Public Services – Page 4 – thinking liberal

English education policy: battle looms between the think-tankers and the grassroots

Every so often I see a story that the British (or more correctly English – though she sits in the British cabinet) Education Secretary is pondering a bid for the Conservative Party leadership when David Cameron stands down. I find this entirely incredible. Her career to date (she is in the second year at this job) has been devoid of either vision or political nous. The Conservatives can elect lemons to their leadership, but surely not even they are that stupid?

The first reaction to Ms Morgan’s appointment amongst the small section of the public that cares about these things was relief. Her predecessor, Michael Gove, had some good ideas, but was too full of himself, and was guided by a vision of Britishness and education that looked back rather than forwards. He annoyed teachers even more than his Labour predecessor, Ed Balls. But the transition was followed by a deafening silence; nobody knew what Ms Morgan was about. They still don’t, but two radical ideas are being put into play under her leadership – though it isn’t clear whether she is promoting them because she really believes in them, or because she is responding to pressure from elsewhere. They are to force all schools out of local authority management to became “Academies”, and to rationalise the financing of schools so that their public funding is based on a single, transparent formula. Both are classic Westminster-bubble policies, favoured by think-tankers and journalists little tainted by the practicalities of politics.

Most of the political heat so far is being taken by the Academies policy, which was announced by the Chancellor of the Exchequer, George Osborne, rather than Ms Morgan herself, very revealingly. Academies represent a new legal framework for running state schools, which do away with layers of accumulated regulations, and replace them with something more contractual, offering all concerned more freedom. That is the best bit about the idea. The politically important bit is that they are outside local authority management, and are instead run independently or as part of chains or localised groups. Many on the right, and not a few in the political centre, consider this way of running state schools to be a radical improvement, and project all sorts of benefits, such as empowering teachers or parents, onto it. I will not examine these claims in this article, though I have not changed my view that the issue is relatively unimportant, and not worth the political effort that has been put into promoting it. The question is whether the idea is practically feasible.

And here there is a basic problem. The idea, like so many neoliberal ones, is for a glorious welling up of initiative from the bottom up, from the schools who will take up the idea and follow it through. But in order to implement it across all schools, it requires a top-down process to make sure they all do it, and that it is done in an orderly way. Who is to do this top-down management? The Department for Education has not got the capacity. The academy chains are not geographically coherent, and in any case the current view is that big chains add no value. The obvious answer to this is that local authorities (LAs) will have to fill this gap. And yet the whole idea is to rubbish the role of LAs. This problem only now seems to be dawning on the government. It will require a lot of political skill to navigate, from a minister that has shown little of it to date. In the end the LAs will no doubt come to the rescue, but they will extract a price that will make the government look as if it backtracking.

Still, at least that problem looks soluble. I suspect the problems thrown up by the new funding formula will not be. “Fair Funding” as it is called is not a new idea, or even a bad one in theory. There are constant complaints that the current system, different in each LA area, favours some schools over more deserving ones. But the idea hasn’t been implemented because it, too, comes with major political snags. The essence of the problem is that a system designed to remove political discretion is, by its nature, very hard to manage politically. There will be many winners and losers from the new arrangements, and these will not fall in way that is politically convenient. It will punish friends and reward enemies. The think-tankers no doubt think the formula will punish Labour supporting city boroughs, especially in London, while rewarding Conservative shires. Alas it will not be so simple.

We have had a trial run of this idea in miniature, when the coalition government forced local authorities to adopt a standardised formula to fund their schools, including any Academies in their geographical remit. I had a ringside seat on this, as I was (and I still am) a member of a Schools Forum, the body comprising school representatives that oversees school finance in each LA area. The first pass produced an arbitrary series of winners and losers, including some major ones. The priority quickly became to flex the formula so that the number of losers, or big losers, was reduced, abandoning any idea of theoretical principle. Other LAs did the same thing, and each has ended up with a different way of doing it. The exercise was hard enough to run at LA level; it will be yet harder to handle at national scale. Extra money could make the process more manageable, but extra money is not available.

The government seems blithely unaware of the coming storm. It has put out a first phase consultation on the structure of the formula, with the idea that the impacts of it will be discussed in a second phase, once this has been agreed. But without knowing the impact the proposal looks like motherhood and common sense, and so has raised little controversy – no doubt lulling all concerned into a false sense of security, while cutting down political room for manoeuvre.

Behind this looms an important political conflict. English schools co-opt civic society co-opt civic society to a much greater extent than any other public service. A large number of civically-minded and politically influential individuals are drawn into running schools, from PTAs to school governors. I am a case in point; it is my only civic activity that is not directly political. These individuals form the political grassroots on whom the political “ground war”, and most political careers, depends. These grassroots activists are being put in conflict with the young think-tankers for whom such low level civics is irksome, and want to change the world from the top with the sweep of a pen.

It will take real political skill to turn this conflict into a constructive tension rather than destructive warfare. My guess is that Ms Morgan and her aides lack that skill. Stand back for a political train-wreck

The Metropolitan Police: institutionally stupid?

Some years ago London’s Metropolitan Police were accused of being “institutionally racist” by a learned judge. Recently I was talking to an experienced police officer (not from the Met, as it happens), who took great exception to this accusation. Now I have no strong evidence that the original accusation was fair (nor that it wasn’t), and neither do I feel able to comment on how things stand now on that matter. But it goes with the territory that institutional failings are often invisible to the institution’s members. This came to mind in the latest kerfuffle over the police’s investigation of child sex abuse claims.

The current row centres around accusations of child sex abuse made about Lord Bramall, a distinguished ex-soldier. Lord Bramall claims that the whole matter was bungled, took far longer than the merits of the case warranted, and was conducted without regard for the impact on the accused. Similar claims have been made about other investigations of child sex abuse, and not just by the Met (one by Wiltshire Police on former Prime Minister Edward Heath comes to mind). In response senior police officers seem unable to understand what they are being accused of, and reject the criticism as unfair, beyond the odd minor mistake. Sir Bernard Hogan-Howe, the Met’s Commissioner won’t apologise, because he thinks that doing so would suggest that no investigation should have been carried out. Which his critics have never suggested.

Sir Bernard did muse, however, that perhaps the police’s policy of automatically believing accusers in sex abuse cases might not be quite right. This attracted an attack from Vera Baird, the police and crime commissioner of Northumbria, a lawyer by profession. She suggested that any departure from a strict policy of believing all accusers would condemn thousands of victims.This entirely misses the point.

The trouble is that the sort of practices complained about by Lord Bramall are hardly restricted to the investigation of sex abuse claims on famous people. They are normal police practice. Plodding investigation (if you are lucky, that is; too often nothing is happening at all as cases never get to the top of the pile before the file is lost); vital clues ignored; complete disregard for the impact of their investigation on the people that are involved in it. In common language, a complete and utter lack of common sense – and instead blind adherence to policies and procedures that prevent context, efficiency and initiative from getting in the way. And this does not just apply to investigations; the police got into a real muddle over crowd management at the G8 summit in London in 2013. They applied “tactics” (a revealing word) that were often totally inappropriate in context, causing distress to thousands of ordinary law-abiding citizens.

