Ed Miliband speaks at the Labour conference in Brighton last year. Photograph: Getty Images.
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Labour must challenge the myths about decentralisation

Far from creating a postcode lottery, greater localism can lead to lower levels of regional inequality.

When Ed Miliband set out his vision for people-powered services, he was clear that the centralised state cannot diagnose and solve every local problem. Genuine power cannot be transferred to service users if decision-making is hoarded in Whitehall. Jon Cruddas reinforced this when he set out the importance of devolving power to delivering Labour’s ambitions of a more equal and inclusive society.  

This reflects Labour's  defining mission to tackle inequality. The Local Government Innovation Taskforce’s First Report: The case for change, now sets out the underlying case for such a power shift – and why inequality and decentralisation are inherently linked.

The election in 2015 will be an important juncture for our public services – the course pursued after this point will determine whether they can play an effective role in the future in overturning the social determination of poor life chances. The twin pressures of rising demand and shrinking resources are forcing a choice. Either to continue, as this government has largely pursued, the course of salami-slicing Whitehall budgets, squeezing separate services and tinkering around the edges of traditional modes of delivery. This will lead to the decline, retrenchment and residualisation of public services with ever-higher thresholds for use and the termination of some altogether.

The danger is so immediate that this status quo has now become riskier than the second option: fundamental reform. The Taskforce’s report sets out the foundations for how this can be achieved through a new strategy that organises services around places, rather than within departmental silos from the centre replicated in communities. This is based on evidence of what is working already – where innovations are being driven against the flawed logic of a system which constrains the ability of services to adapt to the challenges they are confronted with.

By providing services that are more anchored to local conditions, designed around people’s actual, not perceived needs, they can be more effective. By better enabling services to collaborate and cooperate beyond institutional boundaries they can be more efficient and drive out duplication. And by taking a whole system approach across all services in an area, early intervention can be built in with incentives between services aligned to secure the cashable savings that are required for proper shift away from high cost reaction and towards prevention.

But to realise this strategy will involve dispelling some myths that are often propagated about decentralisation.

Firstly, that it will lead to a postcode lottery in provision. While we must recognise existing variations in a centralised system, our evidence cites international comparators which show higher levels of decentralisation can lead to lower levels of regional inequality. This, combined with evidence that the potential of our big cities outside London is held back by centralisation, would strongly suggest that to achieve greater fairness overall we should pursue decentralisation with determination, as an effective route to social justice.

Secondly, that local structures are not up to the job. Local councils can be prone to weaknesses in a system that largely concentrates power and resource at the centre. Yet failures at the centre occur frequently – the Work Programme and Universal Credit are two examples of centrally managed programmes that are struggling to cope. But when the centre fails this is seen as particular, rather than a reflection of its systemic inability to deal effectively with complexity at scale. Given that all levels of public administration are prone to strengths and weaknesses, a more objective strategy would be based on understanding what level of governance is appropriate for maximising the impact of interventions.

Thirdly, that by decentralising, a Labour government wouldn’t be able to deliver on its agenda everywhere in the country. On the contrary, our approach to a new settlement between the centre and local areas would be based on a clear set of national entitlements as the basis of a devolved approach to ensure people and places are directly empowered as a result. Given that the old levers of a centralised state have reached the limits of their efficacy, a more decentralised statecraft is now a more realistic means of achieving change: in a complex world distance is a hindrance.

The challenge will be to create a reformed approach which enables innovation that can quickly develop, spread and embed – driving success, rather than enshrining aversion to failure. In this way, we can create new routes to meeting the demand pressures and over time seek a sustainable system-shift towards prevention, and ensure a system in which no individual or community is held back from fulfilling their potential. This will be the ultimate test for people-powered services.

Sir Richard Leese is Co-Chair of the Local Government Innovation Taskforce and Leader of Manchester City Council.

The Taskforce’s First Report: The case for change is available here. Their final report is due later this year. 

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There's nothing Luddite about banning zero-hours contracts

The TUC general secretary responds to the Taylor Review. 

Unions have been criticised over the past week for our lukewarm response to the Taylor Review. According to the report’s author we were wrong to expect “quick fixes”, when “gradual change” is the order of the day. “Why aren’t you celebrating the new ‘flexibility’ the gig economy has unleashed?” others have complained.

Our response to these arguments is clear. Unions are not Luddites, and we recognise that the world of work is changing. But to understand these changes, we need to recognise that we’ve seen shifts in the balance of power in the workplace that go well beyond the replacement of a paper schedule with an app.

Years of attacks on trade unions have reduced workers’ bargaining power. This is key to understanding today’s world of work. Economic theory says that the near full employment rates should enable workers to ask for higher pay – but we’re still in the middle of the longest pay squeeze for 150 years.

And while fears of mass unemployment didn’t materialise after the economic crisis, we saw working people increasingly forced to accept jobs with less security, be it zero-hours contracts, agency work, or low-paid self-employment.

The key test for us is not whether new laws respond to new technology. It’s whether they harness it to make the world of work better, and give working people the confidence they need to negotiate better rights.

Don’t get me wrong. Matthew Taylor’s review is not without merit. We support his call for the abolishment of the Swedish Derogation – a loophole that has allowed employers to get away with paying agency workers less, even when they are doing the same job as their permanent colleagues.

Guaranteeing all workers the right to sick pay would make a real difference, as would asking employers to pay a higher rate for non-contracted hours. Payment for when shifts are cancelled at the last minute, as is now increasingly the case in the United States, was a key ask in our submission to the review.

But where the report falls short is not taking power seriously. 

The proposed new "dependent contractor status" carries real risks of downgrading people’s ability to receive a fair day’s pay for a fair day’s work. Here new technology isn’t creating new risks – it’s exacerbating old ones that we have fought to eradicate.

It’s no surprise that we are nervous about the return of "piece rates" or payment for tasks completed, rather than hours worked. Our experience of these has been in sectors like contract cleaning and hotels, where they’re used to set unreasonable targets, and drive down pay. Forgive us for being sceptical about Uber’s record of following the letter of the law.

Taylor’s proposals on zero-hours contracts also miss the point. Those on zero hours contracts – working in low paid sectors like hospitality, caring, and retail - are dependent on their boss for the hours they need to pay their bills. A "right to request" guaranteed hours from an exploitative boss is no right at all for many workers. Those in insecure jobs are in constant fear of having their hours cut if they speak up at work. Will the "right to request" really change this?

Tilting the balance of power back towards workers is what the trade union movement exists for. But it’s also vital to delivering the better productivity and growth Britain so sorely needs.

There is plenty of evidence from across the UK and the wider world that workplaces with good terms and conditions, pay and worker voice are more productive. That’s why the OECD (hardly a left-wing mouth piece) has called for a new debate about how collective bargaining can deliver more equality, more inclusion and better jobs all round.

We know as a union movement that we have to up our game. And part of that thinking must include how trade unions can take advantage of new technologies to organise workers.

We are ready for this challenge. Our role isn’t to stop changes in technology. It’s to make sure technology is used to make working people’s lives better, and to make sure any gains are fairly shared.

Frances O'Grady is the General Secretary of the TUC.