Blast from the Past

The countdown to redundancy for everyone left in my office now stands at 8 working days. Accordingly, desks are being cleared out and many things unearthed. I have, for instance, found a copy of the FT from April 26th 2010 with an article about 'The Demolition Job that Awaits the Next Government'. With hindsight, it is rather striking.



Apologies for the poor quality cameraphone photo. The main point of the editorial on the left is that £37 billion of savings will need to be found from the public sector in order for the deficit to be halved by 2014. It is noted below the pie chart that all three political parties have failed to identify anything like that level of cuts in their announcements to date. Incredibly, of the three it was the Conservative party that had at that time announced the smallest level of cuts. £7 billion a year, to be precise.

The FT's modest proposals for cuts were as follows:

• Axe two aircraft carriers, which has not occurred.
  
  
• Reduce prison numbers by 25%, which has has not occurred, although Ian Duncan-Smith did entertain thoughts in this direction. Then came the wrath of the Daily Mail, and the riots. Thus the prison population has reached a record high.
  
  
• 5% cut in public sector pay for a year, which has not occurred, as the FT high-handed assumed that central government could just do this whenever they wanted. Which wouldn't be very localist, frankly. Public sector pay has been frozen, though, and with inflation running at 4.5%, that amounts to a cut in real terms. Moreover, there are now 240,000 fewer jobs in the public sector than there were last year.
  
  
• Means test child benefit, which is in progress.
  
  
• Scrap winter fuel payments and free TV licenses. Wow, the FT really cares about the elderly. This hasn't happened and there are no plans to do it. This government is far keener on withdrawing support from the young.
  
  
• Halve spending on NHS dentistry. Here is a rich irony for you, as this is presumably predictated on NHS dentistry being inefficient. It is one of the areas of the NHS run on more competitive, private sector lines. The government is now planning to bring that same ethos to the entire NHS in the health and welfare reform bill. Will the result be cost savings, chaos, worse health outcomes, or none of the above? Who knows - certainly not the government.
  
  
• Stop primary and secondary school building for three years. There is more irony to be found here. Building Schools for the Future was scrapped, and Local Authority budgets cut so that any new schools would need to be developer funded. However, the Free Schools policy will mean more schools coming into being. Is money being saved overall? The Department for Education took a smallish budget cut over the spending review period, so presumably that's the idea.
  
  
• Halve spending on Teaching Assistant salaries. Again, the FT is getting a bit high-handed if it thinks central government can just reach down into schools and fire half of their TAs. That said, many such jobs are probably looking less secure as schools look to absorb funding cuts.
  
  
• Cut funding to Scotland, Wales, and Northern Island by 10%. The government went for 7% overall.
  
  
• Halve spending on road maintenance and upgrades. This takes in two sets of cuts; to the Department for Transport (which is responsible for trunk roads) and to upper-tier local councils (which are responsible for local roads). The former took a 12.6% cut, the latter about 26% cut. A number of planned major motorway upgrades have been ditched and many local authorities have cut their pothole budgets. Whether this amounts to halving spending is hard to tell.
  
  
• Delay Crossrail for at least three years. This has not happened; Boris managed to save Crossrail from the axe.
  
  
• Withdraw concessionary fares for pensioners. The FT does seem to have something against the elderly. This has not happened and is unlikely to.

Abolishing the Child Trust Fund and Education Maintenance Allowance were also mentioned in the article - both of which are happening.

That amounted to £37.4 billion cuts over four years. In the Comprehensive Spending Review the government announced £83 billion cuts over four years, more than twice as many. Quoth the FT on April 26th 2010:

Spending cuts on the scale outlined in the Financial Times' analysis appear too politically risky to contemplate

Excuse me while I laugh bitterly. The FT proposed instead to raise income tax and VAT. The coalition have done the latter, but also cut or frozen the budgets of all government departments. Significantly, they have laid particularly hard into the welfare state, which the FT treated as sacrosanct.

What a change in just over a year. I suspect that the 'political risk' the FT mention was simply steamrollered by shock and awe tactics. The public sector must be cut immediately or the country will run out of money and citizens will have to start eating one another! (Only a slight exaggeration of the Spending Review rhetoric.) I think the FT underestimated people's apathy and lack of awareness of what the public sector does. Few protest when told that a government department's funding is being cut by 20%; it just seems like a number. When that means a fall in income or the closure of a local service, complaints start. By then, it is probably too late.

Stormy Weather

I have a confession to make: I can't bring myself to read the Open Public Services White Paper. Whenever I try and steel myself to pick it up, all I can think of is David Cameron tearing the social contract into tiny pieces whilst laughing maniacally. That is not a pleasant mental image.

Instead, I've read Vince Cable's 2009 book about the credit crunch, titled 'The Storm'. He wrote it in haste to try and explain the causes of the financial downturn, back when the idea of Liberal Democrats in the cabinet would have provoked disbelieving laughter. Reading it with the benefit of hindsight is very interesting.

When I borrowed this book from the library, I thought it would display the vast extent of Cable's hypocrisy once he become a government minister. I was surprised to find that some of his 2009 viewpoints accord quite closely with the coalition's stated programme. The book articulates Liberal Democrat ideology much more clearly than any of their election campaigning ever did. Cable's view is liberal in the old-fashioned sense of the word; pro-markets and anti-state in principle, but agreeing that there is need for a strong legal, regulatory, and fiscal policy basis for markets to operate within. Superficially, this agenda seems to differ from the Conservative Party (who dispute the need for a strong legal, regulatory, and fiscal policy basis, painting it all as red tape) and the Labour Party (who are more pro-state, insofar as they actually invested in public services). That's a vast oversimplification, which credits UK political parties with an ideological coherence that they don't have, but it does point to a certain sympathy between Conservative and Liberal policies. Labour at least pretended to put people before markets.

Cable clearly articulates the need for reduced UK public spending to get rid of the so-called structural deficit (a disputed term, I should add). This is now the coalition's favourite soundbite. He also emphasises the need for stronger regulation of banking. The current government have talked about this at some length; their actions have conspicuously failed to live up to their words. Remember Project Merlin and how banks continue to ignore it? Remember when banks were allowed to pay unlimited bonuses? I don't think that this was what Cable had in mind in 2009. That said, his concern was the need for multilateral reform, given the international nature of the crisis. He has been making the right noises, just without supporting action.

There is a seemingly minor but critical distinction to be made between Conservative and Liberal Democrat economic policy: in his book Cable proposes public sector cuts once stimulus has got the private sector growing; Osbourne's approach is predicated on cuts to the public sector acting as the stimulus. The former nuance has clearly been subsumed under the great coalition carnival of cuts. As I've said many times before, I doubt such sudden and deep cuts will turn out well for anyone, least of all the most vulnerable in society, the economy, and the Liberal Democrats as a political party.

'The Storm' makes it clear that unbalanced housing policy contributed significantly to the economic crisis. Cable notes that the hysterical pursuit of home ownership (influenced by political, financial, and media hype) brought about a destructive house price bubble. To avoid it happening again, a more-balanced housing market with greater proportions of social and private rented property is needed. That is definitely not what the present Housing Minister and his ministry are working towards. Interestingly, Cable suggests that a period of deflation could help to prevent a second property bubble. In 2009, this was a real possibility and deflation did actually occur (if you go by RPI). These days, inflation is above 4% and being driven by food and fuel prices rises over which the government has very little control. Both markets are dominated by cartel behaviour and global in nature, as other chapters helpfully explain.

This book is definitely at its best when looking at the global picture; the rise of China and India as economic powers, the perversity of richer countries borrowing heavily from poorer, and trends in energy and food markets are all summarised neatly. I strongly take issue with the relegation of climate change to an afterthought, though. Nonetheless, 'The Storm' is well worth reading and covers a lot of ground within 157 pages. Ultimately, though, it is fatalistic. The UK is waning as economic power, many contributory factors to the downturn remain beyond UK policy control, and even if we get our domestic policy in order recovery will remain difficult.

