The Centralisation of Localism

The Tory-led government (yes, I am using Ed’s new phrase from now on) is all about localism. Localism is very much its thing, we are repeatedly told. But does the reality live up to the rhetoric? It won’t surprise you if you have followed politics for the past few months to discover that it doesn’t. And more worrying, where localism is being given a genuine chance, it’s as a cover for “chaos” in the delivery of public services.

First, let’s look at two flagship policies which are being touted as a move to a more local way of doing things. Education is an obvious example. Michael Gove wants local parents, charity or business groups to set up schools in their local area to offer schooling appropriate to the local children. These free schools are being driven by local demand, not managed from Westminster, we are told. They will have the freedom to teach what they like and employ who they like. Except. Except the decision on whether a school gets the go-ahead is entirely down to Gove himself. He is also solely and personally responsible for ordaining academy status on existing schools and can even force schools to become academies, regardless of whether they want to or not.

And while he talks about freeing the curriculum, he has decided which subjects actually count. So a school which wants to offer music, RE, sport or other subjects which fall outside of his arbitrary “English Baccalaureate” won’t be recognised in league tables. This is centrally applied pressure on what gets taught in schools and a million miles away from the localism agenda.

In education, the bodies which were responsible for ensuring local areas get proper school provision, the Local Education Authorities, are effectively being scrapped and decision-making is moving to Westminster. It’s clear that Mr Gove, while talking the talk on localism, is actively sprinting in the opposite direction when it come to genuinely localising services.

The same is true of enterprise and development. In England, the government is scrapping the Regional Development Agencies (RDAs), which were responsible for investing and supporting economic development in the English regions. They are being replaced by Local Enterprise Partnerships (LEPs), which are supposed to be more local, more accountable and more effective because they are focused on smaller areas and run through existing local authorities. Except. Except the funding for the LEPs, which, let’s face it, is the important bit, isn’t local at all. The Regional Growth Fund (RGF) is a centrally-managed pot of cash which is doled out on the say so of ministers. In fact, it’s worth quoting directly from the BIS web site here as to who makes the decisions:

“Final decisions regarding support and prioritisation will be taken by a ministerial group chaired by the Deputy Prime Minister including the Chief Secretary to the Treasury and the Secretaries of State for: Business Innovation and Skills; Communities and Local Government; Transport; and Environment Food and Rural Affairs. The ministerial group will be assisted by an independent advisory panel chaired by Lord Heseltine that will make recommendations on which proposals best address the objectives of the RGF.”

So, do local people decide on which projects get the investment? Is it planned on a regional basis, as was the case with the RDAs? No. Nick Clegg and his cronies decide who gets the money. This is becoming entirely typical. A project supposedly designed to improve local economies is driven from the centre and turns out not to be local in any meaningful sense whatsoever. As in all these things, the wise approach is to follow the money. And you’ll usually find the money is in Westminster.

Where the government is happy to let local bodies take control is in areas where the cuts fall hardest. A cynic might suggest that as Eric Pickles announces more “localism” and the provision of services through local authorities on the one hand, he is dishing out a poisoned chalice of 25% budget cuts with the other. So, who gets the blame for failing services? Why, the local providers of course. After all, they are in charge now!

This is the essence of the “Big Society”. An abdication of government responsibility for services people rely on. There was a truly staggering piece on the “Office of the Big Society” on Radio Four’s PM programme on 12 January (listen from 22 mins). In it, Francis Maude made it clear not only that the government doesn’t know what’s happening on the ground in terms of service provision, but that it doesn’t want to know. In fact, it doesn’t care. It sees the obligation of government not to ensure everyone has local services they can rely on, but that they stand as far back as possible and see what happens. There is an admission that provision will be chaotic and patchy. They don’t care, because once the responsibility has gone from central government, they don’t think they can be judged on the outcomes.

So this is what localism means to the Tory-led government. Either it’s nothing more than shallow rhetoric, with powers being dragged back to Westminster, or, where it suits, it’s abandoning local communities to their own devices, to struggle on with vastly reduced budgets. Whichever way you look at it, it leaves people less in control of their own lives and the government’s claims to be empowering local communities looking very hollow indeed.

