Labour's next big idea: the "relational state"

Recognising the importance of human relationships could revolutionise public services.

Sparked by the financial crisis and subsequent recession, the Labour Party has been engaged in a serious debate about the core tenets of its economic policy. And there is little doubt that Ed Miliband has started to carve out a distinctive position on "responsible capitalism". However, there has so far been much less discussion about Labour’s approach to public services. If the party wins the next general election it will assume responsibility for a state both substantially reformed from the one it left in 2010 and under unprecedented financial pressure.

There is much of which Labour can be proud from its recent period in office: NHS waiting times, crime rates and school failure all tumbled. However, there was collateral damage from achieving these results, requiring a re-assessment of the party's dominant approach to running the state. The desire to demonstrate "delivery" led to a vast increase in command and control management techniques, which, while sometimes necessary to deal with appalling performance, tend to alienate the workforce and crowd out space for responsiveness and experimentation.

The correct instinct to give citizens power over public services narrowed to a choice between providers, neglecting the many ways in which people might shape the services they use. And the case for institutional pluralism and diversity beyond the public sector was often reduced to a fight about competition. Elsewhere, the drive for high standards of "customer service" was inattentive to the role of public services in enabling people to forge relationships with each other and a sense of common life. And finally, the fear that any variation or contingency in service provision would produce unacceptable inequalities drove a bias towards centralisation and standardisation that sapped professional creativity and local mobilisation.

These lessons don’t mean abandoning everything Labour did in government, less still failing to defend the real strengths of its record. But they should prompt hard thinking about how Labour would govern in the future, not least because major challenges – from chronic health conditions, to anti-social behaviour and educational excellence – cannot be addressed by the state delivering solutions onto an unsuspecting public.

In an IPPR publication out today, we argue that combining the best instincts of "New Labour" and "Blue Labour" offers the outlines of a fresh approach to improving public services and governing the state. Like New Labour this should be firmly anchored on the side of the citizen, in favour of non-state provision where appropriate, and intolerant of poor standards. And like Blue Labour it should care about institution building, guard against bureaucracy, and focus on how services are run, not just what they achieve.

So what might that mean in practice?

Given the major fiscal pressures it would face, the first task for an incoming Labour government would be to set strategic priorities. We would put childcare and social care high on that list, but the party should find ways to involve the public honestly and directly in the trade-offs and choices facing the country. It might convene a delib­erative citizen’s convention to provide advice and input to politicians ahead of the next Spending Review.

Beyond this, Labour should set a small number of core goals and citizen entitlements in the main public services, leaving more space to innovate. In education, for example, the focus could be on a national attainment "floor target" for schools and an entitlement to catch-up support for pupils at risk of falling behind. In health, it could be waiting times and a right to GP access. But there can’t be a hundred "priorities".

In the end, public services are only as good as the people working in them. In the past, Labour used extra spending to oil the wheels of reform. With less cash around, a grand bargain is needed that frees professionals from a excessive compliance culture, draws them into shaping and governing services and challenges them to stand up to bad practice.

Rather than a tired debate of public versus private, the focus should be on a supply-side revolution led by a new wave of autonomous providers. Self-governing institutions, bounded from the over-reach of both bureaucracy and profit, are most likely to foster strong relationships and service innovation. For instance, while the focus is on the funding challenge, social care services are crying out for greater humanity and innovation, with new forms of mutual and cooperative provision in the lead.

A more relational state also requires the mobilisation of local leadership and initiative. So Labour should decide on those things which must be done nationally and decentralise power elsewhere – starting with our major cities. They could be put in charge of Housing Benefit and housing capital expenditure, with a remit to use those resources to make housing more affordable in their area.

Decentralisation needn’t stop at the town hall though. Citizens should be given meaningful power over services. This can be focused on both individuals (such as those with long term health conditions managing budgets and care planning) and groups (such as parents associations having a say on the governance and priorities of children’s centres).

Finally, the drive for strategic priorities, institutional independence, professional autonomy and local control must be matched by strong forms of accountability, which extend beyond just targets and markets. In education, this could mean all schools having academy-style freedoms to innovate, balanced by democratically accountable local school commissioners. Similarly, it could mean reducing the amount of statutory guidance for teachers, matched by longer and tougher probation periods so that poor performers are removed.

The political viability of pivoting towards a more relational state rests on the basic question of whether voters want a government that tries to solve their problems for them, or one which gives them power over their lives. Does the public want outcomes delivered for them or space to foster the relationships that matter?

In the past, politicians have tended to go into election campaigns promising better schools or more nurses. That might not work anymore, especially when the money to pay for such promises has dried up. But if such pledges are abandoned, what comes in their place?

These electoral dilemmas are not the place to start thinking about how the next Labour government might run the state, but they are among the places where this debate will have to end up.

