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Labour must be radical on public service reform

Rethinking public services can rebuild trust in the state – and rebalance our economy.

By Jessica Studdert

It’s hard to be optimistic about the future of our public services these days. NHS waiting lists and thresholds for support are rising. While workforce numbers are going up, Covid backlogs, poorer health outcomes, demographic changes and the social care crisis are piling more pressures on staff. And the fiscal outlook promises little relief.

In this fraught context, ahead of the most competitive election in a generation, Labour must now craft a serious governing agenda on public services. Mitigation and fire-fighting are not options for a party that has always seen public services which support health, care, education and families as vital to its social justice mission. 

The most obvious consequence of austerity having dominated public service policy for over a decade is the sheer level of pressure within the fragile system. This has also created a zero-sum national debate over whether to cut or to invest in the public sector.

More funding is certainly needed for cash-starved services that are running just to stand still in the face of inflationary cost pressures, on top of pared-back funding. Yet this simplistic “less vs more” debate has overshadowed very real demographic and socio-economic shifts that have changed the context in which public services operate. The pressures of rising demand are caused by wider trends like our ageing population and deepening inequality.

It won’t be enough to simply boost spending to keep pace with demand, whether or not the fiscal flexibility to do this will exist in the next parliament. The demand side of the equation also needs to be addressed. This means that public services can’t simply keep doing more of the same. Established in silos, public services are only capable of reacting to elements of a problem, not focusing on the root causes. As acute pressures mount, the system needs to adapt to not only meet people’s needs, but intervene earlier to prevent small issues escalating.

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The roots of a new approach are already apparent. Gordon Brown’s Commission on the UK’s Future set out an agenda of economic devolution and constitutional reform. Its analysis is clear that our uniquely over-centralised state is directly linked to our structural geographic inequality. Public service reform was beyond the commission’s remit, but a logical next step would be to extend this vision of renewal and empowerment from the ground up to our system of social support – the other side of the coin to economic development.

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Promising practices are already being pioneered, sharing the features of services building very different relationships with communities that recognise their own insights, often leading to better outcomes. When cuts were first implemented under the Cameron government, Wigan Council invested in community capacity and training the council workforce to have different conversations with residents focused on their own capabilities rather than treating them as a case to be solved. Evidence shows an increase in healthy life expectancy over the decade the approach was embedded, bucking the national trend.   

In the field of health, some GPs such as a group of practices in Fleetwood, Lancashire, have re-thought their roles beyond sitting in their surgeries coping with ever-increasing demand. A significant proportion of appointments had roots in social isolation or lack of confidence, rather than illnesses requiring clinical treatment. Now these GPs are working very differently to help community groups and networks flourish, with a focus on developing connections and mutual support. A common by-product of this approach is improved well-being, with positive consequences for people’s health.

These approaches don’t just bring about better outcomes. They enable communities to shape the support that would help them thrive. They also provide more impact for public investment and can demonstrate reductions in demand for more expensive acute provision, like in-hospital treatment.

The challenge now is how to reform the system so that new ways of working become the norm, rather than the exception. This would mean looking not just at the total overall funding but the way it is allocated, with longer-term funding settlements aligned across public services so they can work locally to develop joint investment plans.

Brown’s focus on devolution is relevant here, too. Big domestic spending departments in health, education and welfare should devolve budgets held nationally to local partners. They can then use data and insights from their area to better plan provision to meet identified needs. A few national requirements related to outcome improvements and community rights would also serve to shape the services.

This won’t all be prominent in the 2024 Labour manifesto – much of it relates to the financial and regulatory wiring behind our public services – but there is a growing sense that many people feel “the system” isn’t working for them, with the most deprived communities often the most powerless and buffeted by state bureaucracy. So public service reform, which at heart catalyses a very different relationship between people and professionals, holds the prospect of rebuilding trust in our state institutions and creating a more dynamic system. Such a system would be capable of confronting the complex social challenges of the 2020s and beyond.

[See also: Whatever happened to the Conservatives’ “war on cancer”?]