Public Services – Page 5 – thinking liberal

The Coalition wrong-foots Labour on its (lack of) NHS policy

Labour’s plan for winning the General Election in May has a special place for the NHS. They are seeking to “weaponise” it, and promote themselves as the only party that can be trusted to run this great British institution. And yet their NHS policy has deep flaws. Now the Conservative/Liberal Democrat coalition government has come up with a plan to integrate health and social care budgets in Greater Manchester. To maintain the warlike metaphor, this looks like surgical strike on Labour. In fact the story arose from a leak in the negotiation process, and seems to be the brainchild of Simon Stevens, the politically neutral head of NHS England. But the policy poses serious questions for Labour.

The details of yesterday’s news are a little vague. The Coalition had already announced plans to devolve more powers to Greater Manchester, working through the local councils (mainly Labour, but with Conservative and Lib Dem ones too) and an elected Mayor. And integration is everybody’s favourite reform idea for the NHS. It refers to merging the health budget with that of social care (currently controlled by local authorities), so that the policies for the two can be coordinated properly. This is important because one of the main problems at NHS hospitals is that they cannot release patients to social care beds. Integration of this sort is already being piloted in such places as Torbay. This looks like a pilot on a grander scale.

As a reform idea, the Manchester proposal looks entirely sensible. Sarah Wollaston, a Conservative MP who is a doctor, and no government stooge, offered a knowledgeable and effective advocacy on Radio 4 yesterday lunchtime. Integration has been one of Labour’s big ideas. But Labour can’t bear to give the government any credit for policy on the NHS – as this undermines their weaponisation plan. So their spokesman, Andy Burham, rubbished the idea. He attacked it as undermining the “National” in the NHS, because it was a localised solution rather than being dropped from a great height from Westminster. He also suggested it would be another “top-down reform”, which the government had promised not to do.

And yet both these lines of attack expose weaknesses in Labour’s own NHS policy. In the first place, if they are serious about promoting NHS integration, how on earth are they planning to do it? The quid-pro-quo of an integration plan is surely more local devolution – otherwise you simply create a monstrous bureaucracy, and a feeding frenzy of large consultancy firms proposing over-engineered implementation plans (er, like the last Labour government’s reform of NHS commissioning). And secondly, are Labour or are they not planning a top-down reform all of their own? Their proposal to scrap the government’s Health and Social Care Act suggests just that. And if they intend to implement integration across the whole country at once… well, that just proves it, doesn’t it?

Which highlights the real problem for Labour. Their plan is to ride the tide of anger amongst NHS insiders over the government’s record on the NHS. They headline attempts to outsource some services as an NHS “sell-off” or privatisation. This is vastly exaggerated – no major hospitals are being outsourced (private businesses would be mad to take them on) and GP surgeries, er, have always been private businesses (a fact that confused the hell out of a save-the NHS campaigner that called on me a couple of months ago). But any plan to reform the NHS in any serious way involves taking on these insiders. The idea of integration to insiders is popular probably because it is seen as a way of hitting the ball into the long grass: the setting up of some toothless committees of professionals who purr about “collaboration not competition” and achieve very little except requests for yet more money. The more serious and specific Labour gets about reforms that promote efficiency, the more dissent they will get from their core supporters, and especially the trade unions. The hard fact is that Labourare proposing to dismantle the Coalition’s health reforms at the moment they are starting to show some promising results, like this devolution initiative.

Now the public probably don’t think much of the Coalition’s record on the NHS, but they surely accept that reforms will be needed to make the organisation more efficient. And if Labour appear not to be serious about that, then their line on the NHS is undermined, and their line on tax-and-spend, already weak, gets shot through. With enough pressure this weakness will become more and more apparent – and there will be a greater and greater risk of dissent in Labour ranks. They are offering just bluster. Far from trying to avoid the NHS as a campaigning issue, the coalition parties have the opportunity of a devastating counterattack, especially if Labour persists in opposing the Greater Manchester plan.