But this is how many people like to run large organisations, and how, incidentally, lawyers often advise such organisations be run. The senior officers adopt sheaf-loads of policies and plans, and then tell their underlings to follow them. If something goes wrong, it either arises from a failure of an underling to follow a policy, or else the policy itself is at fault. And, of course, because the policy cannot cater for all circumstances, many failures are tolerated with a shrug, and, are not seen as failures but as just the way the world is. What is not allowed is for junior management to assess a situation, and decide the most appropriate course of action, given the organisation’s overall objectives, disregarding those sheafs of policy documents. Hence Ms Baird’s and Sir Bernard’s spat over police policy on how to treat sex abuse accusations. Neither can stand the thought of discretion and common sense entering police procedure; or rather, the idea that it might do is unthinkable. It is institutional blindness. and institutional stupidity.

Lord Bramall, as former Field Marshal, may well recognise the syndrome. One hundred years ago armies used to be run like this. The senior staff made plans; everybody else had to comply, regardless of context (even the political leaders, in the case of Germany’s Schlieffen Plan in 1914). It proved utterly disastrous as the First World War unfolded, and nowhere more so than in the order-loving German army. The shock was such that the Germans carried out a systematic rethink, so that by the Second World War they had managed to reconcile the need for local initiative and overall command. Evil though their cause was, the German army proved astonishingly effective in that war, except at its very top level of command. Right until the end they seemed to outfight their opponents man for man. Modern armies learnt from this, and local initiative is now a standard part of how the British Army works.

Alas the police have no such initiative-taking, intelligence-using, problem-solving culture, except perhaps in elite units. This seems to affect all British police forces; it just creates most damage in the Met, the country’s biggest, where senior management are most remote from the front line. A living demonstration of the problem can be seen in the recent disastrous merger of Scotland’s police forces, which was much applauded by policy wonks south of the border when it was first proposed.

It is perhaps one good reason why an outsider, from another country or another service, might be a good idea to lead the Met. But the problem is much deeper. Police middle management seem to be of dire quality, being so cossetted in a culture that favours following orders and procedure, and then sticking together under pressure. It will be a tough job making things better.

The truth about school choice is emerging. It doesn’t raise standards.

I read this article in last week’s Economist. The implications are quite extraordinary for anybody follows the political debate about school provision. One of the central ideas of the right, school choice, is in collapse.

The article concerns school voucher schemes in the USA. In a number of areas vouchers are distributed to poor families, so that they can use them to get places for their children in private schools. The article takes a case study from a large scheme adopted in Louisiana following Hurricane Katrina. One interesting feature for policy wonks was that the vouchers were distributed randomly, which is evidential gold dust. You can compare the children who got vouchers with those that didn’t on a level playing field, as it were.

Voucher schemes are popular with the right, ever since the economist Milton Friedman advocated them back in 1955. Fans included the Economist newspaper. They were also quite popular with the poor families themselves – though, if I remember correctly, researchers felt that was more to do with a sense of empowerment than any educational benefit.

But in this study the children with the vouchers did worse than those allocated to their local state school. even after controlling for other explanations. Meanwhile dramatic improvements have been made in that state system in Louisiana through the use of good old-fashioned state management.

School choice has been a favourite idea of the right, who prefer market-mimicking solutions to state control. This is very much part of a fashion that the left refers to as “neoliberalism”, on this occasion with some accuracy (they have a tendency to apply it to anti-state followers of Ayn Rand, who should be regarded as libertarians rather than liberals). Neoliberals think that state run systems are inefficient because of inadequate or dysfunctional incentives for those running them, while markets are more efficient processors of information. The fashion for school choice caught on in Britain under the last Labour government, promoted by Tony Blair in particular, and then turbocharged in the Conservative-led governments that followed. The British policy was to introduce state sponsored “academies”, free of local authority control, to mimic private schools. Alas it is difficult to see this as anything other than a colossal distraction.

As it happened the Labour government had managed to raise school standards spectacularly, especially in London, through good old-fashioned management before they started messing with academies. Using a system of school inspections (by Ofsted, a state agency) to develop a broader idea of quality than mere test results, the British state has created a system that has delivered substantial improvements. According to last weekend’s Guardian, private schools are worried by the climbing standards of state schools. To be fair some of that may be due to the propaganda buzz around academies. Certainly they do have something to be said for them as a way of diverting attention from private schools – including tapping into latent demand for state schools that local authorities struggle to recognise.

Right wing think tankers would do well do examine the remarkable success of many British state schools, and try to think about the reasons for their success. Voucher schemes can be quietly dropped.

The Troubled Families Programme shows the way forward for public services

I was interest to read about the British Government’s Troubled Families Programme (TFP) in last week’s Economist. Now I don’t find the Economist particularly reliable on British social policy – their coverage of education has shaken my faith in the paper, with its uncritical adoption of rightwing wonkery. So I thought I had better get an alternative view. That proved a bit more difficult than I imagined, since the programme attracts little public attention. I did come across one piece in the Guardian, though, from last November. This turned out not to have a great deal to say. Nevertheless, I think that the TFP is an exciting idea that is a potential model for future social policy – unlike so many of the government’s other ideas.

The TFP was set up by the Coalition government in 2011 in response to the riots that year, which set off one of our ruling elite’s bouts of moral panic about the lower orders. The programme targets the families that are creating the most problems for public services, initially 120,000, and appoints a key worker, who then works with the family to put them on the path to solving their problems. The key workers bring in other public services as required. The programme was extended to 400,000 families in 2014.

David Cameron, the Prime Minister, has lent his personal imprimatur to the programme, and claimed a virtually 100% success in “turning around” these families. This claim is examined by the Guardian, which unsurprisingly finds it wanting. Success is judged by rather unconvincing criteria, and includes families knocked off the list because they were found to not to be as “troubled” as first thought. Perhaps it is too early to judge the programme, as one of the Guardian’s contacts suggests, but that looks equally dubious. To me the programme is simply commonsense. No doubt there are many ways in which it can be improved, but we are better off seeing this as a glass half full than half empty – because its approach runs counter to so much of current government practice.

The problem with the normal approach to public services is that it compartmentalises them: social work, probation, police, mental health, housing, employment and so on. But the most persistent problems involve people that have multiple problems that feed off each other. Mental health, joblessness, housing, drug abuse, criminality is a common trail of destruction, for example. This leads to the classic paradox of public services (and many other dysfunctional organisations), where everybody is working hard and doing their job well, but the overall result is underperformance and failure – and constant demand for more “resources” as social policy types like to call taxpayer funding. Solving the complex problems that lie at the heart of so much demand for public services requires looking at the person at the heart of it and supplying leadership. This tackles two of the most difficult aspects at once – the lack of confidence or chaotic nature of the people involved, and the need to coordinate and access a multiplicity of services. That is what the TFP does. It intermediates the public services with a human professional who can adapt their actions to the circumstances – and provide personal coaching. That key worker may be the first person in public service that the troubled individuals have talked to who is interested in them as people, rather than through the narrow scope of their role.

