Tony Blair has posted an article on public service reform on the Euston Manifesto site. It's an interesting piece. But for my money Daniel Finkelstein completely demolishes Blair's case in this post:
'...[the Prime Minister's article] demonstrates the confusion that has bedevilled his public service reform programme.
Here, for instance, is the way he describes the phases of his policy:
"Our strategy for public services has been through three phases. The first phase was a zero tolerance approach to failure, with strong central direction and public targets, to ensure that under-investment could not be used as an excuse for endemic failure. This was then followed by a correction of the long period of under-investment. We are now into the third phase: progressive reform."
This is a good description, but a terrible strategy.
Surely the right way to reform, would have been the other way round entirely. You start with the reform, put the money in as the reforms begin to bite and finish by correcting any serious political problems caused by deregulation.
The piece also contains an important contradiction. Mr Blair advocates much greater consumer choice (that is what he means by progressive reform) and then says:
"A service can and must be designed to ensure that access is equitable. The content of what is provided, the ways that staff work, the outcomes expected for citizens: all these are subject to stringent regulation. These regulations apply to all sectors and the claims that the reforms lead to two-tier services are quite wrong."
But if all these things are going to be equal, what would consumers be choosing between? You would be imposing a cost (making a choice) without providing a benefit (the access to a better service).
Altogether, I thought this article very important. It illustrates that the Blair public service reform agenda (which I'd always rather unthinkingly supported because it seemed to point in the right direction) is totally incoherent.'
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If people are paid to do nothing, that's exactly what they'll do
By Jeff Randall
Daily Telegraph
22/12/2006
As new initiatives from our useless Government go, John Hutton's campaign to tackle economic inactivity and promote social mobility sounds better than most. This week Hutton, the Work and Pensions Secretary, said this country was blighted by at least 100,000 scroungers (my word, not his), who are locked into a culture of "can work, won't work".
He denounced the gimme-gimme-gimme attitude of some benefits claimants, and pointed out: "If we are to break the cycle of benefit dependency, we need to ask whether we should expect more from those who remain on [support] for long periods of time." Hutton concluded that, for those who reject programmes designed to increase their prospects of getting a job, "there should be consequences, including less benefit or no benefit at all".
Hey, John, you're in danger of making good sense. There's only one problem. Your party hasn't just wandered into power. You have been holding the reins for nearly a decade. How come it has taken so long for the penny to drop? More importantly, what are you going to do – yes, do – to reform the eternal layabout? Words count for nothing, unless you have the stomach to use a stick. Simply dishing out carrots is hopeless.
It's sad, but some loafers clearly require rockets up their backsides, as well as alarm clocks in their bedrooms, in order to get up for work. As any economist will tell you, when the supply of anything is subsidised – goods, services, even behaviour – we usually end up with more than we need. Just look at the EU's beef mountains and wine lakes. In the case of domestic welfare, by paying people to do nothing, we are subsidising idleness. Not surprisingly, even in Brown's "Booming Britain", which has recorded 38 successive quarters of economic growth, there is an embarrassing surfeit of work-shy locals.
Economically illiterate liberals do not want to hear this, but if we really intend to reduce the number of long-term inactive workers, the subsidies to idleness must stop. Completely.
Of course, I'm not talking about people with genuine disabilities or families that have suffered tragic losses. No one expects a taxi driver, diagnosed with epilepsy, to carry on as before. And if a big employer in an area of high unemployment suddenly shuts, we shouldn't expect all those turfed out to find work the very next day. The deserving poor do exist.
But there are many fewer of them than the social-security mafia would have us believe. Those with "jobs" in the benefits system, whose living depends on the existence of welfare junkies, aren't likely to help us eradicate the source of their pensionable salaries.
Labour's "hard-talk, soft-walk" policy towards welfare has failed miserably. Figures from the Office of National Statistics show that there are now 37,000 more unemployed young people, aged 16-24, than in May 1997, Tony Blair's first election victory.
Soon after that, in his inaugural Budget speech, Gordon Brown said: "In place of welfare, there should be work." And, in a specific reference to those who were, perhaps, hoping that New Labour didn't mean hard labour, Brown warned: "There will be no option to stay at home on full benefit… When they [young people] sign on for benefit, they will be signing on for work. Benefits will be cut if young people refuse to take up the opportunities."
Powerful stuff. But, as is often the case with Brown, words and deeds then sped off in different directions. Ten years on, Britain has 2.7 million recipients of incapacity benefits, about one million of whom the Government believes are fit to work. Instead of using his Big Clunking Fist to bludgeon more than £5 billion a year in tax from our company pensions system, Brown should be shaking it at those whose indolence makes a mockery of his work ethic.
As a student of American society, he should know that there has been an extraordinary experiment in the United States which, contrary to the dire predictions of bleeding-heart social workers, succeeded in slashing welfare dependency in a state that had become a byword for dysfunctionality.
I'm talking about "the Wisconsin Miracle". American commentators refer to it as such, because, in just 12 years, a conservative administration, led by Governor Tommy Thompson, was able to cut the state's welfare roll from 98,000 to just 7,000. In the 1980s, Wisconsin was an archetypal blue-collar region, which had fared badly after the decline of its smoke-stack industries. As unemployment rose, so did welfare payments and all the state taxes needed to foot the bills.
By 1986, local traders were placing advertisements in the Wall Street Journal urging entrepreneurs not to come to Wisconsin because it was so bad for business. Wisconsin's welfare payments were the highest in the Midwest. As would-be claimants from other states poured in, they met businesses going the other way, trying to escape. It was chaos.
In desperation, the electorate turned to Thompson, a radical who promised a complete change of direction. His subsequent welfare reforms have done more to lift people out of poverty than any amount of well-meaning charity. Thompson had a single premise: "Every fit person can do something." On this basis, Wisconsin became the first state to introduce work requirements for welfare recipients. As he said: "If Wisconsin is going to offer them a ladder, then we require them to use the ladder."
This included linking parents' welfare cheques to their children's record of attending school. Truancy resulted in benefits being cut. If a child missed half a month's schooling, that portion was deducted from the family's welfare payment. Keep the children in school and they have a better chance of breaking out of the cycle of ignorance, unemployment and despair. Simple, isn't it?
Thompson stopped incentivising teenage girls to become single mothers and started jailing those fathers who dodged child support payments. Most importantly, he brought in a requirement for welfare claimants to find a job within 24 months or lose their benefits, i.e., "welfare was not a way of life".
In order to receive a welfare cheque, Wisconsinites had to be enrolled in a jobs programme and spend a minimum of 20 hours a week looking for work, performing community service, or improving basic skills. Those who didn't go along with this, didn't get paid. If a participant did only 16 hours a week, then the welfare cheque would be cut by a quarter. No participation meant no cheque. Nothing.
To help genuine job seekers, Wisconsin provided childcare, healthcare and transportation. It removed the roadblocks to self-sufficiency.
If Hutton is planning something similar, he deserves support. But I doubt it. The Clunking Fist would much prefer that we are all clients of his nanny state.
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