Cable sensibly doesn't try and predict the future; he didn't foresee the alarming prospect of Greece, Ireland, Italy, and the US threatening to default on their debts, for instance. Rather, he presents a frankly depressing vision of where things were in 2009 and the main problems that needed to be addressed. It's now 2011 and those problems remain unfixed; rebalancing the housing market, investing in education and research to strengthen the economy, economic rebalancing away from financial services, and promoting fairness by using the tax system to reduce inequality. I haven't seen evidence of the coalition government making progress with any of that, despite frequent name-checking of the latter two aims.

I still think that Vince Cable has acted hypocritically and consider his callous attitude to Southern Cross unforgivable. However all politicians (indeed all humans) are hypocrites sometimes and working in a coalition inevitably requires compromise. The astute analysis in 'The Storm' demonstrates that Cable must realise how ineffective and downright dangerous most of the policies he has to support are likely to be. As the economy stalls, the euro totters, and America seems doomed to be downgraded, I wonder if he thinks such compromise was worth it?

I did find one prediction in the concluding chapter of Cable's book: 'There is a long period of austerity ahead'. It's hard to argue with that.

Keeping Calm and Carrying On

I haven't been posting lately as reiterations of previously expressed outrage would have been tedious to read and depressing to write. Government policies are still counterproductive, the coalition continues to dismantle public services, and the economic case for austerity continues to weaken. The Localism Bill is dragging itself through parliamentary processes, changed little by amendments. A storm of warning and protest about proposed NHS reforms from nearly every observer is largely being ignored by the PM. The only good news, that the Committee on Climate Change's carbon budget recommendation was accepted, shouldn't even be news. It only was because BIS and the Treasury were being reactionary about recommendations that should have been accepted as a matter of course. Moreover, the agreement to cut emissions by 50% will only be meaningful if actually achieved. That will require significant policy intervention, which is not yet forthcoming.

Rather than concentrate on national policy, I've been thinking about personal lessons from the past year.

Five ways to survive in a dying public sector organisation

1. Set aside a time (just after lunch on Friday is good) when everyone in the office can have a thorough bitch-in about the week's developments in government policy and their negative consequences. Sarcastically reading aloud recent CLG press releases will form part of this cathartic exercise. A current example: Pickles to cut red tape that stops the public from flying flags.
   
   (As an aside, I think it striking to compare the number of press releases from CLG about social care and flags. The former concerns the protection of abused children and vulnerable elderly people, arguably most critical task of local councils; the latter are pieces of fabric waving in the breeze. During April and May thus far, six seperate CLG press releases have been about flags. None have been about social care. See for yourself. What does this tell you about the department's priorities?)
   
   
2. Ensure that you have an exit strategy. Easy for me to say now, as I have a Masters place, but this is a huge source of anxiety for my colleagues. We now have less than five months left, and some are I think beginning to panic that come September they might be left adrift. Options being considered within the office, other than simply getting a similar job are: full-time study, setting up a as a self-employed consultant, charity work, and retraining as a teacher. However risky or speculative it might be, some plan for post-redundancy is essential, and ideally it should be something you feel good about. Rather than gloomily watching the organisation wither away around you, try and look on it as an opportunity for change and to move on with your career. Again, it's all very well for me to say that as I don't have kids or a mortgage. Still, the strange period of knowing your job will vanish is an ideal opportunity to consider what you need and want out of life in general, as well as your career.
   
   
3. Avoid regrets. There are a number of projects that I've put a great deal of time and effort into which will very likely be lost once my organisation has gone. I've had to make peace with this, in order to concentrate on the most important projects that really must continue elsewhere. These things need to be put in perspective. None of the reports that I've prepared or the emails I've sent will be of great interest to historians in a hundred years. They did what was needed at the time and provided me with useful experience, but if the paper copies are recycled and the word documents fossilise on a server somewhere, civilisation isn't going to fall. That does not mean that I wasted my time, just that the situation has changed. Regrets are a waste of energy that is better spent planning for the future.
   
   
4. Don't become isolated, either from your immediate colleagues or other organisations. Mutual support in my team is proving a really powerful thing. My colleagues and I are trying to support each other through hard times, and I consider that extremely important. As well as practical help (reading each other's CVs, sharing information about jobs, etc), we keep up with each other's progress, setbacks, and morale, wishing luck with interviews and providing tea for whoever is having a bad day. At times, three people in my team have all gone for the same job, but amazingly this hasn't caused distrust and excessive competitiveness. The atmosphere in the office is genuinely that of all being in this together. Moreover, the whole public sector is going through seismic changes, with redundancies at every organisation I work with. This certainly provides a heartfelt topic of conversation with any public servant I happen to meet.
   
   
5. Create some lunchtime escapism. Yes, it's all very depressing. The government is waging an ideological war on the public sector, there are far more people on the dole than there are job vacancies (the current ratio is five to one), and the future can seem bleak. It's important to avoid reading the news until it makes you cry with rage during your lunchbreak, and instead use the time for distraction. I tend to go for a walk, or read a bit of a book (novels and popular science, no current affairs or economics), or send a long email to a friend, or just talk to colleagues about something totally unrelated to work. Usually involving anecdotes about the wanton destructiveness of their children.

Even if you're not in the lovely situation of impending redundancy from the public sector, you will likely have some financial anxieties. Inflation is up to 4.5% and 42% of households expect to have less money to spend over the next year. You might notice some common themes in my pieces of advice to handle this: firstly, each would also reduce your carbon footprint, and secondly, each would be much easier to follow if you happen to be young, have no children, and live in an urban area. That would be my inherent bias as a twentisomething childless urban dweller, sorry.

Five ways to cope with the Age of Austerity

1. Get rid of your car, as they are a huge financial drag. Petrol prices are volatile and rising, road maintenance budgets are falling. Cycle or walk whenever possible, try not to rely on public transport. Bus and train fares are rising steeply whilst subsidies fall; frequency and reliability are thus deteriorating and will continue to. Given the quantity of sunk costs to car ownership; purchase, insurance, tax, maintenance; ditching the private vehicle rather than trying to use it less will make a much more significant saving. When bus, bike, train, or feet won't do, there are always taxis and car clubs. Moreover, the additional exercise will help with point two...
   
   
2. Stay as healthy as you can. Of course this is always a priority, but even more so when controversial and risky reforms to the NHS loom. During this kind of chaotic period of cuts and reorganisation, patient care is going to suffer, even with the best will in the world. This is not a good time to need a hospital or GP, at the very least you're likely to have to wait longer.
   
   
3. Shop around for food, buy only what you need, and don't waste it. Travelling on foot or by bike also helps with this, as you can't buy more than you can carry. Vegetarianism is cheaper than being a carnivore. Ready meals are an expensive source of calories. Special offers are only worth it if you would have bought the product anyway. Brands and special luxury ranges are generally a ripoff. It feels like I'm stating the massively obvious here, but these things add up and food is something that you can't buy second hand!
   
   
4. Think about your role in the Big Society. The government is radically changing the social contract and you must expect less from public services and more DIY. How would you cope if your local library, leisure centre, job centre, or Sure Start centre halved its opening times or closed altogether? Could you volunteer to help keep such a centre open? Which public services would you particularly notice reductions to? Which approach would make more sense if your preferred service is threatened: campaign against the cut, or volunteer to mitigate the effect? Do you know who your local councillor is, in case you need to put pressure on them?
   
   
5. Always look on the bright side of life. Happiness is threatened by redundancy and economic slump, but not precluded. Living within your means in the UK is likely to provide you with a good standard of living, even if your means are small. A little more frugality with regard to material goods wouldn't be a bad thing in the western world. There is great truth in the old saw that the best things in life are free. To wit, whenever I need cheering up, there are always pictures of baby animals.