This is interesting, because it takes public services in the opposite direction to most attempts to “reform” them, since Labour’s Tony Blair suggested that public services should learn from the private sector in the late 1990s. What followed were many attempts to make services more streamlined, and to intermediate them through dumbed down interfaces with low-skilled staff and workflow systems, which are quite unable to deal with human complexity. It turns out that the private sector gets by by avoiding the difficult cases and telling them to go somewhere else. It also doesn’t like actually soving people’s problems – it want them to keep coming back for more. There is still much that the public sector can learn from the private – but not nearly as much as Mr Blair and his Conservative emulators think. The public sector needs operating models of its own – and the key worker idea is one. There is another around building self-helping communities, but that’s a story for another day.

And, to be fair, criticism of the TFP is limited. A lot is directed against Mr Cameron’s rhetoric, which talks about addressing the “twisted moral code” of troubled families. In fact it turns out that most troubled families do not engage in crime. But this is about creating political cover for the idea to readers of the right wing press – a bit like covering community cohesion initiatives with the label “British Values”. Nonsense, perhaps, but politicians of the left should learn from it in order to broaden public support for their ideas.

Then there is the old leftist trope that such policies address the symptoms of trouble, and not the root causes, such as inequality, injustice and many other of the abstract nouns beloved of the left. But this line of criticism is simply designed to provide cover for mediocre public services. It underestimates what humans are capable of given the right motivation and support.

In our world of polarised politics, this sort of criticism from the left is as close to praise as a Tory government will get. In fact there are two more substantive criticisms. The first is the rather obvious one: the government is pulling in opposite directions. The TFP may be a good idea, but it needs access to decent public services to do its job, and these are being run down – especially local council social services and mental health facilities, both of which are critical in this context.

The second criticism is that TFP is subject to the government’s payment by results (PBR) policy, another signature idea from Mr Cameron. This means that the work is farmed out to non-government agencies, who are paid bonuses depending on their success rates. Using outside agencies is not necessarily a bad idea in itself, though anathema to the left. But PBR leads to two problems. First is that by subjecting the payments to risk, they will drive away many potential agencies, including smaller social enterprises, which are usually the most innovative. Instead they draw in a list of larger organisations, who tend to hollow out rather than add much value. They are able to do this because of the second problem, which is that defining success criteria leads to arbitrary targets that can be gamed. It is the same regime of false incentives as the discredited target culture, beloved of Mr Cameron’s predecessor, Labour’s Gordon Brown.

In my mind this is the wrong way round. Key workers should be at the heart of the publicly managed service that commissions services from elsewhere: public, private or third sector, depending on how they meet client needs. This “care management” model has been very successful in social work, for example – although few councils now use it, with the pressure on short term costs leading to them to replace qualified staff with cheaper personnel with narrower remits. (Disclosure: my wife is one of the few remaining care managers, in adult social work).

But credit where it is due. Mr Cameron has hit on an idea that has real mileage: a people-centred approach to public services. This idea must be built on.

Why I’m sceptical about the Citizen’s Income idea

There is growing interest in the idea of a Universal Basic Income (UBI), also called Citizen’s Income, to replace means-tested benefits. This was given a lift last week by the think tank RSA. The Lib Dems are also reported to be looking at it as part their review of welfare. The idea already has some totemic value on the left – it is part of the Green Party policy pitch. It is an interesting idea, but my scepticism is growing. But it has along pedigree: I first remember it being advocated by Paddy Ashdown in the 1990s.

Why the interest? Well the benefit system has become fiendishly complex, with entitlement hedged around by all kinds of rules. Applying for benefits is often demeaning, and the bureaucracy involved is arbitrary. Although the government is trying to reduce the complexity of benefits with the introduction of Universal Credit (UC), which is phased out as income rises, this brings its own nightmare. To work, it needs up to date information on what people are earning. The systems difficulties associated with this have led to repeated delays in its introduction. Some of these problems may in the end prove insoluble; the project has borne many of the hallmarks of over-ambitious failed technology projects, though the bad press has eased over the last year.

A UBI would replace these benefits, including the old age pension, child benefit, unemployment pay and the tax free allowance on income, with a single system of payments to everybody. This would doubtless have to be age-related. The RSA version suggests a low rate for children (payable to parents), and a high one for the elderly. Extra allowances would need to be made for those with certain types of disability. This cuts through the current complexity.

Of course the first big design issue is affordability. How high would taxes have be to pay for it? Consider the basic maths. If the allowance was set at the mean level of earned income (spreading the income from those that work across those that don’t) across the economy, then tax on income would have to be 100%. On top of that you would have to pay for the NHS, defence, schools, the police, and so on. If it was set at 50% of average income, tax would have to be 50% just to pay for it, and so on. So any design has to push the boundaries of how low can you get away with. But how low can the entitlement be and still be able to realistically provide a sole income for the unlucky? The RSA version can only get through this conundrum by sidestepping the rather central question of housing costs.

After you have navigated that rather central problem of scale, more problems await:

Incentives to work. If the income is going to be sufficient to sustain people through unemployment, might it not encourage a frugal lifestyle of people who never work (legally, anyway), reducing the tax base? This would be parasitic, and surely seen as such. Which then leads to the toxic politics of people who suspect that this is the case of their neighbours, minorities, and the like. The experience of places where something like the UBI currently works (Native American reservations with gambling or natural resources income, for example) is not particularly encouraging: too many people can lapse into a hopeless, dependent lifestyle.
Housing is a harder problem than just affordability, as it varies so much from place to place. But, to be fair, this is a problem with the current system too. A whole new approach is needed to housing policy, and that would need to work alongside this reform. This encompasses such issues as the availability of social housing, regulated the private rental sector, and the access to housing finance which seems to be too easy, so pushing up prices needlessly). This, for my money, is a more urgent problem.
Who is an isn’t entitled? At what point do people coming to live in the country become entitled? At want point do people choosing to move overseas lose entitlement? This is one area where being in the EU, with its multiplicity of benefits systems and no-discrimination rules, makes things harder.
Enforcement. There is an invitation to fraud here, as people will be tempted to create claims for fictitious people, or the deceased, etc.,and that points to the use of some kind of central registration. The RSA suggests linking to the electoral register. This sits uneasily with British traditions of keeping the state at arms length.
Taxes. There is a need to roll in personal tax free Income Tax and National Insurance allowances to make it pay. That means all income is taxable. This could involve quite a lot of extra administration as more people are brought into the scope of taxation.

There are no doubt many more design issues. The problem is not so much that these difficulties are insuperable, but that the idea is revolutionary. And revolutions usually fail, because it is impossible to foresee consequences. All the modelling is based on the idea that behaviours will not change very much – when they are bound to. If possible change should be in smaller, evolutionary steps.

