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11 March 2015

Steve Reed: “The biggest ideas are coming out of local government“

What's Labour for when there's no money to spend? The same thing it always is, says Steve Reed: giving people power.

By Stephen Bush

If Labour do make it into government, what will that look like? For the only the second time in the party’s postwar history, it won’t be able to usher in a period of increased public spending, like it did in the 1940s, 1960s and 1990s. 

As in the 1970s, money will be scarce. The party’s brief will be to deliver what Chuka Umunna describes as “social democracy in a cold climate”.

But it won’t be entirely unfamiliar territory. In local government, the party is already grappling with many of the same problems.  Local council leaders have faced year after year of cutbacks, left wondering how to do more with less. The challenges of Labour town halls could become that of Labour’s Whitehall.

One politician who has already made the journey from local government to the frontbenches is Steve Reed, council leader in Lambeth until 2012 and now a shadow minister and MP for Croydon North.

“In the 1980s, local government was a drag on the party’s fortunes,” Reed tells me, “Now some of the biggest ideas are coming from local government.”

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Reed took office in 2006; a year before the financial crisis, but Lambeth had plenty of its own problems. On a disastrous night for Labour, Reed and his team managed to take back control of the council. But the result was only partly a result of their work and largely because the Liberal Democrat-Conservative coalition that preceded them was shambolic and unpopular.

“But,” Reed recalls, “there was one very bright light: the Blenheim Gardens estate”. The estate, for many years “a place people wanted to get out of”, had become a tenant-managed estate.

“If the managers didn’t do what the tenants wanted, they could get sacked,” Reed explains. He smiles. “And suddenly, that improved services.”

It was an epiphany. “What I noticed as council leader,” he says, “is that those services that people were happiest with were the services that people had a lot more control over.”

“There is always a problem in any organization that seeks to serve customers,” he continues, “That over time it will grow to become protective of its own interests. That happens in the private sector, the third sector, and it happens in the public sector too.”

In an ideal world, he explains, people would be able to choose between a whole range of public services, but “you can’t provide [that]…because it’s wasteful for resources, we don’t have enough resources to provide all the things that we want, let alone different versions of the things that we want”.

So how do you solve the problem of improving public services? The answer, he tells me, “is to give people who use public services power”.

In Whitehall, he says, warming to his theme – Reed, like the rest of the frontbench, is now meeting with the Civil Service to prepare for a potential handover of power – people are still wedded to the idea that you “pull a lever, and change happens”. “But that’s simply not how it works!”

The devolution agenda – what Ed Miliband dubbed “people-powered public services” – Reed believes allows Labour a way out of simply offering “more of what the Tories are doing, but a bit kinder”.

It also, Reed believes, can protect the public sector from the experience that first inspired him to become involved in politics. Growing up in Watford, his entire family worked in one factory: Oddhams.

“That’s where I always thought I was destined to wrok as well.” He pauses. “But in the mid-1980s, Robert Maxwell took over that factory and closed it down.”

“A combination of poor management and unresponsive unions kept in pickled in aspic until it was so inefficient that it was killed off.”

“And you know what?” he adds, “You can’t pickle public services in aspic. You have to be able to adapt to changing circumstances. There are a huge currents of change sweeping the world. You have parties like Ukip saying: batten down the hatches and resist all change.”

“But I think,” he concludes, “is that we can harness the creativity and innovation of people, so that we benefit, rather than being swept aside, by change.”