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The Long-Term Threat from “Govern Now, Think Later” Politics

For a party that’s had thirteen years to plan its next government (or nearer eighty, in the case of the Lib Dems), this Tory-led administration is incredibly short-sighted. It has rushed headlong into a mass of reorganisations and restructurings which look very badly planned and certainly lacking in democratic mandate. Take the School Sports Partnership, a way of allowing schools to co-operate in providing competitive and social sporting activities for their pupils. Scrap it, said Michael Gove, let Heads decide how to run sports. A stream of Tories lined up to praise this new approach – “free the schools!”, they cried in unison. However, people who actually understand school sports made it clear that without properly funded local organisation, school sport was under threat as Heads were forced to prioritise their spending at a time of limited resources. Which to scrap – the sports and games, of those extra computers or even a new teacher? It’s fairly obvious where the axe would fall.

So Gove relents and performs a u-turn which is indicative of this government’s short-sightedness. Hours of discussion about a new approach to school sports and then a hurried about-face. What a waste of time, effort and resources. A little more thought, a bit more planning and this could have been avoided. It’s vital that Labour portray this u-turn for what it is – poor government, hasty management and wasteful ineptitude.

If it was only school sports which suffered from this “govern first, think later” approach, we perhaps could excuse the coalition. They’re new, after all. However, across the board, the Tory government is rushing through decisions without proper consultation and often against the wishes of those impacted most.

In the NHS, a hugely costly reorganisation has the support of only a minority of GPs, who are now being handed £80bn of commissioning budget. The change will cost around £3bn at a time of falling revenue for the Health Service (ignore the “ring-fenced budget” claims – experts say the NHS needs 3% increases p.a. to simply stand still. It’s getting 0.1%). So why do it? The only groups clamouring for an overall like this are the private health companies who are lining up to provide the commissioning services GPs won’t be able to. Report after report has warned of the risks of the dramatic overhaul in the NHS, particularly when money is tight. But Cameron and Andrew Lansley don’t care. They’ve made a decision and evidence be damned. The difference between this and School Sports Partnerships is that while some kids might get fat with the one change, people might die under the other.

Of course the government don’t want people to die, but the stampede to be the most radical minister in an unelected government is leading to rash decisions which will unquestionably have serious effects on people’s lives. There is a lack of evidence that this is at the forefront of any minister’s mind as he or she lines up the next dramatic shake-up of public services.

Finally we come to the big one. The economy. It’s stalling as the effects of Labour’s stimulus packages wear off. Unemployment is rising and the private sector is failing miserably to fill the gap left by public sector lay-offs, precisely as most serious commentators expected. The only jobs being created are part-time, which provide no security to people and often mean families rely on benefits to achieve a living income. Everything is focused on the deficit. The price of Osborne and Cameron’s blinkered obsession with cutting the public sector to somehow restore economic balance is record-breaking youth and women’s unemployment and, perversely, negligible economic growth.

The short-termism is frightening. Even if the Tories manage to eliminate the deficit in an entirely arbitrary four-year period, what will the consequences of their approach be? We will have a generation of young people trapped in unemployment. A lack of stable communities as people are forced to move around hunting for work. Increasing resentment from those who lose out towards those who seem impervious to the deficit-cutting measures. In short, a much worse country to live in.

For anyone searching for an alternative, look to the post-war period. Despite a deficit and debt which puts the current one in the shade, various post-war administrations managed to invest in huge housing and infrastructure projects and of course, the NHS. Boldness brought great rewards. It’s time for further boldness now. Government should be looking to the horizon and to our future, rather than the present. Of course we must increase efficiency wherever possible and provide the absolute best value for money in our public services, but relentless cuts will hollow out the foundations on which they rely. Once lost, local services will never be recovered.

We should be investing in a genuine green investment bank, with the power to raise funds and independently invest in new technology. Instead we have a fund of £1bn, considered entirely useless by all serious commentators. This country has a proud tradition of pioneering innovation, but short-sightedness from the Treasury is standing in the way of a potentially lucrative new industrial sector. If we don’t seize the initiative, others countries will. We need an active and engaged industrial policy which supports industry, encourages businesses to build links with communities through specialist skills and secure employment and sooner rather than later, the Treasury coffers will feel the benefit.

As for our young people, much better to invest in genuine work placements (such as offered by the now-scrapped Future Jobs Fund) than simply hand out benefits then kick people for not finding jobs which don’t exist. When recovery final does come, how does the country benefit from underskilled and unemployed people, out of touch with work? Pay for jobs and training now and reap the benefits in the future.