All of which shows how fatally bad is Ed Miliband’s leadership. He has valued party unity over making serious political choices. He has chosen sound and fury over policy substance. He hoped to craft clever policy positions that cover the cracks in his own party while providing credible ideas for saving the country. Alas serious policies mean taking on vested interests in your own ranks, not just the usual villains. The unity of silence in Labour ranks is not a token of assent – it is a token of denial. Labour’s most vocal supporters, and the providers of the bulk of their funding, do not think that Labour is serious about public sector reform and austerity. As Labour is pressured by the coalition parties the greater it is in danger of falling apart just when unity is most important. It is a political strategy put together by policy wonks and campaign tacticians – and not those with serious nous about taking on political responsibility.

The Coalition parties have their own weaknesses of course. These may yet save Labour. But a meltdown for Labour cannot be ruled out on this form.

We need to talk about the NHS but our political culture prevents it.

Many Britons complain that political correctness stops important issues being talked about. By that they usually mean immigration and cultural integration. Now we talk about these things all the time, and we are coming to understand why that culture of political correctness was a good idea. Pointless, nasty behaviour to immigrants and people from ethnic minorities is on the rise, while yet more rubble is strewn in the path of necessary economic development. But there are issues that are important but where there is a conspiracy of silence. Foremost amongst these is Britain’s National Health Service (NHS). This is not a good idea.

Well it isn’t that politicians don’t talk about the NHS. It has become a central theme of Labour’s election campaign, and the Green party, in their bid to harvest left-leaning voters, have jumped in too. But these campaigns challenge the very idea that the NHS should be reformed. Any suggestion that elements of the NHS should be run by private businesses, or that a local facility should be closed, is attacked virulently. The idea behind these campaigns is that the NHS is under attack, is being “sold off”, and needs to saved by a government that will let our heroic doctors, nurses and ambulancemen get on with their jobs unmolested by rapacious hedge fund managers and bankers. The government’s response to these challenges is distinctly muted – they try to deny that much is changing at all, and point out that they are recruiting more these wonderful doctors and nurses and keeping the money flowing.

But senior NHS professionals are worried. Today it is the turn of Professor Sir Bruce Keogh, NHS England’s medical director, to speak out. He warns that without major changes to the way care is carried out the service will collapse. That means that many existing facilities will have to be cut in order to make room for more cost-effective ways of treating illness which do not involve big hospitals. You don’t have accept Sir Bruce’s prescription to understand the nature of the threat.

The first problem is demographics. The proportion of elderly people in Britain is on the rise. This is increasing the number of patients, and presenting the service with more complex cases that it is difficult to deal with adequately. It is also undermining the tax base from which the NHS is funded and the pool of workers that the NHS needs to recruit. The next problem is a change to the economics. More advanced and effective treatments cost more money. Rates of pay, especially for skilled staff, are getting higher.

These problems are well understood, even if politicians and public alike would rather talk about their implications another day. There is a third problem too. And that is management. Dealing with health issues is a very complex matter, and it is becoming clearer that the way we try to go about it isn’t really helping. Our default method is to break the task down into a series of specialisms and give each a separate autonomous organisation. Primary care is split from acute hospitals which are separate from social care, with mental health handled by yet another set of organisations. But all these things interrelate, and good patient care depends on getting the coordination right. For example the current NHS crisis in hospitals is presented as overflow in Accident & Emergency, but it has its roots in the inability to move older patients into more appropriate social care settings when the acute phase of their illness is over.

I am very familiar with this type of management problem, albeit in much simpler contexts. It was the focus in the 1990s of a management revolution that went under the name of Business Process Reengineering. The key insight here is that one of the main obstacles is the shape of the organisation itself. Pouring more resources into it won’t help, or not help by much. If you fix a problem in one area, it simply pops up in another. That means that the shape and structure of health care has to change in order to cope with the extra pressures being thrown at it. That in turn means politically sensitive closures and, almost certainly moves that can be described as sell-offs. It is worth pointing out, though, that simply outsourcing an element of the service without restructuring the way care is delivered is just as fallacious as pouring extra funds into existing structures. This is a point that some on the right, and in government, have not grasped.

I think this is reasonably clear; there may even be consensus about it amongst those that try to look beyond the short-term politics. But the fog then starts to descend. The problem is highly complicated, and the costs to failure very high. The way forward is not obvious. Both this government and the preceding Labour one grappled with it. Both got some things right; both have made mistakes. But it is a debate amongst a small elite of policy wonks and senior professionals, when broader engagement, to prepare the political ground, is what is required.