Graeme Cooke and Rick Muir work for the IPPR but write here in a personal capacity.

Labour Party leader Ed Miliband addresses workers at Islington Town Hall on 5 November in London. Photograph: Getty Images.

Graeme Cooke is research director at IPPR

Rick Muir is associate director at IPPR

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When Theresa May speaks, why don’t we listen?

Not many Prime Ministers have to repeat themselves three times. 

Theresa May is the candidate of Brexit and market panic. She ascended to the highest office because, in the fraught weeks after Britain’s vote to leave the European Union, she represented a safe haven for nervous Conservative MPs, the dependable family mutual that remained open while all along the Conservative high street, her rivals were shutting up shop.

Her popularity, as revealed in high poll ratings outside Westminster, too, owes itself to the perception that she is a serious politician in serious times, happily installed atop the ship of state to guide it through the rocky waters of Brexit negotiations.

May’s premiership has been defined by market panics of a different kind, however. The first is in the currency markets, where sterling takes a tumble whenever she pronounces on Britain’s future relationship with the European Union, falling both after her conference speech on 2 October and after her start-of-the-year interview with Sophy Ridge on 8 January. The second is in the opinion pages, where May’s stock oscillates wildly from bullish to bearish.

In the first months of May’s government, she was hailed as an Anglo-Saxon counterpart to Angela Merkel: a solid centre-right Christian democrat who would usher in a decade of conservative hegemony. More recently, she has been compared to Gordon Brown because of her perceived indecisiveness and repeatedly accused of failing to spell out what, exactly, her government’s Brexit objectives are.

In a symbol of the splits on the right between the Brexiteers and Remainers, the Economist, that bible of free-market globalisation and usually a reliable tastemaker as far as Westminster groupthink is concerned, began 2017 by dubbing the Prime Minister “Theresa Maybe”. Though May’s Downing Street is less concerned with the minutiae of what goes on in the public press than David Cameron’s, the contention that she is indecisive was a source of frustration.

There is an element of truth in the claim that May still views the world through a “Home Office lens”. One senior minister complains that Downing Street considers the Ministry of Justice as a “rogue outpost” of May’s old stomping ground, rather than a fully fledged department with its own interests and perspectives.

Yet even the most authoritarian of home secretaries would struggle to secure a conviction against May on the charge of opacity as far as her Brexit approach is concerned. She has hit the same grace notes with the reliability of a professional musician: Brexit means freedom from the jurisdiction of the European Court of Justice and control over Britain’s borders, two objectives that can only be achieved as a result of Britain’s exit not only from the EU but also the single market. This was confirmed on 17 January in the Prime Minister’s Lancaster House speech in London.

David Cameron used to say that he would never have “a people”. Certainly, there is no Cameroon tendency in the country at large to match the generation of council house residents that became homeowners and lifelong Conservatives because of Margaret Thatcher and Right to Buy. However, there is, unquestionably, a Cameroon people or faction to be found at almost every rung of London’s financial services sector or at editorial meetings of the Economist, though it as at the Times and the Sun where the treatment of May is at its most noticably rougher than in the Cameron era. 

Michael Gove, her old rival, is not only employed as a columnist by the Times; he enjoys the confidence and admiration of Rupert Murdoch. That the Times secured the first British interview with Donald Trump was a coup for Murdoch, an old associate of the president-elect, and for Gove, who conducted it. It left May in the unlovely position of making history as the first prime minister to be scooped to a first meeting with a new American president by a sitting MP in modern times. It also attested to a source of frustration among May’s allies that she is, for all her undoubted popularity, still ignored or doubted by much of the right-wing establishment.

That condescension partly explains why her words are often listened to briefly, acted on hastily and swiftly forgotten, hence the pound’s cycle of falling when she makes an intervention on Brexit and rising shortly thereafter. The Lancaster House speech was designed to break this pattern. Downing Street briefed the most potent paragraphs at the weekend so that the markets could absorb what she would say before she said it.

As a result, the pound rallied as May delivered her speech, which contained a commitment to a transitional deal that would come into effect after Britain has left the EU. Some financiers believe this arrangement could become permanent, which once again demonstrates how much they underestimate May’s ability to enforce her will.

Being underestimated by Cameron’s people, in Westminster and the City, has the unintended effect of shoring up Theresa May’s position. A prolonged and sustained bout of panic would increase the pressure for a soft landing, but its absence makes it harder for Labour to oppose her effectively, although it has largely acquiesced to the Tory plan for Brexit, at least as far as membership of the single market is concerned. 

Yet for all the plaudits that the Prime Minister’s Lancaster House speech attracted, for all her undoubted popularity in the country, she is in the anomalous position of being a Conservative Prime Minister who has priorities on the European stage other than the preservation of the City of London and to whom Rupert Murdoch is not a natural ally.

As such, she may find that her deadlier enemies come from the right.

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.