The thinking required is joined up. Connect each stage of people’s lives to the next. Attacking Sure Start and removing the element of universality will remove the community cohesion these centres currently provide. I have seen first hand how bringing families from across the community together improves the local area as people recognise they have more in common than they imagined. Turn our schools into a market place of special interest groups and the “sharp-elbowed middle class” and watch as these divisions widen further. I would scrap charitable status for private schools, ease the administrative burden on Heads and work towards a truly comprehensive system where every student has a fair chance, not just those in a position to exploit their time and influence.

Support the Educational Maintenance Allowance which keeps pupils in education and allows them the best chance to achieve. Fund universities properly – we will never be the factory of the world, but we could be its R&D department – in culture, academia and humanities as well as engineering and science. Offer proper alternatives to university too. We should support apprenticeships and training schemes which provide paid employment to young people embarking on a career.

And finally, recognise the importance of a life outside work. Community stability, confidence in the next pay packet, a feeling that work and community are not always separate can rebuild society where too often, poorly paid and part-time jobs for multinational companies leave people feeling undervalued. We shouldn’t be demonising those unable to work, but creating an environment where work is available, properly paid and secure. Then we can tackle the tiny minority who are over reliant on the state.

This comes from a recognition that a divided society is an unhappy society. As bankers waltz on, bonuses in hand, ordinary workers are suffering. A paltry, watered-down bank levy does nothing to ease the sense of unfairness that the economic crisis created. The country cannot tolerate further division between the haves and have-nots. We can’t return to the way things were before. Labour gambled on an asset boom and a drip-down from the financial sector. While the revenue this created rescued our public services, the wider picture was ignored. But what this means is more government spending, not less. But this time, we need to spend to invest in the long-term. Only then will we see a rebalanced economy with stable, fulfilling jobs for everyone. This will bring the deficit down as genuine, secure growth returns to our country. It creates a future full of hope for our children, rather than debt and despair and it shows that while innovation is to be rewarded, greed never should be.

This government shows no signs of looking to the future, only a panicky rush to make changes before public will make it impossible. They may be building for their own futures, but for the rest of us, the outlook is bleak.

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Don’t Confuse Ideology with Arrogance

The former Lib Dem spin doctor, Olly Grender, drew my attention to an article on the Labour Uncut web site today, with the implication that I am an out and out Labour tribalist with a sense of moral arrogance. Naturally, I disagree. I believe passionately in the politics of the left, but I often find myself frustrated with the Labour machine as much as the opposition.

However, there is some truth in the line Peter Watt takes in the article that Labour has a sense of moral superiority. We do tend to think our way of doing things is better, fairer and just, well, right. It’s easy to forget in this context that some people, even those we profess to stand up for, may disagree with our approach. The entire working class doesn’t think that government can play a vital role in levelling an inherently uneven playing field. People of all incomes and backgrounds can hold the view that individuals should be left to sink or swim, according to their luck and efforts.

Peter Watt is right to remind Labour that projecting values onto people is a dangerous game. What he must not forget, however, is that while it’s entirely wrong to hold the blinkered view that our ideology is the only humane one, and that all Tories are evil, it’s vital we retain an ideology. Without a motivating ideology, the Labour movement means nothing. Trying to be all things to all people was arguably the major failing of the Blair / Brown years. A lack of courage of your conviction is as bad as no conviction at all.

In opposition, Labour must rediscover its soul, not simply allow itself to be buffeted by events and the media’s reaction to them. We must be able to say to people that as the Labour Party, we believe in social democracy. We believe the government can help people get on and improve their lives. We believe that life is inherently unfair and politics can help those born in less fortunate circumstances to have the chances to succeed. We believe that capitalism has its limits and the free market doesn’t have all the answers. We believe that when difficult choices are to be made, our first concern should be for those least able to protect themselves from the impact of the decisions.

Yes, we must listen to people more, but if we fail to approach them with a vision, then they’ll never trust us. Look at the state of the Lib Dems, who are suffering a backlash against their brand of politics in which long-held principles turn to dust at the sight of government.

If you think you can please all of the people, all of the time, you are doomed to failure. You can’t be a libertarian and a social democrat. You can’t be a free marketeer and a socialist. If you try, you’ll end up confusing yourself, confusing the electorate and most importantly, lose your soul.