More than five reasons why Cambridge is one of the best places to be in these harsh times

1. As it is 5 miles in diameter and flat, travel within Cambridge can effectively be cost-free. The vast majority of drivers expect and respect cyclists. Some roads do involve a measure of modal warfare, but there is usually an alternative and better route to be found. There are some glorious paths alongside the river Cam, as well as various quiet roads which form the cycling superhighways around the city.
   
   
2. Cambridge is highly aesthetically pleasing and has lots of green open spaces that it would be very difficult to start charging for access to. Admiring historic buildings and lazing on Parker's Piece will remain enjoyable, even if the parlous state of local government finances causes the latter to be mown less often.
   
   
3. Given the concentration of people in the city relative to the rest of the county, outlying villages will inevitably suffer the loss of libraries, leisure centres, and other services before the city itself, simply on the basis of usage. The student contingent (approximately 16,000 of the 130,000 total city population) help to keep the arts cinema and numerous lovely independent cafes viable.
   
   
4. Cambridge is a refuge for the left wing. There isn't a single Conservative on the City Council (whereas they run the County Council, a source of obvious political tension). Whereas the UK voted 68% No to AV, Cambridge voted 54% Yes. We also have a young and enthusiastic Lib Dem MP, Julian Huppert. Although I don't agree with everything he says and does, which is much more than anyone could expect from an MP anyway, he clearly has a lot of energy and interest in reflecting Cambridge's interests. I also admire his habit of communicating what he's doing and asking what he should be doing, for example canvassing twitter for questions he should ask in committees and parliament.
   
   
5. Although housing costs are painful and the rental market vicious, living costs in Cambridge are otherwise relatively low; I've already mentioned transport. There are lots of small independent food shops, which allow comparison shopping in a way that supermarkets simply do not. Obviously the city has supermarkets too, but if you hate them as much as I do you can avoid them. I find that fruit and veg are noticably cheaper from the local grocer than big box supermarkets. The charity shops are excellent for high quality second hand clothes and books.
   
   
6. It's a friendly, safe, pleasant environment that combines useful compactness and access to services with open space and a rural feel. My Suffolk-countyside dwelling family think it cosmopolitan, my London-dwelling friends consider me to be out in the sticks. Cambridge contains fields of cows and multiplex cinemas; truly the best of both worlds.

It has been almost exactly a year since the Coalition government came to power in a cloud of smug Eton bonhomie. I've survived the first year of austerity with my job intact, albeit doomed, and my home city relatively unscathed. This time next year, I expect to be an impoverished student and suspect that the cuts will feel a lot sharper. The important things are to keep calm, carry on, and take note of what may turn out to be a significant fact: since the student protests and March for the Alternative the government has completely lost the trust of the police.

FAO Ed Milliband

An especially dispiriting feature of current public life is the combination of low government approval ratings and a lack of credible alternate narrative from the opposition. Labour's dossier on the NHS reforms might be a sign of greater feistiness, but I've yet to notice any real headway on economic matters. The government's economic messages are dominating the media. Their basic framework seems to be:

• The country is dangerously in debt. ("...the whole world is concerned about high deficits, and our economic stability depends on allaying those concerns [...] We will not take Britain back to the brink of bankruptcy [...] the country has run out of money")
  
  
• Labour spent too much. The debt is their fault. ("...we have inherited from the previous Government plans – if you can call them that [...] Not a single penny of savings had been identified [...] The debts we were left threatened every job and public service in the country")
  
  
• Too much was spent on public services and, in particular, welfare. We can't afford to spend so much on these things. ("We have chosen to cut the waste and reform the welfare system that our country can no longer afford...")
  
  
• Therefore public spending must be cut as fast as possible. ("...eliminate the structural deficit by balancing the cyclically-adjusted current budget over five years, by 2015-16. And we set a target of national debt falling as a proportion of national income by that same year [...] for reasons of caution, we will achieve both these objectives a year earlier in 2014-15">
  
  
• Cutting spending will, in and of itself, provide a stimulus to economic growth. ("The crisis in the Eurozone shows that unless we deal with our debts there will be no growth. And these forecasts demonstrate that a credible plan to cut our budget deficit goes hand in hand with a steady and sustained economic recovery.")

Labour is having trouble countering this story, which makes a certain amount of simplistic sense when repeated often enough with firm hand gestures. Nothing is that simple, however, and the government's story is based on ideology and fallacy. Labour, here is a suggested economic story that you could be telling.

Let us go back to the very basics. An economy is a system for allocating resources. Economies came into being as a method for humans to allocate resources more effectively. They do not exist in order to grow endlessly. An economy that does not improve the wellbeing of those who participate in it is a failure, whether or not it is growing according to measures of Gross Domestic Product (GDP). An economy that inflates on paper but has no impact on quality of life is wasting resources.

It is becoming increasingly clear that increases in national GDP have little or no impact on wellbeing in developed countries. Indeed, a rash of recent books (I recommend Happiness by Richard Layard) point out that measured wellbeing has flatlined in recent decades. The government has even acknowledged this, but without accepting that they might need to do something about it. Politicians are elected with a responsibility to improve the wellbeing of their electorate. The economy is not the electorate, and a narrow focus on promoting economic growth is an abrogation of responsibility.

When you approach the government narrative from that perspective, it looks much less credible.

"The country is dangerously in debt." Government debt has previously been at higher levels and the country has survived . What makes the current situation specifically worse is that credit ratings agencies, financial markets, and the International Monetary Fund say it is worse. All three have strongly vested interests in taking that view. Credit ratings agencies make assessments of how well national governments and companies can repay debt, but are not held accountable for the accuracy or impact of their assessments. They are profit-seeking companies, not independent agencies. Credit ratings agencies are in fact part of the financial markets that make their profits from betting on whether debt can be repaid. The IMF is an organisation driven by flawed free-market ideology. Reducing public spending is its policy prescription for any economic downturn, an approach which contributed disastrously to the 1997 Asian financial crisis.

"Labour spent too much. The debt is their fault." The last government spent a lot of money bailing out the banks. I don't know whether that was the right decision, but it should at least be seen in a wider context. Most European countries were also bailing out their banks in late 2008, as was America. Blaming the Labour government specifically is ridiculous, as this was the same approach taken, for good or ill, by the rest of the Western world. Until the bailouts, UK debt levels were stable.

"Too much was spent on public services and, in particular, welfare. We can't afford to spend so much on these things." This is manifestly ideological. There is no specific level of public spending that an economy can afford. Different countries choose to tax and spend to different degrees, according to political persuasion. To say that basic public services cannot be afforded presupposes that the economy is more important than people's wellbeing. If the economy is growing but wellbeing decreasing, the government has the wrong priorities and policies. Whilst it isn't inevitable that lowering public spending will reduce wellbeing, in the case of the coalition's cuts it seems inevitable. Security is an immensely important aspect of wellbeing. Reducing the welfare safety net, the quality of healthcare, the accessibility of education, the affordability of public transport, and the availability of the emergency service, whilst unemployment rises and prices inflate; that's a recipe for insecurity and anxiety.

"Therefore public spending must be cut as fast as possible." The speed at which cuts take place is likewise ideological. Spending time carefully considering the evidence and evaluating the risks of withdrawing and reducing public services assumes you value them in the first place. The government simply does not. Their debt deadline is entirely arbitrary; there will not be bailiffs banging on the door of the Treasury if we still have a deficit in 2015.

"Cutting spending will, in and of itself, provide a stimulus to economic growth." This is a delusion. Spending cuts have only just started and the economy is already contracting, with growth forecasts repeatedly cut. Even if economic growth was an aim worth pursuing in itself, rapidly cutting public spending would not make it happen.