Is the basic model of the NHS under threat? This is an open-ended commitment by the taxpayer to fund health care for all citizens. This has some obvious problems – there is no clear way to limit demand. Health care, it turns out, is not like the drains, where once you have fixed the basics, people forget they are there. That was what some people thought when the NHS was set up. People don’t like getting ill, so, said the optimists, that would limit demand. Alas longer life and reduced pain are consumer propositions to die for; potential demand seems endless.

This is the key to a further insight which few seem to have grasped. People often talk of high levels of health care spending being unaffordable. This is untrue. People prize healthcare above many other things, and are happy to give up these other things for less pain and a longer life. You only have to look at the enormous sums spent in the USA on health care to understand that. The problem is how, exactly, do you get the money from people’s pockets and into that of health service providers. The critical question for the future of the NHS is how much more can be raised through taxation.

Which is another area that we should all be thinking about. Could we raise a lot more through taxes if the process was more transparent and people had more confidence in it? Or should the NHS start charging for more things? Should we develop a model of “basic cover” vs “luxury cover”, and bill for the latter? And what could the latter include (anti-cancer drugs that might prolong life but aren’t deemed cost effective?). And that leads to another series of questions we would rather not ask, about the meaning of life and death.

And there’s a further problem. How much do we focus resources on where the demand is currently, or and how much to where we think the areas of greatest need are. The last government talked often of rectifying “health inequalities”, and started a process of shifting resources to poorer areas with worse health outcomes. That put facilities in areas with high current demand, but less actual poverty, under pressure. Most of the NHS’s big disasters, like the failure of Mid-Staffordshire Trust, occurred in areas that had high demand, especially from elderly residents, but which were not classed as being in poverty.

If we don’t fix the NHS, a parallel private health system will build up beside it and undermine it. Something like this has already happened with dentistry. We have little chance of a serious, mature political discussion this side of a General Election. But the sooner that the public demands their politicians address such issues the better. Rejecting the facile slogans of Labour and the Greens would be a good start.

Good and bad news about the Lib Dems NHS funding pledge

Today the Liberal Democrats announced and eye catching policy to improve NHS funding by £8bn a year by 2020 (in England). This matches the figure asked for by NHS England chief Simon Stevens – so it isn’t plucked from thin air.

How is this to be paid for? First £2bn extra is already planned and accepted by the other parties (Labour want to add another £0.5bn). A further £1bn comes from more taxes on the wealthy. The rest will be gradually added as the economy grows. The Lib Dems say that public expenditure should keep pace with national income.

There are good and bad things about this new policy. First the good thing. The £8bn funding figure is entirely credible, given the direction of demographics. Mr Stevens is no lefty. He knows that the NHS can be more efficient and has plans to make it so. But that only gets you so far. Any party that promises to keep the NHS within its current scope and free has to address this gap. This moves, or should move, the debate on the NHS out of the area of gimmicks and into serious choices.

Except that it doesn’t. They’ve made the whole thing look to easy. Tax some other people a bit more and the rest comes from growth. If it’s that easy the other parties can do it too. This is not different in substance to what Labour are offering. It is more of a challenge to the Tories who want to use the proceeds of growth to fund tax cuts.

And growth cannot be guaranteed. There are severe economic headwinds, from demographics, from changes to technology, from changes to world trade – to name but three. To say nothing of the legacy of piles of household and state debt.

To be distinctive, the Lib Dems needed to make it look harder. Which in practice means raising taxes – income tax, national insurance or VAT. Remember Paddy Ashdown’s promise of 1p income tax for education? This would have made the promise more credible, and got a real debate going. It would then be Labour who would be forced to mutter promises about future growth, which the public are likely to discount.

Instead this looks like another politician’s promise that is less than it seems. What a pity.

One school’s journey 3 of 3 – 5 lessons for public services

Telferscot School, the primary school where I am Chair of Governors has been passed as Outstanding by Ofsted. In my previous two articles I have looked at how the school has achieved this, and the role of school governors. In this article I want to look at what lessons I have learned about how public services should be run. It shows that the grandstanding by commentators of both left and right is missing the point.