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The Myth of Entrepreneurialism

It perhaps will surprise some of my more belligerent critics, but I am an entrepreneur. In 2008 I left a well-paid job as a lawyer in the City of London to set up my own business, This Fair Earth, tapping into the increasing demand for high quality, ethically-made goods. I used my own money to fund the start-up costs. I put together an extraordinarily detailed business plan which I think took the bank back somewhat when it was presented to them. I worked long hours to get the business off the ground and I am extraordinarily proud of what I have achieved.

However, the business is struggling now. It’s unquestionably a better run, more efficient and better targetted business than it was 2 1/2 years ago, but demand is falling. This despite the fact that November and December have historically been the strongest months, by a long way. I am hopeful there will be a rally this month and next, but I am markedly less confident than I was last year, in the teeth of the recession.

This is why I am skeptical, bordering on contemptuous, of the government’s ambitions for an increase in private sector employment. All the tax incentives in the world won’t help new businesses when consumer demand (from individuals or businesses) is rock bottom. We are allegedly in recovery, but there is very little optimism. Small business provides the employment for the majority of workers in this country, and yet the only jobs created in the past three quarters have been part-time. The number of full-time jobs has fallen during the “recovery”.

So, if you have a great idea and can afford to lose the money, by all means set up a business when you are kicked out of your job next year. You might succeed. However, even in the best of times, most start-ups fail within a year. With the government sucking money out of the regions and an unprecedented cut in the amount of spending coming from the centre, this percentage is likely to rise. This coalition has fanciful notions of an energised private sector leaping into the fray as the public sector is ravaged. It isn’t going to happen.

I have said it throughout the recession – the economy needs government support when demand is weak. It is exceptionally weak now. VAT rises and job losses in 2011 will make things worse. No-one has successfully cut their way out of recession and Ireland is once again showing us what not to do. This government steams ahead regardless.

So I offer two pieces of advice: First, don’t bet your mortgage on a start-up. If you have the money, the idea and the determination to establish a business, by all means try it, but don’t leave yourself exposed. And second, when you are working 20 hour days to make your vision become a reality, and you feel the confidence and demand seeping out of your market, make your voice heard. Fight back against the myths of entrepreneurship peddled by our new rulers, who can barely boast a day’s work in the private sector between them. Demand their support, because although they will never listen to the poor, unemployed and homeless, they might listen to you.

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Nick’s Fag Packets & Their Role in Your Future

There’s a reason why Nick Clegg has admitted to his smoking habit. It’s because littered throughout Whitehall are packets of Lambert & Butler with the government’s policies scratched on the back and someone was getting suspicious. Admittedly, they are piling up in the Department for Work and Pensions in particular, but turn a corner and you are just as likely to find them scattered in the Justice Department, the Home Office, the Defence Department and all around Michael Gove’s desk in education.

Let’s take a few examples found recently:

Discovered at the Tory Party Conference: “Cut Child Benefit for rich – ANNOUNCE FAST!!!”

Dropped outside IDS’s front door: “Housing Benefit – Check D. Mail for facts about claimants”

And standing to attention at the Defence Department – “NO PLANES!! Speak to Sarko (nb strikes!!)”

I estimate Nick must be on at least 40 a day, the rate the badly thought-through policies are emerging from this government.

The cut in Child Benefit for richer parents sounds like a sensible idea in a time of austerity. Why should better of people receive money they don’t need? Well, I support the principle of universality because it offers everyone a stake in our welfare state and if it’s eroded, then people begin to question why they should contribute at all. However, aside from this, it’s cheap and easy to administer. If you have kids, you get the support.

The coalition’s first run at changing this wouldn’t even have required a pack of 20 to sketch out, so flimsy and rushed was the announcement. The plan was to cut CB for families where there was single higher rate tax payer in the household. The press leapt on the fact that two earners with salaries below the higher rate threshold, but with a combined income far in excess of a single earner family, would retain the benefit, whereas the other family would lose out. “It’s too complicated to do it any other way”, we were told.

Now in transpires that not only is the new system unfair and frankly, a touch ridiculous, but it’s almost certainly unenforceable. Why? Because usually the woman claims the CB, and this new approach would require her to declare if her partner was a higher rate tax payer. The benefit is not linked to the salary of the higher earner and so HMRC doesn’t know who should get it and who shouldn’t.

