Ten years of Policy Exchange

Free Schools, elected police chiefs, welfare reform - this is the legacy of my think tank.

Policy Exchange was founded ten years ago. We believed - and still do - that there is a role for the State, albeit a much smaller and more efficient one, to help improve peoples' lives. We also felt that people should have more of a direct say on the decisions that affect themselves and their families.

Decentralisation was one of our key themes and some of our better known policy recommendations such as directly elected police commissioners and Free Schools stem from this initial premise. The first elections for police and crime commissioners will take place this November. We believe that a police chief who is directly accountable to the people he or she serves will improve not only the standard of policing at a local level but also re-establish trust in the police, something that has diminished recently with the recent phone hacking scandal.

We first put forward policy recommendations for the setting up of Free Schools because we believe that every parent should have access to a good, local school which offers their child the best possible education. Teaching is one of the most important jobs in the country. We want schools, especially in the most deprived areas of the UK, to have the means to attract the best possible teachers. That means challenging dated concepts such as national pay bargaining, which defines how much a teacher should earn based on time spent in the job, rather than ability. Head teachers know how good a teacher is and should be allowed to pay that person accordingly. Likewise if someone is not cut out to be a teacher, then he or she should not simply be moved from one school to the next as is currently the case. We need to reform the education system to attract the brightest and the best to help our children achieve their potential.

The pupil premium - an additional cash payment for the most disadvantaged children - is one idea that some people forget was first floated by Policy Exchange. The Liberal Democrats took the idea forward in their 2010 election manifesto and the policy came into being this year.

Our work on re-establishing the contributory principle in the welfare system has been taken forward by both Labour and Conservative politicians. The universal credit, set to be introduced in 2014, is a stepping stone to making it more worthwhile to work rather than remain on benefits. However, there is a huge amount more to be done to create a fairer welfare system. Recently we have proposed tougher sanctions and conditions on jobseekers who are not doing all they can to find work. At the same time, the government has a responsibility to help jobcentre advisers identify those people who are the least likely to be able to hold down a job due to alcohol or drug problems or a history of mental health problems. These people need the most help and we need to create a system where on day one of someone signing on, a Jobcentre adviser has the information to tailor specific help towards people with particular needs.

While a number of our policy recommendations have found their way into Coalition thinking we are not resting on our laurels. There is a huge challenge facing all political parties - how do you improve public services with no money. We will be publishing a number of reports over the coming months which specifically look to provide answers to this question.

How can you improve the effectiveness of the police when they are faced with 20 per cent budget cuts over the next three years? We think the police could deploy existing, fully trained officers more effectively rather than simply hire more staff - deployment is more important than employment. Private companies and civilian staff can play a role in delivering back office functions, such as manning call centres, freeing up time for officers to carry out more visible policing roles which is what the public is crying out for.

Energy bills are the biggest concern to most people around the country if you look at any of the opinion polls. We think the government could help energy companies reduce electricity bills by revising current climate change policy. We believe that global warming is happening and we believe that the UK has a responsibility to reduce its carbon emissions. But, current energy policy throws billions of pounds of taxpayer's money on the deployment of specific, expensive technologies such as offshore wind. Government should spend more of its budget on financing innovation directly, rather than subsidising the mass roll out of expensive technologies.

Opening up public data is something that this government is committed to doing and we fully support this aim. Only this week we published a report calling on a right to open data. All non personal information held by government departments (maps and postcodes for example) should be made available for free. We think that entrepreneurs and civic activists could use this information to create new "Apple-like" services and products. Free, open data could create billions for the economy.

As you can probably tell, there is plenty of work to do. We need to make sure that the modern day Policy Exchange rises to the challenge.

Neil O'Brien is the Director of Policy Exchange

Neil O'Brien is the director of Policy Exchange.

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Scotland's vast deficit remains an obstacle to independence

Though the country's financial position has improved, independence would still risk severe austerity. 

For the SNP, the annual Scottish public spending figures bring good and bad news. The good news, such as it is, is that Scotland's deficit fell by £1.3bn in 2016/17. The bad news is that it remains £13.3bn or 8.3 per cent of GDP – three times the UK figure of 2.4 per cent (£46.2bn) and vastly higher than the white paper's worst case scenario of £5.5bn. 

These figures, it's important to note, include Scotland's geographic share of North Sea oil and gas revenue. The "oil bonus" that the SNP once boasted of has withered since the collapse in commodity prices. Though revenue rose from £56m the previous year to £208m, this remains a fraction of the £8bn recorded in 2011/12. Total public sector revenue was £312 per person below the UK average, while expenditure was £1,437 higher. Though the SNP is playing down the figures as "a snapshot", the white paper unambiguously stated: "GERS [Government Expenditure and Revenue Scotland] is the authoritative publication on Scotland’s public finances". 

As before, Nicola Sturgeon has warned of the threat posed by Brexit to the Scottish economy. But the country's black hole means the risks of independence remain immense. As a new state, Scotland would be forced to pay a premium on its debt, resulting in an even greater fiscal gap. Were it to use the pound without permission, with no independent central bank and no lender of last resort, borrowing costs would rise still further. To offset a Greek-style crisis, Scotland would be forced to impose dramatic austerity. 

Sturgeon is undoubtedly right to warn of the risks of Brexit (particularly of the "hard" variety). But for a large number of Scots, this is merely cause to avoid the added turmoil of independence. Though eventual EU membership would benefit Scotland, its UK trade is worth four times as much as that with Europe. 

Of course, for a true nationalist, economics is irrelevant. Independence is a good in itself and sovereignty always trumps prosperity (a point on which Scottish nationalists align with English Brexiteers). But if Scotland is to ever depart the UK, the SNP will need to win over pragmatists, too. In that quest, Scotland's deficit remains a vast obstacle. 

George Eaton is political editor of the New Statesman.