Lesson1: the public service ethic can work. Many on the right assume that no nationalised public service can work – that its workers are driven by instincts of self-preservation and personal advancement, and that the primary purpose soon gets lost. Many would like public schooling to be run on a voucher system, with the schools themselves being private businesses. And if not that, they want the state system to be contrived to be as close to that ideal as possible, with independently run schools competing for children. Telferscot is an ordinary state-run school, managed by the local authority. Its senior management are state employees on ordinary state-determined salaries with no special financial incentives for good performance. And yet it is as tightly managed as anything in the private sector, and clearly focused on its wider social goals. The driving motivation of managers and staff is to do public good. Without this motivation they would be tempted to cheat the system, and avoid the hard cases, so that the statistics look good while public services role is undermined. The professionalism that this implies is truly impressive.

Lesson 2: there must be a big bad wolf in the system. Trade unions try paint an opposite idea to the right-wing one. They want a public service run by publicly-spirited employees in a climate of collaboration for the public good. This idea might bring a tear to the eye, but I have seen no evidence that the public service ethic by itself is enough to drive improvement. The process of running any organisation well requires disruption and tension. There is always a big bad wolf that makes you do things that you don’t like doing, or confront difficult problems you want to put off to another day. In private business that big bad wolf is the need to stay profitable in a competitive environment. What is it in English schools? Above all it is the Ofsted inspection system, coupled with public performance measurement. Ofsted inspections are arbitrary and often superficial. The teaching unions hate them. But the consequences of a poor inspection can be dire for the careers of senior managers – while good ones provide them with a public accolade. It works.

Lesson 3: combine local management with national standards. Most public services are vast bureaucracies, bound by publicly discussed policies and procedures. Schools do not escape this pattern. Polices on teachers’ pay, for example, are negotiated nationally, and run to 115 pages, updated each year. But schools are run with a higher degree of local, discretionary management than almost any other branch of public services. Managers manage, rather than follow policies and procedures. Such discretion often ends badly in public services – but it works in schools because there is high public accountability. There is constant contact with the “customers” – the pupils and their parents. Ofsted inspections are a public process. Key performance data are publicly disclosed. But I think there needs to be something else: national standards. In schools this comprises the National Curriculum and basic assessment methods for results at key stages in a pupil’s career. These standards focus on outcomes – what schools are meant to achieve, rather than how. They can be overdone – an overly prescriptive curriculum, or testing that is too frequent. But without them it is easy to lose comparability, and accountability is lost. The current coalition government’s record on this is mixed. The last government tended to be over-prescriptive, adding in fashionable items according to the political priorities of the day – and the current government has done a decent job of paring this back. But some of its ideas on school curriculum are a bit “retro”, apparently based on the ideals of the past, rather than looking it what is needed now (look at history, for example). But the real problem is that they are giving the Academy schools too much freedom, which carries the risk of them going in tangential directions with a conflicting agenda. Problems with some faith schools have reached public attention, but it could betoken a bigger problem. The government has also thrown chaos into primary school assessment techniques, by taking away state sponsorship of progress measurement standards.

Lesson 4: inclusion is for everybody. There is a tendency amongst those who think about public services to focus on the neediest cases. This is understandable – they are the most challenging, and yet often it is where the system is least effective. And if money is tight, the temptation is to reduce resources available to everybody else. But there is a problem. Services that focus exclusively on the needy cease to be truly public; they promote a separate “underclass” who use public services, against the majority that do not. The less needy, those whinging middle classes, must be carried along too. Telferscot achieves a lot of what it does through a good social mix. That means that the middle class children must do well, and their parents must like the school. They are happy to go along with the social inclusion agenda provided that they think that the system works for them too. One of the few places where our Head Teacher agrees with Michael Gove, the Conservative former Education Secretary, is that state schools should emulate private ones. They can’t do the small class sizes, but they can do an interesting and diverse curriculum. This is something both left and right are in danger of missing. The left tend to despise the middle classes and their needs (notwithstanding that most leftists are middle class themselves); the right want to economise by concentrating resources on the neediest. But social cohesion means that society must look after everybody’s interests, not just the neediest.

Lesson 5. Consider the whole person. The bane of public services is that they focus on diseases rather than patients, to use a medical analogy. In schools left-wing teachers used to shrug at poor results for deprived pupils. “Not our problem” they would say. Instead it was housing, jobs or something else outside their job-description. But the most exciting thing in schools over the last decade, especially in London, is the way that this attitude has been broken down. In order to improve their results, schools have been muscling into areas that are way outside a narrow view of their remit. They reach out to families who are experiencing difficulties. They take a leadership role in helping to resolve family problems, bringing in other services as required. As a result they are helping to solve problems rather than passing them on to other agencies. Families are not allowed to lower their expectations; they learn how to help themselves and be less dependent.