Never fear, Nick chained another pack and Danny Alexander (fast becoming the poster boy for promotion above one’s abilities) sketched an idea to write to everyone to ask them if the partner earns higher rate. Poor Danny, more at home among the spruces of the Cairngorms, forgot that a) people lie, b) it’s virtually impossible to force people to ask their partners to disclose information and c) people’s incomes change over time.

The only effective way to administer this is through a wholesale change in the way income tax is calculated for couples, which would undoubtedly cost much more than the cut will save. It also rather begs the question why, if you are effectively means testing the benefit anyway, you don’t take the opportunity to iron out the mad inconsistencies in the policy as it was originally devised.

So, by all means debate universality and what we can and can’t afford, but perhaps Nick can do us all a favour and take up smoking Havanas, which would at least give his bumbling colleagues a little more space to plan their announcements before they are made.

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The Grim Reality of Osborne’s Sense of “Fairness”

I will post in more detail on the CSR in due course, when I’ve waded through the political double-speak and read between the lines, but for now, let’s look at the “fairness” assessment provided by the Treasury itself. There is a graph in the back of the CSR document which shows where the burden of the report’s measures fall hardest. Osborne, Alexander and co have been claiming the CSR is fair. Nick Clegg suggested it had “Liberal Democrat principles running through it like a stick of rock”.

Looking at the figures in Chart 5b on p.99 of the full CSR report, the analysis is this:

The bottom 10% of earners will suffer a hit of 1.6% of their net income, whereas the top 10% will lose out by 2.2%.

Ah! Fairness, you see! The rich proportionately lose more.

But consider this. The second hardest hit group is that poorest 10%. These are the group who rely on Housing Benefit (cut), disability benefits (cut) and the other £18bn which is being removed from the welfare budget. To illustrate, let me paint you a (simplified) picture.

A man needs to find some money to pay a debt, so he approaches two people. One man is very rich, a millionaire. “Can I have £100,000 please?”, asks the debtor. “Why?” says the rich man. “Because I need money and we are all in this together.” The rich man reluctantly agrees, after all he still has £900,000 and some money tucked away in the Cayman Islands, which the debtor doesn’t really care about.

The debtor then approaches a poor man. One of the poorest in the country with only £10,000 to his name. “Can I have £900 please?” “Why?”, says the poor man. “Because we are all in this together and besides, the rich man gave me £100,000, which is 10% of his money. I am only asking you for 9%.”

The poor man hesitates. ” But I really need all my money. For food, for clothes for my kids, for my house. When you take all that away, I don’t have £900 to spare.”

“Sadly”, says the debtor with a smile, “because we’re all in this together, you don’t have any choice” and he grabs the £900 and heads off to meet the millionaire for a drink. Well, they used to go to school together, you see.

I don’t think we should put up with living in a country where this becomes the definition of “fairness”.

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A Brief Comment on the “Bonfire of the Quangos”

Quangos have a bad reputation, something which I think is due, to a large extent, on the name, which sounds woolly and bureaucratic before anyone actually considers what they do. I don’t want to launch into a full-scale defence of quangos – I don’t know enough about them individually to comment. This is the inherent problem here. One quango runs British Waterways, the network of canals across the country, while another monitors the use of legal aid. To bundle them together is utterly meaningless.

My concern about the report today which abolishes a large number of quangos is that the government has failed to properly make the distinction either. The argument used by Francis Maude for the scrapping of 192 quangos is that they are not properly accountable.

The problem with this “accountability” line is that it is essentially nonsense. If a quango’s functions are rolled into a ministerial department, how does that make it more accountable to individuals? Are the people who live in that minister’s constituency going to say “Well, the work done by the Renewable Fuels Agency, under his department, hasn’t been up to much, I think I’ll vote Green”. We certainly can’t get a situation where the heads of these bodies are directly elected, since most functions of quangos are essentially non-political.

I am actually all in favour of expert bodies, outside government, being responsible for specific areas of activity where appropriate. As long as the work is important, I’d much rather it was done by people who know what they are doing than being notionally “accountable”.

Scrap useless bodies of course, but bringing things under ministerial control and basing this review on “accountability” is ridiculous. Michael Gove can’t get a list of schools right, why on earth would we want additional important responsibilities falling to him?

I think the accountability approach is most likely a cover for more ideological cuts to services which people already think are wasteful, despite not really understanding what they are. It’s an easy target and like most easy targets, there are usually much more difficult consequences not far behind.

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