Osborne's cuts will cost Britain in the long run

Through his narrow focus on making the books add up now, the Chancellor is piling up social costs for the future.

George Osborne today set out the grim departmental spending settlement for 2015-16: the year after the next general election and so, in some ways, no more than a starting point for whoever wins. Yet it is a critical baseline: whatever its political colour, if the government of the day wishes to deviate from these plans they will either need to set out how they will reallocate cuts between departments, or how they will replace these cuts by either increasing taxes or increasing borrowing. It is also likely, then, to mark a turning point in the framing of the political debate about austerity.

Unless there has been no or very little pick up in the economy by 2015, (in which case the economy is in much more serious trouble than many think) it looks increasingly likely that Labour will go into the general election with a 1997-style type pledge to match Conservative spending plans, at least on current spending. Even if that isn’t the position, all of the parties are signed up to medium-term fiscal consolidation. As the debate moves away from the here and now, and towards what happens after the next election, "too far, too fast" will become increasingly irrelevant.

This is why Miliband and Balls have shifted the debate away from the pace of deficit reduction towards starting to set out how Labour might seek to make savings. The debate is not so much about the size of the state but about how fiscal consolidation is to be achieved. There are some major flaws in the way Osborne is cutting and the centre-left should be highlighting these while still emphasising the need for medium-term cuts.

A smart corporate looking to take almost a fifth of its cost base out over an eight-year period would probably start with three principles. First, it would look right across its activities and investments to take a comparative view of what adds most value to its business, and would start by taking out the lowest-value expenditure. Second, it would take a long-term view spanning decades not months: ensuring cuts made today would not create higher costs over a ten or twenty year period. Last, it would have its best and smartest minds focused on the significant task at hand: it certainly wouldn’t be letting its top performers go, or distract its board and mid-level management with big restructures or expansion into new markets.

Osborne’s approach couldn’t be further from this sort of strategy. First, the government is not looking at what it does in the round, taking a comparative view of the value of its activities. Thus it is ring-fencing universal pensioner benefits, such as the Winter Fuel Allowance and free bus passes, some of which are paid to older people with an income far in excess of average earnings in retirement, while cutting working-age benefits and services for young people. Four out of five pounds of every welfare cut are hitting families in work, for example through cuts to childcare tax credits. Despite historically high levels of long-term youth unemployment, the Future Jobs Fund and the Education Maintenance Allowance have also been cut. The cumulative result of Osborne’s decisions, from his first emergency Budget up until today, is a big redistribution from the young to the old, further consolidating the intergenerational transfer that’s happened via the housing price bubble and shifts in pension provision away from defined benefit towards defined contriubution.

Second, Osborne is taking a short-term view, pursuing cuts that may make the books add up that year but which risk creating big long-term costs for the state. The short-sightedness of his decision to cut the Future Jobs Fund, proven to work in reducing youth unemployment, is a perfect example: the long-term costs of youth unemployment through the 'scarring' impact it has on a young person’s lifetime employment opportunities are well-established. But there are many others. Cutbacks to the early years services offered in children’s centres risk manifesting themselves in higher costs later on, for example through poorer school results and employment outcomes for the young children who no longer benefit from them. The government has forecast its increased tuition fees will save money based on some highly optimistic predictions about the rate at which graduates will pay back loans: the Higher Education Policy Institute have said the new system could actually end up costing more than the old system, despite a £9,000 a year price tag on most degrees. Some decisions will end up costing more in the even shorter term. The bedroom tax is forcing local authorities to move those who cannot afford it to more expensive bed and breakfast accommodation when there are no smaller homes available. Social care cuts simply shift the load over to the NHS as hospitals are forced to keep older people on wards longer than necessary because of a lack of community care, an even more expensive solution.

Osborne would claim that in the case of social care and children’s centres, it is local authorities choosing to make these cuts in light of their reduced settlement, not him. But if Whitehall were taking the long view it would be incentivising local government to think longer-term, for example by enacting a settlement that allows councils that do achieve long-term savings to keep a proportion to reinvest.

