Question marks over Rory Stewart’s superfast vision of the “big society”

Under the banner of accountability, the coalition is laying waste to our public services.

Writing in the Observer on Sunday, Rory Stewart, former diplomat and now Tory MP for Penrith, describes how community activists in his constituency are co-operating to bring superfast broadband to the isolated hills of the Eden district in Cumbria – an area he says is in the vanguard of the "big society".

Stewart names some of the scattered enthusiasts behind the scheme:

Libby, in Kirkby Stephen, is photographing and mapping all existing telecoms cabinets. Freddy, in Morland, is exploring alternative technologies, from microwave transmitters and wireless hubs to laying fibre in sewers . . . Kate, in Stanwix, is training people to get online. Daniel, in Alston, is piloting medical tests from homes.

In other words, the project (it's been around for years but Stewart hopes it will now win government funding) is the work of an informal network of people, local in scale but not confined to one small village; indeed, "they came from 100 villages".

This isn't like a neighbourhood clubbing together to save the BS symbol par excellence, the local pub. No single village could provide all the expertise required to provide broadband for an entire region. Empowering the people most capable of making a difference isn't always the same thing as decentralisating decision-making as far from Westminster as possible.

Unfortunately, this isn't a lesson that fits in with the wider picture of government's attitude towards our public services.

Take the school sports fiasco, which forced the government into an embarrassing U-turn in December. The plan was to abolish School Sport Partnerships (SSPs) – which create links between state schools to enable children to play more sport – and leave the responsibility with schools.

Although Michael Gove branded SSPs inefficient, they do things that individual schools don't. They bring children from different schools together for competitive sports days and allow children to try out niche activities that their individual school couldn't provide. They represent money dedicated to sport which cash-strapped schools might rather spend on subjects more critical to the next Ofsted inspection.

Lots of people kicked up a fuss, and it became clear that the SSPs had increased participation in sport. The folly became obvious, and now at least some of the funding will remain in place.

But the rescue of one valuable programme from the bonfire shouldn't distract from the wider picture, which is one of whole levels of state organisation being stripped away with little thought for who will take over their responsibilities.

Storm warning

The announcement that the government's budget for flood defences is to be cut by 30 per cent – when it was already far short of the £1bn a year the Environment Agency says we should be spending – met with howls. To spend less on flood defences, when each pound spent saves an estimated eight down the line, is the definition of a false economy.

The problem isn't just underfunding, though. The idea of devolving responsibility for flood management to local councils is concerning in itself.

Natural disasters are unruly beasts that don't care about the boundary lines separating one local authority from another. Flood runoff can end up spoiling carpets far from where it breached the riverbanks.

Accordingly, the measures we take against flooding should not be confined to the very local, any more than they should be completely centralised: some planning must take place somewhere in the middle, on the scale of water tables and flood plains. It is difficult to model flooding on that scale, which means that local councils won't have the expertise or the money to do it.

After the disastrous floods of 2007, the government's Pitt Review recommended setting up "catchment floor management plans" to model flood risk for each river basin. The Environment Agency duly set up the plans, to be administered by the EA in each of England's nine regions.

Unfortunately, the English system of regional government was uncomfortably unaccountable and bureaucratic. Consequently, the entire system is being abolished by the coalition. This quiet upheaval leaves what has been described as a "black hole" in our planning system.

As for the question of who will be responsible for the aspects of contingency planning that local councils are not equipped to deal with . . . well, let's solve that problem when the water is lapping at the sandbags. Cut first, ask questions later.

Imagine if the government were to approach Cumbria's internet shortage in the same way. Instead of empowering the local networks that are ready and willing to provide the service, the response of the real-life government would be simple: ask each village council to cough up for the scheme out of its own (reduced) budget.

Local councils might not want to fund high-speed broadband, and individually they wouldn't be able to do so. Too bad – carry on living in the slow lane, Cumbria.

Demonstrating how community-based, collaborative, bottom-up governance can work is all very well, but doing so while laying waste to our existing public infrastructure takes the shine off that somewhat.

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BHS is Theresa May’s big chance to reform capitalism – she’d better take it

Almost everyone is disgusted by the tale of BHS. 

Back in 2013, Theresa May gave a speech that might yet prove significant. In it, she declared: “Believing in free markets doesn’t mean we believe that anything goes.”

Capitalism wasn’t perfect, she continued: 

“Where it’s manifestly failing, where it’s losing public support, where it’s not helping to provide opportunity for all, we have to reform it.”

Three years on and just days into her premiership, May has the chance to be a reformist, thanks to one hell of an example of failing capitalism – BHS. 

The report from the Work and Pensions select committee was damning. Philip Green, the business tycoon, bought BHS and took more out than he put in. In a difficult environment, and without new investment, it began to bleed money. Green’s prize became a liability, and by 2014 he was desperate to get rid of it. He found a willing buyer, Paul Sutton, but the buyer had previously been convicted of fraud. So he sold it to Sutton’s former driver instead, for a quid. Yes, you read that right. He sold it to a crook’s driver for a quid.

This might all sound like a ludicrous but entertaining deal, if it wasn’t for the thousands of hapless BHS workers involved. One year later, the business collapsed, along with their job prospects. Not only that, but Green’s lack of attention to the pension fund meant their dreams of a comfortable retirement were now in jeopardy. 

The report called BHS “the unacceptable face of capitalism”. It concluded: 

"The truth is that a large proportion of those who have got rich or richer off the back of BHS are to blame. Sir Philip Green, Dominic Chappell and their respective directors, advisers and hangers-on are all culpable. 

“The tragedy is that those who have lost out are the ordinary employees and pensioners.”

May appears to agree. Her spokeswoman told journalists the PM would “look carefully” at policies to tackle “corporate irresponsibility”. 

She should take the opportunity.

Attempts to reshape capitalism are almost always blunted in practice. Corporations can make threats of their own. Think of Google’s sweetheart tax deals, banks’ excessive pay. Each time politicians tried to clamp down, there were threats of moving overseas. If the economy weakens in response to Brexit, the power to call the shots should tip more towards these companies. 

But this time, there will be few defenders of the BHS approach.

Firstly, the report's revelations about corporate governance damage many well-known brands, which are tarnished by association. Financial services firms will be just as keen as the public to avoid another BHS. Simon Walker, director general of the Institute of Directors, said that the circumstances of the collapse of BHS were “a blight on the reputation of British business”.

Secondly, the pensions issue will not go away. Neglected by Green until it was too late, the £571m hole in the BHS pension finances is extreme. But Tom McPhail from pensions firm Hargreaves Lansdown has warned there are thousands of other defined benefit schemes struggling with deficits. In the light of BHS, May has an opportunity to take an otherwise dusty issue – protections for workplace pensions - and place it top of the agenda. 

Thirdly, the BHS scandal is wreathed in the kind of opaque company structures loathed by voters on the left and right alike. The report found the Green family used private, offshore companies to direct the flow of money away from BHS, which made it in turn hard to investigate. The report stated: “These arrangements were designed to reduce tax bills. They have also had the effect of reducing levels of corporate transparency.”

BHS may have failed as a company, but its demise has succeeded in uniting the left and right. Trade unionists want more protection for workers; City boys are worried about their reputation; patriots mourn the death of a proud British company. May has a mandate to clean up capitalism - she should seize it.