But I have a deeper, philosophical problem. This all reeks of a Big Idea to be dropped from a great height on people by central government. Liberals are rather prone to this. They love the idea of universal righst and entitlements, because they think they are empowering. But the alternative view is that such grand, centrally designed systems are dehumanising and create dependency.

My view is that instead of such systems of legal rights and entitlements, we need to give the state a human face. That means that individuals in difficulty have access to intermediated services and support which tie together, physical health, mental health, social support, housing and so on. These would in packages that are designed to move people onto a sustainable path, and also conditional on to some extent on how the individual engages. Universal income is based on a heartless idea of “Take the money and you’re on your own.” Of course intermediated services might be considered illiberal, because they place considerable discretionary power in the hands of agents of the state. I think that can be managed through stronger local accountability. And I think that current British society has the civic strengths to pull it off. Though even here, I must beware of my own Big Idea to be dumped on an unknowing public.

But Citizen’s Income is supported by a lot people I respect. No doubt the idea is worth exploring further. But I will take a lot of convincing that this is the best way forward for welfare reform.

Have big organisations had their day? Alas not in the public sector

In a recent bog post David Boyle, whom I regard as a fellow campaigner for a new economic paradigm, describes the phenomenon of the “empty corporation”. He mentioned this after trying to deal with two large British companies: Barclays Bank and TalkTalk, the telecoms company. These companies offer their customers no human contact, and are unable to solve more than very simple problems without causing their customers a lot of work. And yet these businesses conform to our idea of high productivity, which is the holy grail of economic development. Examining how these companies work gives us clues about how economic development needs to change direction.

The key to this is the insight, offered in recent book by information scientist César Hidalgo, that the human brain can only handle so much complexity. And the human brain is at the apex of any system for managing complexity. Whatever power Artificial Intelligence (AI) and computing may have to transform life, they remain a long way from handling complex situations reliably. Groups of people can manage more complexity that individuals, but this is a process of diminishing returns; it ceases to be true of large groups. That is fundamentally why large organisations do not handle complexity well. So how do they succeed?

They do so by simplifying things. Manufacturers build standard products in large numbers. Service providers try to pull off a similar feat, by offering a standard service, handled by a relatively simple set of rules, with the minimum variation due to context. Further, they produce these products and services by fragmenting the more complex parts into simpler steps. By doing so they are able to develop “economies of scale”, first admiringly highlighted by the founder of modern economics, Adam Smith, in a pin factory. That makes them highly productive and competitive, within a tightly defined remit.

Anybody who has worked in a large organisation (as I have within in financial services) will recognise this drive to simplicity. Failures are usually attributed to excessive complexity. Every so often there is a reorganisation to re-simplify things. Hierarchies and bureaucracy is put in place with the aim of preventing complexity from growing – though this sometimes backfires by doing the opposite. Even so large organisations often become unstuck because vital processes are neglected (a recent example being TalkTalk’s inadequate defence against hacking) or parts of the organisation interpret their an over-narrow remit without comprehending the full context (VW’s problems with emissions standards being a case in point here). It seems impossible to get the balance between inadequate and excessive control.

And yet officialdom often favours large corporations. That is mainly because they have a similar problem with complexity. They find it much easier to handle a smaller number of large organisations. They are many examples, but one that sticks in my mind is the almost vindictive campaign by officialdom against smaller abattoirs after a scandal of lax standards. This still afflicts British agriculture; we may question whether it really has produced much in the way of safety benefits. But it has made the blame game easier to manage. There is a further, and sinister twist. Large corporations, especially in the USA, have discovered how easy it is to manipulate new regulations by lobbying officials and politicians. The payback on investment is apparently enormous.

The problems of excessive scale are even more apparent in the public sector than in the private one. A recent case described by Guardian journalist Deborah Orr is particularly poignant. She told of a woman falsely accused by a neighbour of antisocial behaviour. It was quite clear that this neighbour had mental health problems. Officialdom, in the shape of the housing association that managed the property and the police, where utterly unable to cope. They could not see beyond an isolated series of incidents, which each had to be dealt with according to a set process, regardless of human impacts. In the end her neighbour was evicted – but only because his rent was behind; at no point did anybody think of getting down to the root of the problem – the neighbour’s mental health problems, which are presumably being inflicted on somebody new. The theme of Ms Orr’s article is the lack of compassion in the modern world. To me it is simply the inability of large organisations, like the housing association and the police, to manage context and complexity. There is no place for compassion is such places. Compassion means allowing the impact of context, and that means losing control.

These problems are made worse by organisations attempting to be more “productive” by reducing levels of staff, and “de-skilling” – using less qualified, and cheaper, staff, working within tightly defined rules. Unfortunately this is one area where the wrong lessons from the private sector are being imposed on the public sector.

There is a sort of defining paradox about the problem. On the one hand we have workers working very hard, and very productively, and on the other we have the organisations they work for failing. This almost always arises because the sum of all the things that the workers are doing fails to add up to what they are collectively trying to do. There is even a name for the discipline of trying to resolve this type of problem: “process management” – which I personally have found an essential set of ideas as a manager. Unfortunately people charged with process management are usually given too narrow a remit to get to grips with the real problems their organisation faces. And all too often these problems are insoluble for large organisations – because solving them means depending too much on the exercise of judgement at a junior level (including the “compassion” of which Ms Orr speaks), the full consequences of which the wider organisation will be unable to handle.

Economists should ponder this paradox when they tut-tut about poor growth in productivity, as they are prone to do. Most still believe that productivity comes about with simplification and scale. But each of our lives is complex, from the billionaire to the welfare claimant. Offering us a bewildering menu of simple, standardised products and services is often not what we need, even if each of these services is very cheap, because it is produced to high standards of productivity. At least the billionaire can employ a small staff of professionals to try and make sense of it all. Alas the welfare claimant often needs interaction with just the sort of trained and empowered professional whose jobs are being de-skilled. Productivity, as it is usually understood, may be self-defeating. We need a new way of looking at it.

In the private sector the processes of technological advance and competition will eventually drive positive change. Big corporations will try to slow it down by creating monopolies, by making life difficult for their competitors, or by misusing such concepts as intellectual property rights. But the life expectancy of larger organisations is already shortening. A long last technology may be taking forward individual empowerment at the expense of centralisation. It is always dangerous to predict where technology will take us, but the smartphone, blockchain technology (pioneered by BitCoin), and additive manufacturing (3D-printing) are surely pointing towards a more distributed model of capitalism. Meanwhile the struggles of large companies to secure customer databases and fight disruption from cyber attack are pointing the same way too. With inevitable exceptions, the big commercial corporation may have had its day.

Alas there is no sign that policymakers understand that scale is a problem for public services, even though almost very day provides evidence that it is. Each failure is greeted with promises that some tweak in the system will sort the problem out. You would think that after so many years of such failed promises that people would start to twig. And yet, alas, no.

David Cameron: master of the middle ground

After diverting my readers with the fringe entertainment of the Labour Party, and the even more eccentric fringe of the Liberal Democrats, it’s time to look at the politics that really matters: Britain’s Conservative Party. They had their annual conference last week, and this gives us some idea of what to expect in the next five years.