Last, the government certainly does not seem to be creating space for its brightest and best minds to focus on the challenge in hand without distraction. Cutting headcounts is an inevitable part of any austerity programme. But this has not been used as an opportunity to performance-manage out the poor performers. Instead, in many Whitehall departments, the best staff have taken voluntary redundancy packages and left. And the government’s misguided public service reform programme is absorbing huge amounts of energy at a time when morale is low. The NHS faces its tightest spending settlement since the Second World War: demographic pressures and social care cuts mean the ring-fence will feel very much like a cut. Yet health commissioners are focused not on the challenge at hand but on a massive structural reorganisation with no clear rationale as to why this will improve the quality of healthcare. In education, primary schools in several local authorities are being forced to become academies, getting grants of tens of thousands of pounds from central government to figure out how to recreate back-office and school improvement economies of scale. Ofsted has said this risks distracting school leaders from their core mission of improving standards at a time when cuts to children’s services are loading more onto schools.

The centre-left cannot make these sorts of critiques without saying more about how it would be cutting differently. Yet by setting out what he would do were he still Chancellor in 2015, Osborne is effectively forcing Labour onto this territory. Miliband and Balls made a good start a couple of weeks ago in making it clear universal pensioner benefits are no longer sacrosanct in light of what that means for support for young people and working families, and insetting out how a Labour government would seek to bring down the medium-term cost of social security by investing upfront in house building and encouraging businesses to pay the living wage. Eventually though, and before the next general election, Labour will need to say exactly how their plans would differ from Osborne’s; with the assumption that unless they set out more tax rises or accept higher levels of borrowing to pay for current spending, they will need to accept his cuts unless they are reapportioned elsewhere. This is what Ed Miliband signalled is to come in a recent speech: it will represent a marked shift in the tone of the political debate.

Sonia Sodha is a former policy adviser to Ed Miliband and writes in a personal capacity

George Osborne and Danny Alexander leave the Treasury for the House of Commons before the Spending Review. Photograph: Getty Images.

Sonia Sodha is head of policy and strategy at the Social Research Unit and a former senior policy adviser to Ed Miliband. She tweets @soniasodha.

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This Ada Lovelace Day, let’s celebrate women in tech while confronting its sexist culture

In an industry where men hold most of the jobs and write most of the code, celebrating women's contributions on one day a year isn't enough. 

Ada Lovelace wrote the world’s first computer program. In the 1840s Charles Babbage, now known as the “father of the computer”, designed (though never built) the “Analytical Engine”, a machine which could accurately and reproducibly calculate the answers to maths problems. While translating an article by an Italian mathematician about the machine, Lovelace included a written algorithm for which would allow the engine to calculate a sequence of Bernoulli numbers.

Around 170 years later, Whitney Wolfe, one of the founders of dating app Tinder, was allegedly forced to resign from the company. According to a lawsuit she later filed against the app and its parent company, she had her co-founder title removed because, the male founders argued, it would look “slutty”, and because “Facebook and Snapchat don’t have girl founders. It just makes it look like Tinder was some accident". (They settled out of court.)

Today, 13 October, is Ada Lovelace day – an international celebration of inspirational women in science, technology, engineering and mathematics (STEM). It’s lucky we have this day of remembrance, because, as Wolfe’s story demonstrates, we also spend a lot of time forgetting and sidelining women in tech. In the wash of pale male founders of the tech giants that rule the industry,we don't often think about the women that shaped its foundations: Judith Estrin, one of the designers of TCP/IP, for example, or Radia Perlman, inventor of the spanning-tree protocol. Both inventions sound complicated, and they are – they’re some of the vital building blocks that allow the internet to function. 

And yet David Streitfield, a Pulitzer-prize winning journalist, someow felt it accurate to write in 2012: “Men invented the internet. And not just any men. Men with pocket protectors. Men who idolised Mr Spock and cried when Steve Jobs died.”

Perhaps we forget about tech's founding women because the needle has swung so far into the other direction. A huge proportion – perhaps even 90 per cent - of the world’s code is written by men. At Google, women fill 17 per cent of technical roles. At Facebook, 15 per cent. Over 90 per cent of the code respositories on Github, an online service used throughout the industry, are owned by men. Yet it's also hard to believe that this erasure of women's role in tech is completely accidental. As Elissa Shevinsky writes in the introduction to a collection of essays on gender in tech, Lean Out: “This myth of the nerdy male founder has been perpetuated by men who found this story favourable."