The government is cutting public spending quickly, with no understanding or interest in how it will hurt the vulnerable. Not only is this damaging the wellbeing of millions, it is not even going to achieve the stated aim. These are the messages that Labour should be emphasising more clearly. When the challenge comes back, "But you didn't have a plan to deal with the deficit!", the obvious response is that rebuilding and reforming the economy in order to avoid a repeat of this kind of banking collapse takes time and evidence. A considered approach is clearly preferable to rushing into dramatic contraction of the whole public sector, with only discredited ideology to support you. The coalition government threw together an emergency budget in less than a month, cutting millions without considering the unintended consequences. Labour need to say clearly what this means: that the government does not care how the cuts blight people's lives. Labour should position itself as the party that puts people before economic ideology, whereas the government does the opposite. Perhaps they might even consider supporting the claim with some policies.

I should mention that I've never actually voted for Labour in a general election. It isn't that I'm a staunch Millibandit (or whatever you'd call it), I just yearn for a strong opposition in Westminster. Hopefully Labour are currently formulating an approach that will lift the level of debate above the present no-cuts-versus-all-the-cuts doldrums. I enjoyed the friendly atmosphere whilst marching for the alternative on March 26th, but demonstrations like that aren't nearly enough. The government's economic policies must be challenged more strongly by politicians. The coalition's narrative is not just slightly misleading, it is entirely wrong. It's time that the opposition stood up and said that.

If they already have and the media has failed to inform me of the fact, please be so kind as to provide a link.

Numbers Game

If yesterday's Cambridgeshire County Council meeting was dramatised as a Hollywood movie, the trailer would sound a little like this:

Fifty-four councillors...
Nine and a half hours...
Two arrests...
£161 million cuts over five years...

ONE BUDGET

The full details of Cambridgeshire County Council's budget can be found here. I've been trying to digest what they mean. The meeting really did last until 8pm and was repeatedly held up by hecklers. Amongst all this kerfuffle, the council meeting discussed the budget by five service areas.

Children and Young People's Services will no longer be universal, but rather targeted at the most vulnerable. This includes Connexions, Youth Service, and Children's Centres. Services that are currently provided to all schools will also be targeted in this way, notably transport to school. Subsidies for music activities will end. Capital funding for new schools has all but disappeared, so the need for more school places 'may mean mobile provision in the medium term'. Non-urgent repairs and improvements to schools are to be delayed until more money becomes available.

Community and Adult Services take up the largest proportion of council spend, as it includes care for the elderly, disabled, and abused. Almost all adult social care services are already outsourced, so there is little the council can do to reduce their cost other than asking providers to find efficiency savings. The emphasis is on trying to prevent the need for costly care, by encouraging continued independence. The so-called 'offer to users', in other words the extent of support available, will reduce by 25%.

Community and Adult Services also includes libraries, which will see a 40% cash reduction in their budget over five years. 13 libraries in the county are under review; if they cannot be integrated with other local services or run by communities, they will close by April 2012. The frequency of mobile library visits will be reduced by 50%.

Environment Services cuts include the complete phasing out of bus subsidies, reduced road maintenance, fewer road safety campaigns, and the removal of universal road safety education in favour of targeting 'accident clusters'. The Trading Standards service will be restructured and reduced. Spending on the environment and climate change will be cut by nearly half a million.

Corporate Services includes the back office stuff like coroners, customer service, scrutiny, and democratic services. All of those areas are being reduced, as well as communications, emergency planning, and IT (which will cease to exist as a separate team and be cut by 35%). This rather unsettling phrase sums it up: 'there will be a move towards greater self-sufficiency and uniformity'. Opening hours for contact centres will be reduced, with the aim of ensuring as many people as possible get information online. The council will stop publishing magazines, reduce building maintenance by 38%, and stop any work on energy management. Several offices will be closed.

The final service consists of everything shared with Northamptonshire County Council, in a scheme that was designed to save money before anyone even knew to fear Eric Pickles. It covers things like legal services, human resources, finance, and procurement. Cost savings will be squeezed from here too, by reducing management and improving use of technology.

The documents available to the public don't specify which services the 450 council employees are being made redundant from. The answer is all of them.

Councillors obviously had incredibly difficult decisions to make, faced with £50.4 million savings to be found in a single year. Towards the end of this epic meeting, though, they really misjudged the public mood by overwhelmingly voting against a 5% cut in their allowances, proposed by the single Green councillor. If life was indeed a Hollywood film, at this point someone would have stood up and made a stirring speech about how we're all in this together and the motion would have carried. However this is the real world and the meeting did not end on such a happy note. So if you live in Cambridgeshire, make the most of your local library, rural bus services, specialist teaching, and transport to school now. Soon they will be replaced by the Big Society, or not.

The Big Issue

The phrase Big Society has been ubiquitous recently. Frankly I am getting tired of hearing it, particularly as no-one really knows what it means. Last week I watched Ten O'Clock Live, which was pretty entertaining and is still available on 4od here. The best bit was a loud argument between Johann Hari, Shaun Bailey, and Phillip Blond. Ostensibly this was meant to be about whether the Big Society is a good idea, but was really a debate about what it is. Each panellist had a different view. Amusingly, they apparently continued to argue about this off-air.

Hari described Big Society as a mere phrase, used as a pretext to justify huge cuts in public services.

Bailey saw Big Society as agreement that the government would stop interfering with charities and let them solve social problems in their own way.

Blond enthused that Big Society would lead to co-operatives springing up everywhere, and public services being run by independently by, presumably, enthusiasts.

Evidently, each man's view was entirely shaped by his background and particular hobbyhorses. Bailey is a former Conservative candidate for Hammersmith and now runs a charity there. Hari is a left-wing journalist, columnist for the Independent, and a staunch critic of the cuts. Blond is director of a right-wing libertarian think-tank that has been banging on about mutualisation, collective ownership, and co-operatives for ages.

I can see how all three perspectives have some merit, but overall the debate just gave me the impression that the Big Society is a void into which each individual projects their opinions. This is curious, given the fuzzily-articulated philosophy of collectivity and togetherness that seems to underpin government rhetoric. Of course, for the intended definition of Big Society, it's worth checking with the man who foisted it upon us, Cameron himself. In a recent Guardian article, he laid it out:

...it combines three clear methods to bring people together to improve their lives and the lives of others: devolving power to the lowest level so neighbourhoods take control of their destiny; opening up our public services, putting trust in professionals and power in the hands of the people they serve; and encouraging volunteering and social action so people contribute more to their community.

The article is actually worth reading, as it is a lot clearer than most of the waffle that the government has put out on the subject. Some of it even makes sense, but it is a totally partial approach. Cameron talks of the cuts to public services as an opportunity, but ignores the element of risk. The current government, many of them millionaires, don't see the public sector as a necessary safety net but as an impediment to progress. This post sets out this problem with the Big Society, along with a number of others.

More important than what the Big Society is, though, is what it'll mean. I agree with the David Cameron that the Big Society could transform Britain. It could turn it into a more compassionate, actively involved, resilient place - eventually and in some areas. In others, it could exacebate inequality and tensions between social groups, cause a rapid deterioration in infrastructure and the public realm, and trap people in blighted communities. Basically, diffusing public services into a confusing mass would cause rapid divergence.

That is, if you take David Cameron at face value. Let us look in more detail at his three policy threads, 'devolving power to the lowest level so neighbourhoods take control of their destiny; opening up our public services, putting trust in professionals and power in the hands of the people they serve; and encouraging volunteering and social action'.

Devolving power: the Localism Bill defies its name by containing over a hundred new powers for the Secretary of State for Communities and Local Government, including the ability to decide what constitutes an 'excessive' council tax increase. Urban areas without an established 'neighbourhood forum' won't be able to make use of the planning powers in the Bill, and require local councils to mediate between competing bids to take on this status. They also rely on planning authorities to provide advice and resources, which will not be available. Taking control of your destiny through planning is only meaningful if development of some sort happens, which requires investment. Not much sign of public investment any longer, so this require the private sector. Small, largely inexperienced and unresourced groups vs huge developers; the former may notionally have the statutory planning powers, but I think the public sector is needed as a mediator here, or at least a backup.