The speed with which the Tories, led by David Cameron, have assumed the ascendency in British politics is astonishing. Not six months ago I, along with many others, thought that they would be unable to win the General Election in May, and that they were so toxic to the other parties that they would have difficulty in forming a new government. But they succeeded in securing a narrow but decisive victory. I had failed to understand how England’s centrist voters regarded the political scene, and how cleverly the Conservatives were able to exploit those voters’ anxieties.

And as if that result wasn’t good enough for the Tories, the subsequent left-wing takeover of the Labour Party has removed the principal opposition party from the field for the time being. The Labour leadership’s priority seems to be to consolidate the left’s power in the party, rather than take on the Tories. Meanwhile the Liberal Democrats have been crushed, and even Ukip, the Tory’s rivals to the right, look like a busted flush. Only the SNP look in fighting form, and they are confined to Scotland, which is of minimal electoral importance to the Tories. The next General Election is due in 2020, and at present nobody can see that it can produce anything other than another Tory victory, and quite possibly a landslide.

How the Conservatives take things from here is therefore the most important question in British politics. The first thing to note is that the position of its leader, David Cameron, looks secure. The vultures were circling for his expected failure in May, so his triumph is a very personal one. And he has earned his strong position. He has a powerful instinct for the middle ground in English politics (which extends to much of Wales too, though he seems to have little grasp of Scotland’s politics). What he understood in a way Labour politicians did not is that this middle ground, the floating voters who decide elections, had not moved to the left, as it was fashionable to suggest. These voters accept much of the economic conventional wisdom that the left dismisses as “neoliberal”. They do not want higher taxes; they think that the previous Labour government spent too much on benefits and public services; and above all they fear the loss of private sector jobs that might arise from a new economic crisis. These are concerns that Labour failed to address, because, as we now see, much of its core support disagreed. Middle ground voters in England became so afraid of the consequences of a Labour government (and especially one dependent on the SNP), that they happily ditched the Lib Dems, who were also trying to pitch for their votes.

But Mr Cameron understands other things about these middle ground voters, which make both Labour and Lib Dem politicians uncomfortable. They are suspicious of the European Union, but open to pragmatic arguments for staying in. They are nervous about immigration, especially (whisper it) of those from Islamic countries. But they also don’t want to be racist. Mr Cameron treads this ground with skill.

What the conference made clear was Mr Cameron’s strategy for his party, shared by his chief ally, the Chancellor George Osborne. He plans to set up a fortress in the centre ground, much as the Labour leader Tony Blair did for his party, to secure its hegemony over British politics. He will continue to push through his largely neoliberal economic policy, and in particular a dramatic rolling back of tax credits. They hope to reduce the overall cost of the state to a historically low level, by making further cuts – though trying to preserve the beloved National Health Service. Within this overall framework Mr Cameron and Mr Osborne want to tackle three important issues: the European Union; the economic weakness of northern England; and the country’s overheated housing market.

On the EU, Mr Cameron aims to “renegotiate” Britain’s terms, and then present the country with an in-out referendum. This is a bold enterprise, not least because his party cares deeply about it, and mainly disagrees with him. It could profoundly change the party he leads; it could even destroy it. Losing the referendum (i.e. taking the country out of the EU) would cause his whole project to unravel.

On the north, the duo’s approach is to devolve and invest. This will be very interesting to observe – their approach is surely sounder than previous attempts to address the issue. They hope that it will revive the party’s fortunes in the north, much as Mr Blair revived Labour’s in the south (ground that Labour has now lost).

On housing Mr Cameron seems to be surrendering to the conventional economic wisdom – that is a simple game of numbers, and that setting targets for new homes, and taking a firm hand on planning delays, will help ease the crisis and make home ownership more widely available. Social housing plays no role in their thinking; neither is there a recognition of the pernicious role of cheap finance. Few feel that their strategy has sound foundations. Housing looks like something of a Tory blind spot – they draw too much support from owners of homes who enjoy the sky-high prices. They may yet surprise us though.

The biggest problem with Mr Cameron’s plan to establish Tory hegemony is his wish to step down as party leader and Prime Minister before the close of the parliament. None of his possible successors has his touch. Mr Osborne is a better strategist, but the public will find it harder to trust him. Theresa May, the Home Secretary, is playing to the party’s right, endangering her centre-ground credentials as she does so. Boris Johnson, the London Mayor, has flair but lacks depth. A messy transfer of power could easily upset the project.

Two other hazards await, just to deal with the known unknowns. The first is Scotland. The SNP’s dominance remains unchallenged. Mr Cameron has not played his cards well here, with a particularly foolish bid for “English votes for English Laws” made too hastily of last year’s independence referendum. He does not like to fiddle with the British constitution, and yet some kind of federal settlement, involving much such fiddling, looks to be the only way to seize the initiative. If the SNP were to secure a second referendum and win it, it would be catastrophic for the Tories – who set much prestige on the union, even though it actually makes life harder for them politcally. Just fighting them off could be a massive distraction.

The second hazard is the economy. All looks well for now, and yet the growing problems in “emerging” economies threaten the developed world’s financial system. This could cause a new financial blow-up just as the US sub-prime market did in 2007 and 2008. That could dent the government’s reputation for economic competence, which is core to its appeal.

But such is the weakness of Britain’s opposition parties, that it is hard to believe that even these troubles could stop the Tories. But things can change quickly in politics.

And this demonstrates a political truth that all should ponder. Political success requires both a strong core vote and an appeal to middle ground voters. It is a hard conjuring trick. Labour failed to, or were unable to, understand and appeal to the middle ground. The Lib Dems failed to develop and retain a core vote. Mr Cameron has pulled off this trick for the Tories. He successor may fail. And that would make British politics very turbulent indeed.

4 liberal themes on economics and public services: my contribution to Lib Dem Agenda 2020

Agenda 2020 is the consultation exercise being carried out by the Liberal Democrats to set the framework of policy in the period up to 2020, when we next expect parliamentary elections. At this stage the idea is to keep the thinking at quite a high level. This is always quite hard for political activists. We somehow got onto VAT on tampons in the consultation exercise in Bournemouth. Then again, I’m always saying that political types on the left are too abstract. I haven’t submitted the following contribution yet, but the idea is to be strong on general direction, with only a few pointers on the detail. I’m afraid that it’s still a bit longer than my normal posts.

Economics, public services and wider Liberal Democrat policy

Economics and public services should be at the heart of any political narrative. Too often in the Liberal Democrats both topics have been neglected. The party has opted for a simple middle ground between the Conservatives and Labour. The 2015 General Election was no exception, at least as far as the headlines went. The time has come for a much more robust narrative. Here are some ideas on what this might look like.

