to what the Coalition is already suggesting. On the economy, he does suggest industrial strategy, but not re-balancing. He even suggests rebuilding the finance sector. But then he does not accept that the British economy was more vulnerable than others to the financial crisis. More pleasing to liberals, he suggests challenging the right on Europe and immigration – though this can be read as justifying his policies when he was last in power.

Mr Freedland’s approach would be a serious mistake. If the Coalition has shown anything, it has shown just how difficult reform is, especially in hard economic times. All reforms create winners and losers. Politically the winners keep quiet, but the losers shout like mad. And reform ideas put together quickly tend to fall apart quickly. Any programe of radical welfare reform would fall apart under the full weight of attack, led by a press pack that still tends to set the political agenda. They will be portrayed as expensive and muddled; and any areas where savings are suggested will be attacked vigorously so that the losers’ voice is heard. It is simply too late to be radical. The country has reform fatigue. Remember the referendum on reforming the electoral system? An idea that seemed quite popular at first fell apart under concerted attack from the right.

Mr Blair is closer to the mark only because he seems to be less radical. But his central idea of trying to restore the reputation of the last Labour government is surely a dead letter. What Labour should be doing is learning from the way he secured a landslide at the 1997 election. He did this by signing up to 95% of the Conservative government’s policies, with a few carefully chosen and well publicised exceptions, while appearing more cohesive and inclusive than his opponents.

Likewise Mr Miliband needs to sign up to the bulk of the welfare reforms, with some token exceptions. Unfortunately reversing the “bedroom tax” would be a poor choice: the change only applies to social housing tenants, so private sector tenants either have to be included at great expense, or else they will protest as to why they are being left out. Personally I would would focus mainly on reducing the costs of childcare at the expense of some pensioner benefits – though the coalition parties might jump on this bandwagon.

But Labour needs to act now if he is to do something like this. The activists will hate it: so they need enough time for the fuss to die down, before they return to their visceral hatred of the Tories for motivation. But I don’t think Mr Miliband will go down that road, though.

David Cameron is not a particularly effective Prime Minister. But he is the most skilled politician amongst the party leaders. He has an excellent instinct for the political middle ground, and he is slowly but surely manoeuvring Labour into a cul-de-sac. Whether he will win a majority in the 2015 election is open to doubt: but I would bet good money on the Tories being the largest party.

 

 

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The NHS: how the accountants are hiding dubious policies

The NHS is quite high up the news agenda these days. From the media there seem to be two big issues: culture and privatisation. The mainly right-wing press say that much of the NHS lacks a caring culture and this often leads to a breakdown of service. Left-wingers, and NHS insiders, worry about the new commissioning rules, and whether unscrupulous private companies will bid their way into contracts that destroy what is good about the service. These are both valid concerns, but a third issue should be causing more controversy than it does: funding. Not so much the NHS’s overall budget, though that too is worthy of debate, but how it allocates what it has. Recently the Health Service Journal has highlighted no less than three quite distinct issues on the topic. Politicians should be paying attention.

The first was an opinion article on 14th February by Robert Royce, a visiting fellow at the King’s Fund, the health think tank. His subject was the Mid Staffordshire Foundation Trust: but not the Francis report, but the preceding report by Monitor, its regulator. This report questioned the trust’s financial viability, suggesting that the hospital lacked scale. Hospitals like Mid Staffs are funded mainly through something referred to as “the tariff”, and which used to be called by Orwellian name “Payment by Results”, which was put in place by the New Labour government. This puts a price on every service episode the hospital performs: payment by activity, rather than by results. This system is often portrayed as being a commercial, market type discipline, but the tariff looks like no market tariff that I have ever seen. It is massively complicated, requiring big information systems resources to work.

What the tariff does remind me of is a transfer pricing system to allocate costs internally between two fractious units of the same organisation, who hope that by referring the problem to management accountants they can find an objective resolution. As the accountants grapple with the complexity of the problem they add layer upon layer of detail, in a hopeless quest to replicate the infinite complexities of real life, resulting in something which is nearly useless for management purposes. The system is designed for a political rather than a commercial environment, with the aim of pretending that strategic value judgements are mere technical problems. In the NHS almost all commentators go along with this pretence.

Mr Royce points to one pernicious value judgement in the tariff. It is that emergency services are bad, and elective services are good. Mid Staffs is perfectly viable financially on its elective services, but is being dragged down by losses on its emergency services. What if the tariff were raised for emergency services and lowered for elective, to genuinely reflect the underlying costs? The the hospital’s viability might look altogether different.

The second article was in the magazine’s “Resource Centre” section on 14th March, and is entitled The real reason for “failing” hospitals. It is by Sheena Asthana and Alex Gibson from Plymouth University. This is dressed up a piece of academic data analysis, but it is politically pointed. The authors look at the funding formula for Primary Care Trusts (PCTs: the bodies that fund the hospitals, at least until 31 March), and tries to correlate troubled hospitals and underlying population characteristics. They find that there is a strong correlation between hospital stress and a high proportion of older people in their catchment area. Their claim is that the funding formula is diverting financial resources away from these areas of greater need towards areas that are less wealthy – and this is the fundamental reason why so many hospitals are failing.

The last government was obsessed with addressing “health inequalities”, an expression that I hate because it implies that the solution is making things worse for the better off, rather then improving the lot of the worse off. And if Ms Asthana’s and Mr Gibson’s study is to be taken at face value, that is exactly what is happening. The present government show no sign that they want to address this awkward issue, and, according to the authors, much the same allocation is being ported into the new system.

The third article was another opinion article, this time by accountant (sorry, independent consultant and former NHS finance director) Noel Plumridge on 21st March. This looks at something that has been bothering me. If the NHS budget is protected, and increasing at a rate faster than most people’s pay is rising (2.6% as against 1%), how come so many NHS organisations are under such financial pressure? He finds the figures for next year’s budget less than transparent but concludes that there are no plans to spend a large chunk of the money at all: they are destined for unspent surpluses or contingency funds to “mitigate risk”. These surpluses are a point of difficulty: the individual trusts that make a surplus are supposedly allowed to reinvest them in future years. But under Treasury rules the NHS as a whole must hand the funds back to the Treasury for good. Is this just a backhand way of breaching the promise to ringfence NHS funding?

I only subscribe to the HSJ because I forgot to cancel it after my attempt to find a job in the NHS ended in failure – now I find interesting articles nearly every week. What these three articles show is that there aren’t enough accountants in politics. NHS leaders are being allowed to get away with some highly contentious political policies by dressing them up in complicated accountancy.

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