Opening up public services: the Localism Bill doesn't give community groups any precedence over private companies in bidding to run public services. Realistically, who is going to bid lower? Who is going to demonstrate economies of scale and a track record of delivery? It'll be the big companies. As for collective ownership, I'm not seeing a lot of enthusiasm for that at the coalface of local government cuts. Where's the support for mutualisation? Where are the precedents? Blond mentions one, a port. Has this been tried for housing services, planning departments, highways? All are being cut back at the moment. How do you take collective ownership of something like that? Anyway, when faced with cuts this sudden, local councils just don't have the time to properly consider outsourcing or 'opening up' services. Budget cuts of 20% will arrive before the Localism bill becomes law.

Putting trust in professionals: TRUST? Don't make me laugh! Have you read any press release from CLG lately? Have some samples:

Mr Pickles has raised strong concerns over the frequency of council papers, politically contentious advertising and use of lobbyists, pledging to rewrite the rule book. He believes councils should redirect resources into protecting front line services.

Whitehall has cut back the red tape which holds local community groups back and councils should now do their bit to support this national day of celebration

The taxpayer has a right to look under the bonnet of their Town Hall and see what decisions are being made on their behalf and where their money is being spent [...] Today I'm publishing a new code that will help decipher the Town Hall maze of middle management, bringing more public information to light. This will also give the few remaining refuseniks a clear game plan to follow.

And those are just from the past week! Also within the week, CLG responded incredibly defensively to a Local Government Chronicle article interrogating the department's published spending information. Quote:

The Local Government Chronicle has made claims that "Eric Pickles has spent millions on consultants since he took the reins in the Department for Communities and Local Government reflecting the cost of the reorganisation under way at Eland House."

This assertion is based on a factually inaccurate analysis of the spending over £500 that the Department now publishes as part of its commitment to transparency.

A spokesperson for the Department for Communities and Local Government said:

"It is completely untrue to suggest that millions have been spent on consultants since the change in administration. Several of the figures quoted are incorrect, refer to spending under the previous administration or have been incorrectly entered as consultancy. [So in most cases, it was their mistake not LGC's interpretation]

So much for trust. No wonder the relationship between local and national government is at an all-time nadir. Public servants are being painted as faceless, wasteful bureaucrats in order to justify making hundreds of thousands of them redundant.

Returning to Cameron's 'power in the hands of people', in general this is not a new power or legal change as such, but the expectation that sudden absence of public services will unleash innovation and creativity in dealing with, say, potholes. There are shades of Shumpeter's 'gales of creative destruction' here, the concept of something new and better emerging from chaos. A very old idea, almost always promulgated by those who would remain entirely unaffected by such chaos.

Last of the Big Society characteristics is the encouragement of volunteering and social action. This is laudable, but should also be bounded by realism. Twenty-four per cent of people volunteered formally at least once a month in April-September 2010, which is a fall from 29% in 2007/8 but still not bad. Can volunteers really replace trained public sector professionals, especially when the volunteers need to earn a living themselves?

Meanwhile, the support mechanisms that would allow people to donate more of their time to the community are being cut. Disabled Living Allowance, Child Benefit, in fact all benefits are being cut and/or capped. Social housing is being phased into 'affordable rent' - 80% of market rent unless circumstances are 'exceptional'. Cutting Education Maintenance Allowance and raising tuition fees will reduce access to further and higher education. None of these developments will foster a sense of security and resilience, both of which seem vital to the Big Society even starting to seed in an area.

I don't feel that I've got my head around the Big Society yet, but it doesn't look like anyone else has yet, either. The point that sticks out in my head is this, though. The reductions to public services, the cuts in benefits, and the retreat of the state are not uncertain. They are happening now. The Big Society is still potential, small-scale, and vague. It will work in some places but not others. It is characterised by a huge risk, that when the public sector withdraws, nothing will fill the space in some places. The government thinks this risk is worth taking and indeed seems quite keen on risk in general (just look at what they're doing, or rather not doing, with the economy). That's all very well for politicians, all they have to lose are votes. The majority of the public could find their life blighted if they make their home in a place where society remains that bit too small.

Let It Grow, Let It Grow, Let It Grow

This week we learned that the UK economy shrank by 0.5% in the last quarter. George Osborne blamed the snow, conveniently forgetting that much of continental Europe experienced the same arctic conditions. Meanwhile Sir Richard Lambert, the outgoing head of the Confederation of British Industry, heavily criticised the government for having no economic growth strategy.

Sir Richard is right, when it comes to growth the government has some policy gimmicks but no actual strategy. Back in October last year a 'Local Growth' White Paper came out, awkwardly titled 'Realising Every Place's Potential'. Although the paper wanders erratically across planning, housing, sustainability, and region-bashing, the main message is summed up by this quote:

A further feature of earlier approaches was the belief that planning could both determine where growth should happen and stimulate that growth. This approach failed as it went against the grain of markets. Regional and other strategies stifled natural and healthy competition between places and inhibited growth as a consequence.

This makes it pretty evident that the new plan is to have no plan. The government doesn't think it needs a growth strategy. It considers the encouragement of economic growth not really any of its business; all it needs to do is destroy as much of the public sector as it can, and the economy will grow like Japanese knotweed. This is a very simplistic form of neoclassical economics, based on the lovely myth of perfect free markets. So as to ensure that the Department of Business Innovation and Skills doesn't look like a waste of space, though, a couple of policies have been announced.

Technology and Innovation centres are to be established, the first of which will allegedly open in less than two months. Next to nothing is known about what these are or what they'll do, other than the fact that they got £200 million funding in the Spending Review.

The other policy trotted out as supporting the economy is the Regional Growth Fund. This consists of £1.4 billion over 3 years, scraped together from various government departments (BIS, CLG, DEFRA, DfT, and the Treasury) for projects to 'rebalance' the economy away from the public sector. Regional Growth Fund is caught in something of a Catch-22. Public sector bodies categorically cannot apply for it. Private sector organisations can, but must ensure that they aren't breaking the rules on state aid, which try to prohibit the government from propping up certain companies at the expense of others. State aid rules are complex, hard to understand, and greatly restrict the monetary support that businesses can get. As you can imagine, this presents problems. Nonetheless, the first round of the fund (a maximum of £300 million) attracted nearly 450 bids totalling well over £2 billion.

£1.4 billion may sound like an awful lot of money, but it is trying to replace multifarious infrastructure and transport funds, on top of the £6 billion spent in the last few years alone by Regional Development Agencies. For all their faults, RDAs provided business support and economic strategy. They are being wound up at the moment and their functions centralised or simply stopped. They will not be replaced, unless you count the completely unfunded Local Enterprise Partnerships, which I am not inclined to.

How successful is the No Plan economic plan likely to be? To date the signs aren't encouraging. The government is ignoring the fact that the public sector used to spend a lot of money in the private sector. And the fact that the private sector relies on public services and infrastructure to operate. And the fact that business confidence is heavily linked to government policy. And the overall state of the world economy in relation to the UK. The economy is shrinking, and the cuts have barely started yet. VAT hadn't risen yet in the last quarter, either.

The UK is vulnerable to economic forces far beyond its control. Rises in petrol prices, which the press have been up in arms about recently. Rises in food prices, as we import so much of what we eat. Rises in cotton prices, as we import almost everything that we wear. Inflation is therefore rising whilst the economy contracts. Stagflation, as it is charmingly known, was a feature of the 1980s. Inflation now is nowhere near what it was then (4.8% compared to over 20%), but give it time. Peak Oil is on its way.