The story so far

After 1945 the great Liberal thinkers Maynard Keynes and William Beveridge founded a post war consensus on economic management and public services. This was based on the state taking responsibility for managing the business cycle through fiscal policy, and a greatly expanded set of state services, funded by much higher taxes (compared to pre-war levels), to fulfil a series of new entitlements, designed to ensure that everybody obtained a basic level of wellbeing. These ideas were taken on by the Labour and Conservative Parties, and developed into an overbearing state, which also took over a series of failing businesses, from railways, to steel, to even aero engines.

By the 1970s the state had lost control of its finances and the country was heading for towards economic collapse. Public services had been captured by vested interests, with very little regard for their users. In reaction to this emerged a new conventional wisdom, initiated by Margaret Thatcher and expanded by Tony Blair. This new thinking was again based on liberal principles, and it is often referred to as “neoliberalism”. The idea was that citizens should be empowered as buyers in a market economy, with the state stepping back to provide only basic services and a basic safety net. Much of the regulation of the business cycle would be taken up by monetary policy, so as to reduce the role of the state. Marginal rates of tax on income were cut, though overall levels of tax increased, if anything.

Probably not coincidentally, this change to public policy was accompanied by dramatic shifts in technology and global trade. Society changed substantially, mostly for the better. Living standards advanced, life expectancy improved, and pollution was cut. But now the country, in common with the rest of the developed world, seems stuck. Most economic growth just benefits a rich elite; businesses hoard excess earnings rather than invest or pay their workers more; property prices escalate. The number of badly paid jobs rises; most younger people are shut out of decent jobs and decent homes. Demand for health and care services grows, while public resources do not keep pace. And prosperity is restricted to a small number better-off areas, especially in the south east of England.

Liberals should worry. Power is being concentrated among a wealthy elite of people connected to big businesses. This trend Is abetted by a highly centralised national government that would rather deal with these large businesses, or else large public agencies like the NHS, than directly with the public. The power of the markets works for many people, but it is failing many more. Many people have inadequate leverage in the markets for jobs and homes in particular, leaving an unequal power balance in both domains. This state of affairs breeds fear and insecurity, which in turn leads to the rise of the political extremes of right and left, which threaten social cohesion.

In the meantime thinking on economic policy has not caught up with these profound changes. Most economists still think of the economy in a highly centralised way, in terms of aggregates across the whole economy, rather than the fate of its component parts. And thinking about productivity is stuck with ideas appropriate to manufacturing industry and economies of scale – and not to the efficient use of the human resources the country actually has to hand, in an economy increasingly dominated by personal services. The left rails against a series of pantomime villains, but resists any serious progressive reform of public services. This old thinking simply concentrates more power and wealth into the hands of a well-connected elite. Public services are dominated by functional silos based on political empires, not people’s actual needs.

We need fresh thinking, and my suggestion is to organise this around four liberal themes.

Liberal theme 1: green growth

Green growth means the advancement of human wellbeing while reducing the consumption of physical resources, especially non-renewable energy. The twin objectives are to ensure that everybody has the chance to live a healthy and fulfilling life in a comfortable environment, while easing the stress on the local and global environment. There are two aspects to this: developing and implementing technologies that are more environmentally efficient, and breaking the idea that ever increasing consumption is the path to improved wellbeing. This requires a profound change in outlook – though one that is already taking place.

Green growth may or may not entail economic growth as currently measured. That depends on how advanced wellbeing is reflected in the monetary economy. In the short to medium term it entails a substantial level of investment, in more efficient homes, power infrastructure and transport infrastructure, as well as research and development. If properly carried out these investments will entail improved economic growth. Longer term growth requires the harnessing of human resources more effectively. This means a wider distribution of information management and decision making, or:

Liberal theme 2: small is beautiful

Large organisations, be they businesses or government agencies, are one of the main threats to green growth and liberal values. They concentrate power in the hands of the elites that control them, leaving the majority of their employees disempowered, and unable to react most effectively to the world as they find it. The elites are geographically concentrated, leading to geographic concentrations of power and wealth, and the hollowing out of communities elsewhere. This hollowing out leads to a waste of human resources, which must be tapped if green growth is to take root. Furthermore, large commercial organisations have a tendency to hoard surplus earnings (often abroad) rather than invest them, acting as a further drag on the economy.

Of course large organisations also play a vital role in any efficient economy; they are the best organisational form to take on some functions. But these are not as many as often supposed. A liberal government must change the legal and regulatory environment so that it favours large organisations less. This will include reforms to political structures, banking and taxes.

It will also entail a substantial reform of public services:

Liberal theme 3: public services that solve problems

It should be obvious that the main reason that public services are inefficient is that they do not work together to solve people’s problems. Housing, mental health, addiction, crime and poor physical health are very often bound together in one person’s feeding on each other – and yet we persist in trying to deal with each of these issues separately, in separate chains of command all the way to Cabinet. Often the key is making all the relevant services work together in such a way that the user moves to a better way of life, with less call on the public purse. Usually what happens is that the relevant agencies work against each other.

Public services should be organised to meet the needs of people, and solve problems rather than playing pass the parcel. This should be the foremost area for the development of policy, based on best existing practice. There may be a number of possible approaches. Some of things are clear, however:

Changes will be easier to implement if responsibility for public services is more localised and more integrated.
Some form of empowered professional intermediary will usually be required to assess the users’s needs, to coordinate the different agencies and, where needed, to negotiate the compliance of the user. Empowerment will mean some form of budgetary control. This means a step back from the current tendency to disempower and de-skill such intermediaries, like social workers and probation officers.
Large scale functional outsourcing will usually take services in the wrong direction. Repeated tendering also leads to a dumbing down, a tendency to gloss over more complex issues. The greater use of local social enterprises may well be a better approach in a framework that ensures proper accountability.

Public services should help with some of the most difficult problems relating to poverty; but this has to be in a wider context wealth and income distriubtion. We also need:

Liberal theme 4: redistribution to correct imbalances

A well-ordered, liberal society might not require the redistribution of income and wealth. And liberals dislike redistribution for its own sake – different levels of wealth may simply reflect freely made choices over how to balance accumulating money with other things life has to offer. But in our society imbalances of wealth and income pose a threat. The less well-off are denied the opportunities that should be theirs. Excessive wealth can be used to buy political influence and monopoly power, reducing choices for others. The accumulation of wealth may also lead to excess savings and economic stagnation. Liberals must embrace redistribution, albeit warily.

Redistribution needs to work at two distinct levels: personal and geographical. The wealthy must be taxed on both income and assets (land, in particular), and the worse off must be compensated through access to benefits and rights to state services, especially housing. Children must be a particular focus of redistribution as early years are critical to life chances.

Also funds must be redistributed from wealthy regions and districts to those less well off, to offset the negative network effects of clusters of wealth.

At both levels redistribution arrangements must be designed so as not to create dependency. Those less well-off should be encouraged to improve their lot – but at the same time the level of redistribution must fall as the need for it falls. Systems of redistribution based on universal rights (like the state pension) have their place, but have limits too. Truly liberal systems of redistribution will require careful design.

A policy programme to match

At this stage the idea is to sketch out broad political priorities, and not detailed policy programmes. I do not believe that in most cases a radical departure is needed from adopted Liberal Democrat policy. The high level emphasis will need to be rethought, however.