To me these lessons are an endorsement of a liberal public services agenda. But most political debate seems to be on irrelevancies – like the government’s programme of extending Academies. The thinking on both left and right is stale. The right underestimates the need for public services to support social cohesion, and the commitment of taxpayer money needed to do this. The left would rather play the blame game than find constructive solutions to social problems. Both seem stuck in imagined past golden age. There is another way.

One school’s journey 2 of 3 – what should governors do? Examine effectiveness not policies

Earlier this week I posted about the school where I am Chair of Governors, Telferscot Primary School in Balham. We are celebrating our recent acquisition of Outstanding status from Ofsted. That achievement mainly reflects on the school leadership, and in particular the Head Teacher, Jenny Martin. But what of the school’s governors? I suspect hat quite a few of my readers are, or have been school governors. Our journey may be of particular interest.

What is a school’s Governing Body supposed to do? Unfortunately you will not much practical help from officialdom, local or national, well-intentioned though they might be. For them the Governing Body conforms to a bureaucrat’s dream: responsibility without power. They see the Governing Body as the corporate embodiment of the school itself. They even address Council Tax bills to it. All the power rests with the Governing Body, which then delegates it based on a many-paged document, mainly to school management.

And yet governors do not feel that they are in such a position of power. They find themselves constrained by conventions and regulations that leave them with almost no practical responsibility. The Governors can’t pay those Council Tax bills; they can politely forward them to the school Bursar for due consideration. The Governing Body is not a day to day presence at a school, and deals with decisions referred to it, rather than being some kind of controlling presence. Many involved in education, especially teaching unions, just regard them as interfering amateurs that could easily be dispensed with altogether.

The bureaucrats (and legal advisers, come to that) try to reconcile the gap between responsibility and power through the idea of management by policy, and its cousin, procedure. They think of a well-run school having bulging files of policies and procedures that tell its management and staff what to do in any situation. These policies and procedures can be reviewed at regular intervals by governors, and they can politely suggest changes here and there, and therefore assert themselves to a degree, and be saddled with responsibility if anything goes wrong. But anybody that has run an effective organisation knows that management by policy is not a very good way of doing things. At best it is a waste of effort, as policies are ignored; at worst it leads to an over-cautious, defensive style of management that undervalues the role of leadership. Policies have their place in the best run organisations, but the more there are of them, the less value they have. Managers and staff should take decisions based on context and with a strong measure of common sense, things that are almost impossible to justice to in a detailed policy.

So what should a Governing Body do? This starts with the one area where they have undoubted power: the appointment of the Head Teacher. I was a governor when Telferscot appointed Ms Martin in 2001, but not on the recruitment panel – so I can’t claim any credit for that decision. But my colleagues’ approach was interesting. They did not pick the safest, best-qualified candidate. They picked a candidate that had little experience of headship, and showed every sign of causing trouble (as one of the members of the panel told me). They were inspired by Ms Martin’s vision, and felt that the school could do with a shake-up. It was an inspired decision, and a case of governors making a real difference. It also shows that governors must embrace risk.

But once your Head is in place, then what? The relationship between the Head and governors goes to the absolute heart of the governors’ role. In a good relationship the governors provide a first level of accountability for the Head, and a sounding-board and support. This requires some imagination on both sides. The Head needs to appreciate that opening up to governors, bad news as well as good, is the only way to build a strong, supportive relationship. Ms Martin grasped this very early, and has welcomed governors into aspects of the school that other Heads would frown on. This includes having governors on staff recruitment panels, for example. It also means pushing the boundaries of confidentiality, especially with senior governors.

But governors have to earn this sort of confidence. That, of course, means being absolutely safe with confidential details. It also means being constructive and helpful – and not getting into oppositional role-plays for form’s sake. Good humour is essential. Governors and Head (and, indeed, other senior school managers) should enjoy being together and talking about the school. Headship can be a lonely job, and the educational bureaucracy is not usually very interested in what individual schools are up to, so long as they stay of trouble. A good governing body can provide an appreciative audience. Through this openness and interaction, governors build up a picture of what is happening at the school and of its strengths and weaknesses. So when it comes to the big things, they are ready.

