Cooperation must be at the heart of Labour's renewal

Councils are already implementing a model that could revolutionise public services nationally.

The next Labour government will face a double whammy of rising expectations, with less money for public services and welfare provision. If we want to protect people who rely most on public services, we will need to do differently with less. If we try and do more with less, we will fall flat on our faces. Different with less can work if we give more decision-making power to the people and communities who use those public services, because they have a direct interest in making sure services are as effective as possible. Whatever the amount of funding on offer, empowering people and their communities creates better outcomes. Labour councils around the country are already putting this idea into practice, and it offers a model that can be extended right across public services nationally.

Many council or housing association tenants are dissatisfied with the standard of housing management they live with. Repairs are done late and to a poor standard. Housing officers can be dismissive and slow to respond to requests for help. Anti-social neighbours are left unchallenged. These things happen because the tenants themselves have no direct control over the people providing the services. But this changes when tenants elect local boards that appoint the housing managers, or in cooperative housing schemes where everyone living on an estate has a share in owning it. Estates like Blenheim Gardens in Brixton which is run by an elected resident management organisation, or Coin Street Housing Cooperative on London’s South Bank, show that when tenants are in control, services improve faster.

As we grow older we rely more on social care and home help. For someone who’s lived their life independently it can be a frightening experience to suddenly be told who will come into your home and when, what you will eat, when you will be bathed, and even when you will go to the toilet. With care staff under intolerable pressure normal human interaction is reduced to a perfunctory minimum and the older person’s own preferences are barely considered. This is no way to treat someone towards the end of a lifetime of hard work and self-reliance. This situation can be turned round by setting a budget for the older person and letting them choose, with professional advice, the help and services they would prefer. Take this a step further and let people combine their budgets in ‘micro-mutuals’ of service users and you put real purchasing power in their hands, forcing providers to offer services that better meet their clients’ needs with higher standards of care and support tailored to each individual.

Some inner-city housing estates suffer high levels of violent youth crime. There are estates in parts of London where the majority of young people are involved in gangs that carry knives and guns and involve themselves in drug dealing, robbery and assaults. But there are also examples of initiatives that successfully steer young people away from harm. On the Myatts Field Estate in Brixton the community took action itself, using their own understanding of the problems in their own neighbourhood and making use of their own ability to reach out to the young people getting involved in gangs. They set up a range of activities including informal mentoring, sports, dance, cookery, even trips to other parts of London to open their young people’s eyes to the positive alternatives available to them. Over three years they got 80 young people out of gangs and steered their lives back on track – a rate of success dramatically more successful than the council’s own youth interventions despite having only a tiny fraction of the resources. This demonstrates the power of community leadership, so in Lambeth we are setting up a youth services trust owned by local people that will support each estate to identify and bring in the services and activities that will make a difference to their young people. This isn’t about turning amateurs into professionals, it’s about putting the professionals under the control of the people who live with the problem. There are safeguards to make sure no one section of the community can exclude any other, but instead of fighting the system to get the change they need the community can use their energy to fight the problem.

Public services become more effective when the people who use them are in charge. By shifting power to service users we create a partnership of equals that leads to genuine cooperation between providers and the people they serve. The result is better services and more resilient communities. Over twenty Labour councils are working together as part of the Cooperative Councils Network to pilot new approaches like these across all our services. By empowering people we can give them back the power to change their lives. We cannot continue locking vulnerable people into dependency by taking away their ability to influence the things that are done to them. We live in a highly diverse society, and we cannot meet such a complex pattern of need if we seek to control everything from the centre. But this agenda is not just about changing Britain, it’s also about winning back support for Labour. People want public services that meet their needs better, and they want more control over the decisions that affect their lives. Change is never easy, but if we refuse to change we will get stuck in a cycle of salami-slicing services that will leave people in despair. We recognise there is no bottomless pit of money – times are hard, and if we pretend otherwise people won’t vote for us. So we need to show we can do things better for less by putting the resources of the state under the control of the people who rely on it.

Lambeth was a by-word for what went wrong with Labour in the 1980s. Today Lambeth, alongside other Labour councils, is building a new agenda based on empowerment and cooperation that can help shape Labour’s renewal in the 2010s.


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The twelve tricks in George Osborne's spending review

All Chancellors use chicanery, and George Osborne is no exception.

There is no great shame to a wheeze: George Osborne is no more or less partial to them than other Chancellors before him. Politicians have been wheezing away since history began. Wheezes aren’t even necessarily bad policy: sometimes they’re sensible as well as slightly sneaky. And we shouldn’t overstate their significance: the biggest changes announced yesterday were described in a clear, honest and non-wheezy way.

But it’s fun to try to spot the wheezes. Here are some we’ve found so far.


  1. Give people less time to pay their tax bills. Yesterday the Chancellor announced tax rises that will raise, in total, a net £5.5bn in 2019-20. A sixth of that total – £900m – results from the announcement that, from April 2019, anyone paying Capital Gains Tax (CGT) on the sale of a house will have to cough up within 30 days. Has the Chancellor made a strategic decision to increase taxes to pay for public services? Not really – he’s just moved some tax forward from the subsequent year to help his numbers stack up, at the price of bigger hassle for people who are selling houses. Not necessarily a bad thing – but a classic wheeze.