The government wants private sector growth, which would require internal demand and/or exports to pick up. Demand for products and services within the UK is unlikely to grow given high and rising unemployment, limited credit availability, and higher VAT. Faced with reduced government support for the young and elderly, people will tend to save more. The disaster that is housing policy will increase costs in that sector, too. House prices will continue to rise as new supply gets scarcer.

Demand for UK exports has grown as the value of the pound falls, but is limited by the economic troubles of our main export partners (the US, Ireland, and the rest of Europe). Moreover, our major exports are cars, weapons, and financial services. Car demand is influenced by the likelihood of unemployment and wider economic climate (alarming), credit availability (poor), and petrol costs (rising). Weapons demand is influenced by government defense spending (being cut). Financial services got us into this mess in the first place.

Despite all this negativity, I am aware that I live in one of the few places to be prospering economically. The high-tech cluster around Cambridge is one of the few bits of the UK to be a net contributor to the Treasury. But at the moment the government isn't interested in what's holding this area back; overloaded transport infrastructure, unaffordable housing, and loss of public sector co-ordination and expertise. These are market failures which cannot be fixed by the private sector.

The government has lost sight of the basic fact that you have to invest money to make more money. That's practically the only policy lever it has left, in any case. National interest rates have little influence on levels of inflation or the cost of new borrowing nowadays. Regulation and tax incentives for business aren't popular with our neoliberal coalition. Their No Plan is to spend less to make more, probably based on a hunch.

This is not to say that no economic growth equals economic doom, far from it. Growth is pointless unless it improves wellbeing, and in any event cannot carry on indefinitely. At the moment government policy seems to be shrinking the economy and reducing wellbeing, although as ever I console myself with the fact that greenhouse gas emissions fall during downturns. Ultimately the UK and the rest of the world will have to reshape our economies to operate within environmental limits. Perhaps a coalition-assisted double-dip recession might set the scene for a lower carbon, less oil-dependent economy? It's a long shot, but hope for a green revolution springs eternal. Even when government economic policy seems entirely misconceived.

Happy New Year

It's 2011. The sky is grey, it's raining, and Cambridgeshire County Council are making 450 people redundant this year. Unions expect a further 450 or so jobs to go in subsequent years.

The latest survey of local councils, police authorities, fire authorities, and national park bodies suggests that 102,000 jobs will be lost in total. What's striking about this figure is that it covers the 131 of about 500 such organisations. The other 369 organisations have yet to announce their job cuts. Every local authority will be making people redundant. All councils, police, and fire services are facing unprecedented budget reductions. If anyone still thinks that such cuts and job losses will have no effect on services, they must be entirely deluded.

A local council chief executive has even dared to say what every single local government employee is thinking:

You've got this clown of a secretary of state saying that in well-run councils, the public won't notice any difference, I mean what planet is this guy on?

Public servants aren't supposed to be angry, but you look at this and it's unfair.

It's the big lie tactic that if you tell a big enough lie, and say it often enough, then people will believe it.

Like every other public servant, I am supposed to be impartial. But how can anyone with a conscience remain supportive of government policy when its this destructive? Like every other local authority, Cambridgeshire County Council needs to make savings from all services. That includes protection of vulnerable children, care for elderly and disabled adults, and primary and secondary education. Kids and vulnerable adults will pay for mistakes made by bankers. The same bankers whose bonuses will not be limited by the government.

The most important purpose of the public sector is to protect the people who need it. When the government prioritises an ideological war on public spending above essential health, education, emergency, and social services, it is fundamentally failing to do its job. Public servants picked up on this last year. In 2011 I think the wider population are going to realise what austerity means, and they will get angry too.

The Way We Live Now

When I started this blog in July, it seemed to me that those working outside the public sector hadn't yet realised that there were massive changes ahead. To be fair, I had only a hazy idea myself, but enough to feel alarmed at the prospect. There has definitely been a shift in recent weeks. I've noticed that conversations with colleagues, family, friends, in fact just about anyone, circle inexorably back to the telling phrase, 'We live in interesting times.' Everyone is saying this, and the required response is to nod sagely and murmur, 'Interesting times indeed.' This sequence confirms that you, like the other party in the conversation, are an observer of dramatic events beyond your control.

The next step, of course, is to shift from observer to participant, as the protesting students have done. I subscribe to the view that the protests are about a lot more than tuition fees. Young people are protesting now because they feel they have nothing to lose by doing so, because they feel that their opportunities are being taken away. Whatever the actual impacts of the complex new tuition fees scheme (which might be more progressive than the current system, I haven't examined it in sufficient detail to say), putting a price of £9,000 a year on a degree is an ideological statement. Whereas previous governments emphasised the value of higher education to society, the coalition is framing it as an asset to the individual, one that needs to be purchased. I don't think the government understand how much of a shift in the social contract this is, nor how hypocritical it looks in light of their fairness and social mobility rhetoric.

When I was a student, the times weren't especially interesting. I graduated prior to the introduction of top-up fees. During my degree there was a general election in which the incumbent Labour government faced no serious threat, and the economy remained boringly stable throughout. Despite this, as students do, I spent long hours sitting round a kitchen table putting the world to rights with my friends. There is a vast gap between those debates and the protests now. They are manifestations of the same student political awareness, altered by the seismic economic and political changes of the intervening years. The twentisomethings of my generation graduated with plenty of debt (£10-£25,000 for the most part), but we expected to and for the most part did find jobs. Our future looked stable.

It isn't anymore. Many of my university friends now work in the public sector; in education, the army, Whitehall, the NHS, quangos, or local government. I don't think any of us can say with confidence that our jobs aren't to some extent at risk. My whole team is now officially at risk of redundancy, although we've yet to receive the letter confirming this. Most importantly, we have little reason to believe that there will be other jobs available if/when we are kicked out of the public sector. In the mixture of positive and negative economic news, it remains a fact that there are already more job-seekers than there are vacancies in the UK. Unlike our older colleagues of many years experience, we twentisomethings will get minimal redundancy payouts, certainly not enough to start our own business or keep us off Job Seeker's Allowance. We have been basically priced out of the housing market, so are unlikely to have either the asset of a house or the burden of a mortgage.

Where does this leave us? Certainly in a better position than teenagers and students, which is why we've yet to take to the streets. In my opinion, it leaves us as prime brain drain material. I wonder if my generation will take a look at the lack of jobs, collapsing public services, and disgust with politics in the UK, and decide to go elsewhere? Being stuck in renting makes us mobile and our degrees apparently now command a great premium. Although many other countries are experiencing austerity, we are the only one to be saddled with the sickening spectacle of David Cameron and Nick Clegg telling us that we are all in this together. For those with languages, France and Germany beckon. For others, Australia is having an economic boom (unsustainably based on exporting raw materials to China, admittedly), or what about New Zealand, Canada, and the less Tea Party-ridden parts of America. In fact, there's a whole world out there, and it's looking increasingly appealing.

I can't understand why the government seems amazed that instability causes protest. Perhaps they're just feigning surprise that young people complain when their certainties and security are suddenly stripped away. During 'interesting times' you can either get involved or watch from a safe distance. A lot of people my age will soon be faced with that decision.

Meanwhile, Cambridgeshire County Council has announced that its budget is being cut by £160 million over the next five years. £50 million must be saved next year, and that front-loading will have an especially significant impact. An estimated 450 jobs will go. Suffolk-esque kamikaze outsourcing does not appear to be the preferred option, encouragingly. A consultation on where the cuts should be made can be found here.

Edited To Add: Having had a go at the consultation survey, I'd urge everyone who lives in the county to do the same. It's eye-opening - whatever distribution of cuts is decided, it's clear that support for the most vulnerable people (the elderly and at-risk children) will be cut. In addition, up to 19 libraries could be closed and up to 80 bus routes stopped.