The main policy implications of taking forward the four liberal themes are:

Political reform, and especially the devolution of power to regions and districts. This is essential to create the right political environment. This may be combined with a new federal settlement for the UK and reform of the House of Lords. Electoral reform is important to ensure a plurality of power – but the priority must be to implement proportional voting systems at local level rather than at Westminster. A further important strand of political reform should be restricting the influence of wealthy individuals and organisations, especially through political donations.
A programme of green investments must be instituted, including high quality social housing.
With public service reform the emphasis should be on bottom-up initiatives – but national funding structures will have to be reviewed to facilitate this.
The tax and benefits system will need to be re-examined. The Lib Dem commitment to increasing personal allowances must be rethought, as it is inefficient as a redistribution policy. Restoring tax credits is a higher priority. Taxation of land in some shape or form makes sense, though we may get no further than reforming Council Tax.
On overall fiscal policy it is best to manage down expectations of additional government spending – though the principle that the government (including local governments) can borrow to invest must be clear.
The banking system must be reformed to allow new, locally-based lenders to come into play. Investment in the “real economy” should be encouraged to create new assets, While avoiding a merry-go-round of existing assets.
The UK should act internationally through the EU to curb tax avoidance, especially by large corporations. Trade agreements and relations with the EU should be viewed through the prism of promoting smaller businesses, and not simply advancing the interests of large multinationals.

Of course there are many more important policies that have a bearing on the economy and public services – not least reducing the level of carbon emissions. But overall such a policy platform should be quite distinctive from the orthodoxies of right and left, and yet fully in tune with modern times.

Election issues: the NHS. None of the parties are credible on funding. Labour would create more chaos.

After the economy the biggest issue in Britain’s General Election is the NHS. This comes top, or near to the top, of most voters’ lists of concerns. Labour want to make the most of these worries, while the Conservatives want to muddy the waters.

Two things seem to worry voters in particular. The first is pressure on Accident & Emergency services, which is knocking on to other parts of the system. This gives a general sense of the system failing. The second is the effect of NHS reorganisations of local services. This is often associated with outsourcing. Whether the public is as incensed about this “privatisation” as people on the left think is an interesting question – but they are suspicious of any threat to familiar local services.

That the NHS is under stress should be no surprise. As the proportion of older people in the population rises, so does the workload – but not the tax base from which it is funded. Furthermore many new treatments tend to be expensive; technological change does not improve productivity – but simply increases demand as new treatments are found.

There is political consensus around the free-at-the-point of use principle of the NHS. This has both flaws and strengths, but the NHS does quite well in international comparisons, though more for value for money than keeping people alive. Given this there are two important issues for the politicians to tackle. The first is organisational architecture, and the second is funding. They are related, of course, since the efficiency with which the service uses its funding depends on the architecture of the service. But it helps to keep the two separate for now.

First let’s consider this organisational architecture. The NHS has evolved since a chaotic mix of institutions was nationalised in the 1940s. Two ideas have always competed: a Soviet-style command and control model, with clear accountability to the politician at the top of the system; or a demand led organisation where users create demand and the service is forced to follow it. The Left tends to focus on the first, which is slow to react to change, and beset by tribal organisational silos. The Right prefers the latter, which suffers from a lack of reliable information about the true level of demand, and creates organisational instability.

What we have is a compromise between the two approaches. The service is divided between commissioners, who identify what services are needed and make choices as what to prioritise with the available money. And providers, such as hospitals, who actually deliver services based on the identified demand, a small proprtion of which is outsourced to the private sector. In addition there are other organisations charged with making it all work, including regulators of various sorts. This includes NICE, which rules on what treatments provide acceptable value for money. This basic architecture was established by the last Labour government, and remains largely unchallenged by the parties – though it is disliked by many health professionals.

But the details of Labour’s system were flawed. It was designed by management consultants in less stringent times. At its heart was an over-engineered monster called World Class Commissioning, with commissioning being spread out amongst a large number of Primary Care Trusts – which were bureaucratic, with little clinical input and token local accountability. The Coalition rightly attacked this structure, and set about redesigning it – with commissioning now being given to a combination of national specialist bodies and local commissioning groups, run by general practitioners. This succeeded both in bringing in more clinical input and improved local accountability. But it was a massive and distracting exercise (in spite of a Tory promise of “no top-down reorganisations”, enshrined in the coalition agreement). This was a serious mistake which has left much muddle in its wake. It was perfectly possible to achieve much the same ends on an evolutionary basis – piloting different approaches in different regions. The reorganisation has created a huge amount of bad blood, and not a little paranoia amongst health professionals. It has been accompanied by a steady process of outsourcing elements of the service, though no private or third sector organisation will take on the major hospitals that are at the system’s heart.

Alongside this reorganisation has been steadily increasing demand, which has run ahead of funding. The combination has resulted in huge organisational stress. The way in which the service started to cope with the extra demand, and the need for greater efficiency, was classic top-down and Labour-inspired. It was called the “Nicholson challenge” after the then Chief Executive of England’s NHS. Funds were ratcheted down gradually each year on all parts of the system, with a bullying “just-do-it” approach. This did not unlock enough of the creative thinking and deeper re-engineering that the service required. Much of the result was mindless cutting and hoping for the best. Under a new Chief Executive (with reduced job scope), Simon Stevens, a more intelligent approach is being adopted – but the wreckage remains.

Given this history, surely the best idea is to work on the current structure on an evolutionary basis. This is what the coalition parties propose to do. The main work-in-progress is something called “integration”. This means getting social care, run by local authorities, to run jointly with the NHS. Awkwardly, this cuts across many of the bureaucratic structures currently in place, especially when it comes to parcelling up the money. It is far from straightforward, and it makes sense to proceed by means of locally run pilot schemes. It runs alongside greater devolution of responsibilities, as exemplified by the recent deal regarding Greater Manchester. The wider the scope of a service, the more localised the organisation has to be in order to prevent unmanageable complexity and stasis.

The main challenge for Conservatives is their approach to outsourcing. There is nothing wrong with outsourcing elements of the NHS. It can bring in fresh ideas and fresh management. It can be used to bring in new ownership structures, like cooperatives and social enterprises, to replace the hierarchical empires that the current NHS fosters. But the way it has worked out is dysfunctional. The tendering process can be so complicated that only behemoth suppliers need apply. These behemoths can afford slick tenders put together by professional marketers and priced at whatever level it takes to win. Once they win they are free to break their promises and a general period of mindless hollowing out follows. Sometimes this is what is needed; usually not. Many Conservatives just don’t get this.

The challenge to Labour is a bigger one. They want to respond to the anger over the last reorganisation and reverse parts of it. Does this imply another chaotic reorganisation? Will it kill the good elements of reforms along with the bad? Do they think integration should be enforced top-down from the centre? Or will they follow the path of devolving political responsibilities? Does their idea of in-house NHS services being given preference mean less value for money and slower innovation? Will their idea of capping the profits of the outsources prove to be yet more bureaucracy that favours the heartless behemoths rather than the innovative social enterprises? Will Labour revert to the top-down, bullying style of management of old? And will they need SNP votes to get their reforms to the English system through? More uncertainty and chaos beckons.