This softer side is at the heart of effective governance. But it needs to work within a disciplined framework. Public bodies like schools are subject to external scrutiny. Scrutinisers need to see evidence. That means getting basic frameworks of documentation right and up to date, decisions properly documented, and for it to be clear that the governing body is informed about all relevant aspects of the school. It also means documenting challenge – something our inspectors like to see. When meetings are good-humoured and when management is open about weaknesses, then challenge can be a little difficult to document – even though the process itself is challenging. But that is a matter of learning how to frame minutes.

But the governing body does need direction and focus. Here we have been following advice from the Department of Education (DfE) to get away from some of the details that governors have in the past been interested in – when I first became governor we talked endlessly about school swimming. Instead we need to get to basics of pupil progress and quality of teaching. This means looking at and discussing data, and getting away from mountains of policy approvals.

It has been a learning curve. But this is what Ofsted reported:

Governors have a thorough understanding of the work of the school, of pupils’ performance and of the school’s finances. They bring a range of expertise, knowledge and commitment which they have shared to good effect. Since the time of the last inspection they have used these to build on the school’s strengths and success. They seek and undertake training to make sure they are clear about their roles, standards and keeping children safe. The governing body plays a rigorous role in managing the performance of their headteacher and receive information about the performance of teachers and how they are rewarded and helped to improve. This is demonstrated through the improvements in pupils’

This gives us the confidence to move forward. We are in the process of reconstituting the governing body and changing its formal lines of operation. We will continue our move away from policy documents to understanding what the school is doing and how effective it is. We plan to reduce the number of committees and structure governor visits differently. We do not have a vision of a small, tightly run executive board, as DfE advice suggests, but of a larger body of interested people who collectively can examine many areas of the school’s activities, and provide school management with support as well as scrutiny. By and large these interested people will be parents. And meanwhile I am in the process of an orderly transfer of the role of Chair to putative successor (I’m in my eighth year – the recommended maximum).

As the school completes its move to two form entry, and takes on a second site, the future promises to be interesting. It has been a privilege to be involved in the school’s success.

One school’s journey 1of 3 – characteristics of one outstanding school

Over a month ago now I, and four other governors at Telferscot Primary School in Balham, were interviewed by the Ofsted inspector. As Chair I managed to show a good grip of our performance statistics and the general overview. But all the governors contributed knowledgeable answers . The highlight was when the inspector asked us about the curriculum – the parent governors burst into an enthusiastic description of what the school was doing – showing not just enthusiasm, but knowledge and understanding .

It was an impressive performance. And so went the rest of the inspection. Children, parents, teachers and staff, and above all the Head and management team, each delivered an impressive display. Ofsted’s report rated the school at its top grade, Outstanding, in all categories: leadership and management; behaviour and safety of pupils; quality of teaching; achievement of pupils; and early years provision. The school had always been a good one, but at last we had caught up with the ever-rising bar to be considered Outstanding. This was thoroughly deserved. The school’s journey was very much an individual one – but it still throws light on wider issues of public policy.

Back to the beginning. Ofsted, for the benefit of my non-English readers, is England’s chief regulator and inspector of schools. Its rating system has become the benchmark by which schools, especially state schools, are judged. School managers and staff live in dread of its inspections. Telferscot is a state primary school, covering ages 4-11 (Reception to Year 6), and a pre-school nursery. It is in transition from being single form entry (with a standard class size of 30) to two form, which now goes up to Year 3. A further two forms of entry, and a second school site, are in prospect. This makes it a relatively small school (currently) by London standards, though still above the average for the country as a whole. Its children are from mixed social and ethnic backgrounds, with a solid core of middle class families, but plenty of families in more challenging circumstances. It is a bit of an “average school” in its mix of pupils, and a sort of microcosm of the challenges facing the country’s school system as a whole – which ironically makes it rather unusual – most schools are more homogenous. I have been a governor since 1999, and Chair of Governors since 2007; the previous inspections by Ofsted that I experienced were in 2001 and 2009.

The school’s operations are based on three key areas: a broad curriculum; inclusion; and hard management. These three things are driven by the Head Teacher, Jenny Martin, who took over in 2001 – but the first two, at least, had foundations that go back before that. I would like to say a little about each of these three.