  1. Dress up a spending cut as a minor bureaucratic change. The Treasury yesterday announced what sounds like a sensible administrative change to the Government’s scheme for automatically enrolling people into pensions: “to simplify the administration of automatic enrolment for the smallest employers in particular, the next two phases of minimum contribution rate increases will be aligned to the tax years”. Nice of them to reduce bureaucratic hassle for the smallest employers. This also happens to save the Government £450m in 2018-19, because instead of paying an increased subsidy into people’s pensions from January 2018, it will do it from April 2018.


  1. “Tuck under”.  The phrase “tucking under” is a Whitehall term of art, best illustrated with an example. We learnt yesterday that “DfID [the Department for International Development] will remain the UK’s primary channel for aid, but to respond to the changing world, more aid will be administered by other government departments, drawing on their complementary skills.” That sounds like great joined-up government. It also, conveniently, means that the Government can continue to meet its target of keeping overseas aid at 0.7% of Gross National Income, without having to increase DfID’s budget at the same rate as GNI: instead, other departments pick up the slack. Those bits of other departments’ budgets have thus been “tucked under” the ODA protection. See also: the Government is “protecting” the schools budget in real terms, while slashing around £600m from the funding it gives to local authorities to support schools, so that schools will now have to buy those services from their “protected” funding – thus “tucking” the £600m “under” the protected schools budget. (See also: in the last Parliament, the Government asked the NHS to contribute to social care funding, thus “tucking” some social care “under” the protected health budget.)


  1. Cumulative numbers. Most of the figures used in the Spending Review are “in-year” figures: when the Government says it is giving £10bn more to the NHS, it means that the NHS will get £10bn more in 2019-20 than it got in 2015-16. Then you read something like: “The Spending Review and Autumn Statement provides investment of over £1.3 billion up to 2019-20 to attract new teachers into the profession.” That’s not £1.3bn per year – it’s the cumulative figure over four years.


  1. Deploy weasel words. The government is protecting “the national base rate per student for 16-19 year olds”. Sounds great – and it will be written up in many places as “Government protects 16-19 education”. But the word “base” is doing a lot of work here. Schools and colleges that educate 16-19 year olds currently get a lot of funding on top of the “base rate” – such as extra funding for disadvantaged students. Plans for that funding have not yet been revealed.


  1. Pretend to hypothecate a tax. The Chancellor announced yesterday that – because the EU won’t allow him to reduce the ‘tampon tax’ – he’ll instead use the proceeds of that tax to pay for grants to women’s charities. This sounds great – but all he’s really saying is that, among all the many other millions of pounds of grants issued by the government to various causes, £15m will be given to some women’s charities, which might have got that funding anyway. It’s not real hypothecation: it’s not as if women’s charities will get more if there’s a spike in tampon sales. See also: announcing that local authorities can raise council tax so long as they use it to pay for social care – LAs would probably have spent just as much on social care anyway (and other services would have suffered).


  1. Shave away a small fraction of a big commitment. The Conservative party made great play in the election campaign of its commitment to provide 30 hours of free childcare to 3 and 4 year olds in working families. In the July Budget, it made more great play of re-committing to this. Yesterday, it announced that “working families” excluded any parent working less than the equivalent of 16 hours at the minimum wage, or more than £100,000. That sounds like a fairly small change – but it saves the Government £125m in 2020.


  1. Turn a grant into a loan. If government gives someone a grant, that is counted as spending and increases the public sector deficit. If instead the government gives someone a loan, that doesn’t count against the deficit, because it’s assumed that the loan will be paid back (so the loan is like an asset which the Government is holding). Recently we’ve seen a lot of government grants turning into loans – in the July Budget it was student maintenance grants; yesterday it was bursaries for trainee nurses.


  1. “Reverse” a decision that hasn’t happened yet. In 2012 the Government announced that, from April 2016, it would remove the 3% “diesel supplement” that puts a higher tax on company cars that use diesel than on others. Yesterday, it cancelled this, saving over £265m per year for the rest of the Parliament. People complain less about you cancelling a tax cut when you haven’t done the tax cut yet. (Perhaps this doesn’t qualify as a full wheeze, but there’s something wheezy about it.)


  1. “Protect” things in cash terms. If you really want to protect an area of spending, you should at least increase it in line with inflation, so that it can still buy the same amount of stuff. This government – like the Coalition before it – enjoys protecting things only in cash terms. Examples yesterday included the basic rate of funding per 16-19 year old in education, and the entire children’s services budget.


  1. Freeze things in cash terms. Yesterday the government announced that the repayment threshold on student loans – the level above which ex-students must start paying back their loans – will remain frozen in cash terms for 5 years, instead of increasing with earnings (which is what has happened to date). This saves the Government £200m in 2019-20. In a particularly bold move, the Government has even applied this rule to loans that have already been issued – changing the terms on which students took out the loans in the first place.


  1. Hide all these wheezes in sweeping statements. The first chapter of the Spending Review tells us that “£3 billion [of reduction in the deficit] is being delivered through reforms such as Making Tax Digital and further measures to tackle tax avoidance.” The innocuous phrase “reforms such as” covers the bringing forward of £900m in Capital Gains Tax (see number 1 above) and the £450m saved by delaying automatic enrolment into pensions (see number 2 above).

Catherine Colebrook is chief economist at the Institute for Public Policy Research