The Lib Dems have a rather interesting take on NHS policy. They want to prioritise mental health services. As I have written elsewhere, I think this approach is inspired, and one of the better reasons for voting for the party. They stand for intelligent continuity.

And so we come to funding. Britons do not spend a particularly high level of money on health services (much less proportionately than the Americans), and there is no economic reason why the country shouldn’t spend a lot more than it does. There is no evidence that the overall level of demand is excessive because the service is free; people really want the services, and would pay a lot for it them if they had to. The problem is the opposite: funding is constrained by the need to pay for the service through taxes, where it competes with a whole lot of other things, like schools and policemen. And the government isn’t raising anything like enough tax to pay for it all.

Last year Mr Stevens produced a plan which showed that the service will need an extra £8bn per annum in five years’ time, even after a lot of efficiency savings. Will the political parties follow his plan? The problem is that its affordability depends on how well the economy and the tax base does – which is unknowable. The gaps between the parties come down to the different ways in which they are handling these forecasting uncertainties. The Conservatives are the most optimistic, Labour the least, and the Lib Dems somewhere in between. None of them are committing to sufficient tax rises if a growing economy does not deliver the extra tax revenue. Both Labour and the Lib Dems are offering some tax gimmicks to help close the gap, but none are offering the increases to Income Tax, VAT or National Insurance that will be required if the economists get their growth projections wrong (yet again). Labours plans are obscured by their issues of NHS organisation; they will not sign up to Mr Stevens’s plan for that reason.

If the NHS is starved of funds more people will go private, social solidarity will fade and a death spiral will be put in motion. Something very like this has happened to NHS dentistry. If we want to keep the NHS in its current format, with few charges, then this means extra tax, and not just the somebody-else-is-paying sort. It really is quite simple. It is very disappointing that our politicians (and Ukip, the Greens and the SNP are as bad as the others, or worse) will not face up to this. I find it impossible to choose between the parties based on their funding proposals.

Which leaves organisation as being the decisive issue. The coalition managed one step forward and one back. Labour’s attitude to organisation threatens another step or two backwards. The Conservatives are suspect on outsourcing and the most suspect on funding. The Lib Dems offer intelligent continuity, but, sadly, even in coalition they are unlikely to be given enough scope to put their way forward into practice.

No health without mental health. The genius of Nick Clegg and the Lib Dems.

What is the point of Britain’s Liberal Democrats? Most Lib Dems would point to the party’s liberal values. And yet these are shared by members of other parties. The same can be said for the party’s attachment to the political centre. Others will talk of community politics – but it is plain that many modern Lib Dems, including its leader Nick Clegg, aren’t really interested in this political strategy beyond a few local campaigns. Many outside the party would simply suggest that there is no point to the Lib Dems. The party is destined to be just a footnote in British politics.

But attending the party’s Spring conference in Liverpool in the run up to May’s General Election, the penny at last dropped. The party is the grit in the oyster of British politics, from which great pearls are produced. It is a serious political party that aspires to govern, not just to protest and complain. It stops Britain’s two main parties, the Conservatives and Labour, from having that ground entirely to themselves. And so it can introduce new ideas to a debate that would otherwise be contrived and stale, confined to a few carefully selected issues, based on focus groups and private polling.

What has given me this insight? It is the party’s campaign on mental health. It is pure genius from a party that looked beaten and irrelevant. The party is demanding “parity of esteem” between mental and physical health, and is in the process of securing serious extra resources for mental health support. It is trying to persuade politicians and the public to talk about the issue more. It is an idea whose time has come.

Consider three things. First is that mental health has an important bearing on just about every aspect of public policy – starting with the NHS, but quickly moving on to crime, employment, social services and onwards – and even defence when we consider the state of veterans returning from active service. And yet almost nowhere is it being adequately addressed. It sums up the dysfunctional element of public service provision better than any other single problem. The failure to handle mental health properly causes untold misery and a huge waste of public resources.

Second: it touches people personally. Most of us will know of people who have had serious mental health problems – depression, anxiety, eating disorders, and so on. And increasingly we are aware that we ourselves are vulnerable, given the stresses of modern life. And people are readier and readier to talk about it.

And third: it’s hard. The reason why dealing with mental health is done so badly is because there are few quick fixes. it goes to the very heart of the centralised and functionalised way in which we organise our state (and much else), our tendency to standardise and dehumanise in the name of efficiency, and our reluctance to consider broader philosophical questions about how we manage ourselves. If politicians and the public now want to take the issue seriously, it is just the beginning of a long, long journey. And yet it is one that could transform the state and the way we live our lives. As an idea, it has huge potential.

This is not a particularly new idea for the Lib Dems. Mr Clegg claims to have brought the matter to Prime Ministers’ Questions very early in his leadership – to the bafflement of mainstream politicians. The policy initiative No Health Without Mental Health, which kicked matters off, came very early in the Coalition government, with Mr Clegg’s imprimatur clearly on it. But it is only recently that it has shot to serious prominence, promoted by the Lib Dem Care Minister, Norman Lamb. Mr Clegg has made it central to the party’s overall policy presentation, giving it a mjor place in his last two conference speeches.

The interesting thing about this is that there is nothing uniquely Lib Dem in the insight that mental health is central to public policy. The first prominent person to promote the idea was Richard Layard, the Labour peer and a close adviser to to Tony Blair. His efforts saw the promotion of talking therapies, like Cognitive Behavioural Therapy (CBT). Lord Layard’s journey is an interesting one. It started with the idea that the promotion of happiness and wellbeing should be the primary aim of public policy, in place of monetary income – he is an economist. Now promotion of mental health is his big idea. This is a journey that I too have followed. But Labour were unwilling to take on the wider policy implications. It is all very well rolling out yet another highly centralised initiative on CBT, but rethinking mental health education and provision from top to bottom would challenge too many vested interests. It wasn’t an issue that the public were bringing up in the polls and focus groups, after all.

For the Conservatives, David Cameron took the first steps on the journey, by taking on the idea of wellbeing as a direct policy goal, But he hasn’t followed the idea through. But, it must of course be recognised, he and his Tory colleagues could see enough merit in the idea to allow the Lib Dems to run with it in coalition. That is part of its genius. Its implications may be radical, but everybody can agree that something needs to be done.

Nick Clegg deserves enormous credit for promoting mental health. While the right obsesses about Europe, sovereignty and human rights, and the left with the demon of neoliberalism and the failures of capitalism, the Lib Dems have found an issue that is concrete, and yet whose implications are profound. It moves us on from the stale old debates.This is disruptive political innovation at its best – something that a mainstream third party is well-placed to do.

Whether or not it helps improve the party’s fortunes in a difficult General Election, it has given the party a meaningful mission in British politics. A political pearl indeed.