Life's Not Fair

The government's reliance on the concept of fairness is something I've been curious about. Since they talk it up so much, it would seem logical that there are some arguments, or even policies, to make the cuts seem fair. These haven't been easy to find, though, so I was pleased that Nick Clegg had apparently seen fit to explain by way of an article in the Guardian.

When I started reading this piece, I was expecting to be annoyed. I anticipated that Clegg would make some moderately specious arguments, based on carefully chosen statistics. I intended to refute these arguments. But as I read on, all I could think was, he's not even trying. The last three paragraphs of the article don't even have anything to do with fairness or inequality; they're merely a defence of the Liberal Democrats decision to pal around with Tories.

Mr. Clegg, I'm not just angry, I'm also disappointed. Let us examine what is being said here.

Clegg begins by drawing a line between 'old progressives' and 'new progressives'. He doesn't bother to define progressive, but one can only assume that he means someone who promotes progress and improvement. The old progressives, it seems, happen to be concentrated in the Labour party. They believe that the more the government spends, the more progress will be made.

This is dismissed as, 'clearly nonsense'. Yes, it is simplistic and I doubt anyone would disagree. In fact, I doubt Labour would disagree. Clegg then makes the jump to paying off the deficit more quickly being progressive in and of itself, making no mention of any possible implications that this might have. Paying off the deficit is being carefully partitioned away from cuts to public services. The former can be painted as an economic imperative; the latter scares people. Discussing one without the other is dishonesty by omission. Clegg's justification for deficit panic is the risk of higher interest rates on mortgages, more debt servicing, and a greater burden for taxpayers. Frankly I'm getting tired of these three excuses. There are a multitude of assumptions under there, the most significant of which is that austerity won't cause the same chaos here as Ireland is currently enjoying.

Clegg doesn't go into this. Instead, he proceeds to say that lifting people out of poverty isn't progressive. I am not exaggerating. Quote:

Old progressives see a fair society as one in which households with incomes currently less than 60% of the median were to be, in Labour's telling verb, "lifted" out of poverty. The weakness of this approach is that significant resources end up being devoted to altering the financial position of these households by fairly small amounts – just enough, in many cases, to get them above the line. But poverty plus a pound does not represent fairness.

Mr. Clegg is saying that putting significant resources into making a lot of people's quality of life better is wrong. How can you counter that sort of breath-taking arrogance? What is unfair about helping people to move above the poverty line? The whole idea of a poverty line is that below it quality of life is inadequate and basic needs cannot be met. I'm sure the people helped by the state to heat their homes, pay their rent, and clothe their children didn't stop to think, 'Gosh, how unfair it is that the state is helping me! Damn their unprogressiveness!'

After conceding that poverty is a perhaps little bit about money, Clegg makes the connection with quality of public services. These would be the same public services from which the government is chiselling around £80 billion of savings over the coming years. Will this increase the quality of services to the poor? Do I need to answer that?

The three areas of public spending identified as progressive, and therefore worthy of protection, are early years, schools and the NHS. That's it. From this we can infer that there's nothing fair about protecting people from crime, so cut the police. Or from injustice, so cut the courts and legal aid. Providing welfare payments for the disabled, sick and elderly isn't progressive at all, so they can all be reduced. There is apparently no fairness in allowing people a half-decent home, so cutting the housing budget by half is no problem. Higher education isn't progressive, so universities can be encouraged to raise their fees in order to make up funding cuts. Caring for vulnerable children isn't progressive, neither is protecting the environment, nor responding to fires, providing transport, community centres, flood defences, job centres, libraries, trading standards, and so on.

The title of the article implies that the government is concerned about inequality persisting down the generations, yet no examples are provided of ways in which entrenched poverty will be tackled. This argument that cuts won't be made to the NHS, schools or early years is the only one tried. Quite apart from the fact that close examination of the CSR undermines it, all that the government are doing here is freezing spend at the level of the previous regime. This is supposedly progressive, although increasing the level of state funding to that level during the Labour years wasn't.

Faced with this slight difficulty in his public services argument, Clegg veers off into social mobility. New progressives want to remove the barriers to social mobility. That's entirely laudable, but what is the government doing about these barriers? Apparently just the Pupil Premium, which will be paid for through reductions elsewhere in the education budget. It's yet to become clear how it will work, but importantly it is for school children. The social mobility of everyone older is left unmentioned.

Turning now to tax, Mr. Clegg states:

New progressives want to reshape the tax base fundamentally, towards greater taxation of unearned wealth and pollution, rather than of people.

How nice. I presume a carbon tax is forthcoming? A land tax, perhaps? Extra tax on second homes? Clegg must surely working on those? Very quietly, though, as all he mentions are the changes to income tax and capital gains tax. I don't disagree that those changes seem seem to benefit those on lowest incomes most, as the IFS analysis showed. What goes unmentioned is the most regressive tax of all, VAT, being raised to 20% next year. There is also no reference to the purpose of most tax: to redistribute money. Wanting to move away from taxing people implies that this is no longer an aim of the government. Why not? Are we back to the Victorian notion that every individual is responsible for their own level of wealth, and if they can't earn enough to feed and clothe themselves they don't deserve help? How is that in any way consistent with social mobility?

The article then ends with an extraordinary three paragraphs that read as an attempt to justify the Liberal Democrats sell-out to the Conservatives. According to Nick Clegg, coalition governments are inherently progressive, whatever they do. Why? Because of pluralism. What might look like a calculated assault on public services, a callous betrayal of the vulnerable, and an extremely risky economic gamble is in fact a beautiful example of pluralism and compromise. So Mr. Clegg tells us.

I for one am not remotely convinced.

Reading between the lines, these so-called new progressives seem to think that a smaller state is inherently fairer. That giving people fair life chances means leaving the worst off to help themselves if they can. That markets will sort out poverty without the state bothering to get involved. All of this is in my view incorrect. Greater state intervention doesn't automatically reduce poverty and inequality unless it's done carefully, but without it inequalities just deepen and persist.

I don't know what the new progressives believe, but just look at who they are. Nick Clegg and at least another 17 of the 29 who comprise the coalition cabinet are millionaires; 23 if you believe The Daily Mail. George Osborne, a chancellor who takes pride in personifying the cuts, has an inherited trust fund and personal wealth of around four million pounds. 20 of the 29 cabinet members went to Oxford or Cambridge. 25 are male, 28 are white. Other than the royal family, can you think of any group in this country less qualified to lecture about fairness?

The End is Nigh

This was not a cheerful way to start the working day:



On my desk I found the latest Inside Housing magazine announcing the death of social housing. The coalition's so-called reforms effectively end social renting as a tenure. Requiring new social tenants to pay 80% of market rents will result in one of two things:

Housing Benefit will have to increase to cover the much more expensive rents, increasing how much is spent on benefits in order to subsidise the provision of new social housing;

Or

Housing Benefit won't increase and will no longer be sufficient to cover social rents, ending the safety net for the vulnerable that social housing was meant to be.

I wonder which will happen? Here's a clue: the government is totally obsessed with reducing the housing benefit bill.

The National Housing Federation are saying that the level of new social rents will be so high that in places like Camden, Hackney and Haringey households would need to earn £54,000 to pay their social rent without housing benefit. David Cameron's defense of this is, '[Are] our constituents working hard to give benefits so people can live in homes they could not even dream of? I don't think that's fair.'

This welfare-scroungers rhetoric, seemingly taken straight from the Daily Mail, makes me incredibly angry. Cameron is ignoring the fact that the housing market is a disaster in this country, supply is inadequate, owned and rented housing is getting less and less affordable, and there is a particularly acute shortage of housing for the most vulnerable. That's why spending on housing benefit has increased. In London and the economically thriving parts of the South, private renting (let alone buying a house) is unaffordable for people on an average wage. It is a barefaced lie that only unemployed 'scroungers' need housing benefit and social housing. It is also a barefaced lie that social housing is in any way mansion-like.