Does it matter? It’s hard to believe that it doesn’t. Our society is increasingly defined and delineated by code and the things it builds. Small slip-ups, like the lack of a period tracker on the original Apple Watch, or fitness trackers too big for some women’s wrists, gesture to the fact that these technologies are built by male-dominated teams, for a male audience.

In Lean Out, one essay written by a Twitter-based “start-up dinosaur” (don’t ask) explains how dangerous it is to allow one small segment of society to built the future for the rest of us:

If you let someone else build tomorrow, tomorrow will belong to someone else. They will build a better tomorrow for everyone like them… For tomorrow to be for everyone, everyone needs to be the one [sic] that build it.

So where did all the women go? How did we get from a rash of female inventors to a situation where the major female presence at an Apple iPhone launch is a model’s face projected onto a screen and photoshopped into a smile by a male demonstrator? 

Photo: Apple.

The toxic culture of many tech workplaces could be a cause or an effect of the lack of women in the industry, but it certainly can’t make make it easy to stay. Behaviours range from the ignorant - Martha Lane-Fox, founder of, often asked “what happens if you get pregnant?” at investors' meetings - to the much more sinister. An essay in Lean Out by Katy Levinson details her experiences of sexual harassment while working in tech: 

I have had interviewers attempt to solicit sexual favors from me mid-interview and discuss in significant detail precisely what they would like to do. All of these things have happened either in Silicon Valley working in tech, in an educational institution to get me there, or in a technical internship.

Others featured in the book joined in with the low-level sexism and racism  of their male colleagues in order to "fit in" and deflect negative attention. Erica Joy writes that while working in IT at the University of Alaska as the only woman (and only black person) on her team, she laughed at colleagues' "terribly racist and sexist jokes" and "co-opted their negative attitudes”. 

The casual culture and allegedly meritocratic hierarchies of tech companies may actually be encouraging this discriminatory atmosphere. HR and the strict reporting procedures of large corporates at least give those suffering from discrimination a place to go. A casual office environment can discourage reporting or calling out prejudiced humour or remarks. Brook Shelley, a woman who transitioned while working in tech, notes: "No one wants to be the office mother". So instead, you join in and hope for the best. 

And, of course, there's no reason why people working in tech would have fewer issues with discrimination than those in other industries. A childhood spent as a "nerd" can also spawn its own brand of misogyny - Katherine Cross writes in Lean Out that “to many of these men [working in these fields] is all too easy to subconciously confound women who say ‘this is sexist’ with the young girls who said… ‘You’re gross and a creep and I’ll never date you'". During GamerGate, Anita Sarkeesian was often called a "prom queen" by trolls. 

When I spoke to Alexa Clay, entrepreneur and co-author of the Misfit Economy, she confirmed that there's a strange, low-lurking sexism in the start-up economy: “They have all very open and free, but underneath it there's still something really patriarchal.” Start-ups, after all, are a culture which celebrates risk-taking, something which women are societally discouraged from doing. As Clay says, 

“Men are allowed to fail in tech. You have these young guys who these old guys adopt and mentor. If his app doesn’t work, the mentor just shrugs it off. I would not be able ot get away with that, and I think women and minorities aren't allowed to take the same amount of risks, particularly in these communities. If you fail, no one's saying that's fine.

The conclusion of Lean Out, and of women in tech I have spoken to, isn’t that more women, over time, will enter these industries and seamlessly integrate – it’s that tech culture needs to change, or its lack of diversity will become even more severe. Shevinsky writes:

The reason why we don't have more women in tech is not because of a lack of STEM education. It's because too many high profile and influential individuals and subcultures within the tech industry have ignored or outright mistreated women applicants and employees. To be succinct—the problem isn't women, it's tech culture.

Software engineer Kate Heddleston has a wonderful and chilling metaphor about the way we treat women in STEM. Women are, she writes, the “canary in the coal mine”. If one dies, surely you should take that as a sign that the mine is uninhabitable – that there’s something toxic in the air. “Instead, the industry is looking at the canary, wondering why it can’t breathe, saying ‘Lean in, canary, lean in!’. When one canary dies they get a new one because getting more canaries is how you fix the lack of canaries, right? Except the problem is that there isn't enough oxygen in the coal mine, not that there are too few canaries.” We need more women in STEM, and, I’d argue, in tech in particular, but we need to make sure the air is breatheable first. 

Barbara Speed is a technology and digital culture writer at the New Statesman and a staff writer at CityMetric.