The idea of a broad curriculum contrasts with the alternative of a curriculum that focuses on the basics of literacy and numeracy. The tension between these ideas shapes much of the debate on education, which, of course, does not stop lots of people trying to advocate both sides at once. The idea of a broad curriculum in turn rests on two ideas. First is that a broad curriculum is required to prepare children for later life; children need much more than basic literacy and numeracy – they need to know how to be socially responsible individuals , how to work with other people and to enjoy the process of learning itself. The second is that a broad curriculum provides the best context in which the “basics” can be taught. It provides the opportunity to make such learning both more memorable and enjoyable. Children shouldn’t just know how to read; they should enjoy reading and be eager use their literacy to expand their horizons. At Telferscot the broad curriculum is focused on the idea of the “Creative Curriculum” – one that incorporates the arts. This means working with a number of arts groups, including London’s South Bank.

Inclusion means drawing in children from all backgrounds and working to ensure that they all share the same experience of school and know how to be together. One aspect is the multi-ethnic, multi-national and multi-cultural side of the school, which celebrates its diversity. This is wonderful – but pretty routine for London. Much more challenging is bringing along those from difficult social backgrounds, where the children tend to lack support at home, and those with special learning needs or disabilities. The school has, in my memory, made no permanent exclusion of a pupil, and only one temporary one. Inclusion is about knowing, and working with, the wider family, and about arranging for additional educational resources for those with additional needs. It also involves keeping the school open and active outside school hours, from 8am to 6pm. This aspect of the school’s work is one its most challenging, but clearly motivates school leaders – and it is inspiring.

Broad curriculum and inclusion are lovely, liberal ideas that lots of people will agree are a good thing. But making them happen and delivering excellent results across the whole school is another matter. This requires what I have called hard management. There are no easy rides; all people who work at the school feel accountable and pushed to achieve more. The primary instigator of this is, of course, the Head Teacher, Ms Martin (or rather, Miss Martin, as she is known at the school). The Head has to be both hard on everybody (not least herself), and to provide help and support -as well as fostering a spirit of teamwork and good humour that means that people enjoy working together. There are two important things I want to add about this aspect of running the school.

The first is that the school’s success really took off after it adopted a top-heavy approach to school management, with at first three and then four senior staff completely out of the classroom (not counting the non-teaching side), save for providing temporary cover for class teachers when absent. This gives the school’s management to strength and depth to deal with all the extra things the school must do to sustain a broad curriculum, inclusion and deep accountability. It need hardly be added that these managers need to operate as a real team, so that the Head can feel completely confident of the Deputy holding the fort, and so that each member of the team can feel they are making a real contribution to the school’s progress. Head teachers need to be strong personalities; not all find the transition to being team leaders easy.

The second thing is the use of data. The data here means test results and teacher assessments which show the progress each pupil is making in the core curriculum subjects of reading, writing and mathematics. This starts with publicised results for the “Key Stages” at the end of Years 2 and 6, including the Year 6 SATS tests. But while a lot of public attention is focused on these, school managers need something much more frequent to identify potential problems before it is too late to do something about them. Ofsted increasingly uses such data to understand progress, and the school management almost obsesses with it.

Many liberal minded observers of education worry about this emphasis on data. They worry that it undermines the idea of a broad curriculum and the real needs of children, and that it sucks the living soul out of education. But such criticism neglects two things. The first is that such a focus on data really is the only way of making sure that no child gets left behind, and true inclusion. In a class of 30 it is quite easy for teachers to focus on averages and miss the needs of a small number of quiet but underperforming children. Britain has a bad record on this – of leaving a neglected “tail”. The second thing is that one of the outputs of a broad curriculum should be achievement in the basics. It really does hold the whole process to account. If the data shows weaknesses in literacy or numeracy, then this really isn’t something to be glossed over. Telferscot’s emphasis on creative curriculum has a bias towards literacy, which is easy to integrate with the arts, rather than numeracy. The focus on data exposed this vulnerability and the the development of its maths teaching has been one of the main areas of focus for the school’s management, something that has heavily influenced recruitment, for example.

I could go on. I want to write two more articles. The next will cover the field of school governance – which is the bit where I personally can be said to have made a small contribution to the school’s success, and claim a slither of actual professional expertise. And finally I want to draw out some wider issues for the development of public services.

Polly Toynbee is right – we need more honest debate on tax and spend

I don’t approve of Polly Toynbee. She’s so deep in the Guardian bunker that she rarely has anything useful to say. She writes polemic that will entertain the left, but not persuade anybody else . So I wasn’t expecting much from her article last week Economic dishonesty is the deadliest deficit of all. I was expecting her to repeat the Labour myth that the economic crisis was somebody else’s fault, and that austerity policies have strangled the British economy. But she was making a point of value. It was that the Conservatives and Labour have very different views of the future government finance – but they were both concealing their differences. The Conservatives do not want to spell out the implications on services and benefits; Labour do not want to look irresponsible, or to be painted as the party of high taxes.

She wrote her article before the Autumn Statement delivered by the Tory Chancellor of the Exchequer, George Osborne. Ms Toynbee should be pleasantly surprised at how things turned out, though I doubt that she is. The British government’s future policies on taxation and public expenditure have taken centre stage, and important differences have emerged between the political parties.

It started with some rather excitable coverage on the BBC Radio Today programme, which pointed out that Tory party plans for future spending would take it back to being the lowest proportion of national income since the 1930s. The bare statistics were factual (inasmuch as future projections can be described as factual) – but a comparison with the 1930s is farcical. National income is incomparably bigger than then – so a similar ratio of spending to income will not produce destitution that is in any way comparable. For similar reasons, the economic crash of 2008-09 is no way comparable to that of the 1930s, in spite of some of the ratios to national income being similar. Mr Osborne rather publicly objected to the coverage, drawing attention to the whole issue. Up to that point Ms Toynbee’s forecast seemed to be coming true.

In turns out that though Labour and the Conservatives are aiming at the same date to eliminate the structural deficit in British spending (i.e. cyclically adjusted spending less taxes), beyond that the difference between Labour’s spending plans and the Conservatives’ is as high as £27bn per annum. Differences on this scale are significant.

The next act in this drama was an attack by Mr Osborne on his Liberal Democrat coalition partners that they had lost the plot on economic policy because their plans were closer to Labour’s than the Conservatives. Danny Alexander, the Lib Dem Treasury minister, made a robust response about the impossibility of Conservative spending plans. Ms Toynbee, in typical Guardian bunker style, had painted the Lib Dems as indistinguishable from the Tories, so she would have been less than pleased about this – but not too upset since she no doubt thinks that the Lib Dems are a political irrelevance these days.

It is to be hoped that these spats are the beginning of a serious political debate. Up until now we have experienced manufactured political rows over the immigration, the European Union and the NHS. Admittedly the Tory preparedness to take big risks with Britain’s membership of the EU is a serious political issue – but the row is more about tactics and competence than strategy. On the other issues the politicians have very little of practical value to say. But the gap between left and right on state spending (I refuse to call it “economic policy” as most commentators do) foreshadows very different visions for how the British state should work.

The right has an economically liberal view of the state, with both state services and benefits being pared back, leaving more space for private enterprise and consumer choice. The left does not seem to have such a clear vision – much of its energy is being devoted to keeping public services and benefits as they are and avoiding serious questions about the future. That is a pity, because shifts in both demographics and the distribution of economic power point to a larger role for the state.

The problem with the debate, though, is that none of the political parties is being clear about what they want to do. It is good that we are talking about broad numbers on the size of the state – but this needs to be brought down to specifics. The Conservatives need to be clearer about what they plan to cut, and how they want to reshape benefits. Labour and the Liberal Democrats need to do this too – because their plans also involve big cuts. But they also need to talk about taxes. The Tories are quite right that the only tax raising idea that they will talk about, the Mansion Tax, is small beer.

Britain, along with most of the developed world, needs to rethink tax, state benefits and public services. I do not believe that they can be shrunk in the way the right suggests. But neither are they sustainable in their current form, as the left seems to think. That, not immigration, exactly who delivers health services, or even membership of the EU, is one of the critical issues of our time.

The more politicians debate these issues, the better. But if they obfuscate, then Polly Toynbee’s angry rhetoric will for once be justified.

The Economist’s disgraceful prejudice on education policy

Some 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.

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.

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.
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.
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.

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?