Here are some facts from the government's own housing statistics.

• The percentage of households who own their home outright and have no
  members of the household working (57%) is comparable to that for social
  renters. This is because both contain a high proportion of the retired.
  
  
• 31% of social tenants are retired; only 21% are under 35. Younger people are far more likely to be in private rented accommodation.
  
  
• Social housing is more likely to be overcrowded than private rented or owner-occupied. (6.7% of social renters, 5.4% of private renters and 1.6% of owner-occupiers are overcrowded.) A third of all overcrowded households live in London.
  
  
• More than a quarter of all children in the social rented sector (25.7%) are living in overcrowded conditions, compared to 5.8% in the owner-occupied sector and 15% in the private rented sector.
  
  
• More than a third of social renters work: 24% are in full time work, 10% in part time work. Only 8.4% are unemployed.
  
  Let me reiterate that: eight per cent of social tenants are unemployed. Would you like to see the table I got that number from? Here it is. David Cameron, your claims about unemployed scroungers are simply not true.
  
  
• 24.5% of social tenants are economically inactive, meaning that they can't work and are not getting Job Seeker's Allowance. These would be the disabled, ill, and full-time carers.
  
  
• Not all social renters receive housing benefit at the moment - 59% to be exact.
  
  
• Households buying a house with a mortgage had an average income more than three times that of social renters (£47,500 and £14,800 per annum respectively). 65% social renters have incomes of less than £15,000 per year.

Does it seem like social renters are getting an unfairly good deal here? I think not.

Social housing is allocated to those that most need it - the elderly, disabled, young people who've run away from abusive families, homeless families with children. I'll tell you what's not fair, Cameron: dumping these people on the streets, shunting them between bed & breakfasts, or forcing them into overcrowded accommodation. You don't need me to tell you that this will trap people in poverty.

How can this government have the gall to use the word 'fair' as their mantra whilst callously kicking away the welfare safety net? They have decided that if you can't afford shelter you're just not trying hard enough, whether you're a child, disabled, ill, elderly, or just another victim of the recession. William Beveridge must be spinning in his grave.

Dogbert Government

The Spending Review contains a lot of this sort of thing:

'The CLG settlement includes a 13 per cent real terms reduction to fire resource expenditure. This will require the Fire and Rescue Service to modernise, increase efficiency and deliver workforce reform.'

How this might be achieved without increasing the likelihood of people dying in fires is not stated. Rather, 'It will be for individual fire authorities to decide how to make these savings.'

It's assumed that every public service has a huge amount of waste and spare capacity. For some, this will be the case, but is it really safe to assume it for absolutely everything, including the emergency services?

This Dilbert cartoon sums up being told to cut 10%, or 20%, or 30% by a government with no idea of how this is to be achieved.


Thank you Scott Adams.

Incidentally, it might be an idea to check your smoke alarms.

Roof Over Your Head

For context, I have a particular professional and personal interest in housing policy. Previous missives include:

What's Wrong with Private Rental

What's Wrong with Owner Occupation

What's Wrong with Social Housing

Why I Won't to be Able to Buy a Home in the next Decade

The Coalition Don't Get it and the Coalition really don't get it.

A lot of rumours swirled around prior to the spending review about massive cuts to the housing budget. How bad was it? Worse than that.

It remains unclear exactly how much funding for affordable housing has been cut, as it's funded by a confusing patchwork of programmes. Here are the numbers provided in the spending review.

From 2008-11 the government's National Affordable Housing programme had £8.4 billion of funding, with a target of 180,000 new affordable homes a year. (As a result of the credit crunch, I'm pretty sure this target will be missed.) The CSR allocates £4.5 billion to affordable housing over the next three years, with a target of delivering up to 150,000 over the spending review period. This includes existing commitments, and is therefore effectively a four year target. Consequently, the annual target for new affordable homes has gone from 60,000 to 37,500. Of course, high targets are meaningless if you can't meet them. But despite this, CLG's token Liberal Democrat minister Andrew Stunnell is claiming that the current government will provide more affordable housing than Labour did. Given that the budget for affordable housing has been halved and the target cut by more than a third, this claim looks nothing short of delusional. It's based on increasing rents for social housing, which provides homes for the disabled, retired, and vulnerable, whilst reducing housing benefit.

Whilst Mr. Stunell is being mentioned, I should comment on what appears to be his pet project: affordable housing in abandoned farm buildings. Sounds like a bad joke? Here is the 'Homes on the Farm' press release.

Presumably this policy is based on some idea of bucolic country life, or perhaps nostalgia for the feudal system. What it would amount to is isolating those unable to afford market housing from jobs, services, and transport networks. I find it particularly absurd that the press release emphasises young people. Speaking as a genuine young person, most of us live in cities because that's where we can find jobs. Moreover, urban areas offer actual services and leisure activities, as well as not requiring utter dependence on a car. I grew up in the countryside and, frankly, after going to university in a city returning to quiet rural life isn't very attractive. I'm sure some young people do want to live where they grew up, but treating barn conversions as some sort of panacea for rural housing problems is misguided. Quite apart from the fact that this policy isn't supported by any funding or legislation, being merely an exortation to farmers and local authorities.

Once again, this demonstrates the government's failure to look in any way systematically at housing, employment and poverty. I know I say this a lot, but these issues are highly interconnected.

Two brighter notes, though. Firstly, the shadow housing minister Alison Seabeck is horrified by the hatchet taken to spending on housing. Secondly, the cuts to welfare, including housing benefit, will need to go through parliament. There is still time for MPs to wake up and smell the unfairness.

Just Keep Moving

On Friday Iain Duncan Smith advised the unemployed to 'get on a bus' to find work. As well as being incredibly patronising, this talk of the 'flexible labour market' ignores both economic theory and observable reality.

For a start, there is no economic rule that there will ever be enough jobs for everyone. At the moment, jobseekers outnumber vacancies to an almost farcical degree in economically weaker areas of the country. In the area of Wales Iain was discussing in his speech, for instance, there are approximately nine unemployed people for every vacancy. Presumably Mr. Duncan Smith would suggest that all those unable to get a job either commute further or move out of Wales.

Helpfully, the government will be making both options much more expensive in coming months and years. The costs of road, rail and bus travel will all rise. Petrol prices are creeping up again, VAT hits 20% in January, and the fuel escalator kicks back in next year. Road pricing is back on the cards. Bus subsidies are being cut by 20%. Rail fares will rise by 3% plus the Retail Price Index (currently 4.6%) each of the next three years. In fact, it looks like the best option will indeed be to get on your bike, as Norman Tebbit so famously suggested. Unfortunately, cycling from Wales to London on a daily basis is scarcely practical.

Moving house to get a job, though, would be even harder. Housing benefit is being substantially cut, the affordable housing budget has been hung, drawn and quartered (post on this to follow), and those in social housing have a newly created massive disincentive to move. New social tenancies will be on a novel and deceptively named 'affordable rent' basis, constituting 80% of market rent. That might sound reasonable, but in London would result in rents tripling. In Cambridge, I gather social rent would double under the new terms. Existing tenancies will remain on the same terms as they were created. If moving house would inevitably result in a vast increase in your rent, it would take a very attractive job to get you packing.

As with all the policy currently being made, Iain Duncan Smith's approach is entirely predicated on reducing spending, in this case on welfare. The Department of Work and Pensions isn't trying to strengthen the economy, reduce regional inequality, tackle long-term unemployment, or improve business confidence. It is assumed that swiftly reducing the deficit will cause these things to magically occur all by themselves. A number of nobel prize winning economists are sceptical of this.

Crudely cutting benefits, especially housing benefit, isn't going to make the labour market more flexible or create jobs. Indeed, jobs will be rapidly lost as the cuts bite. Encouraging people to move, or indeed forcing them to, is useless when there aren't jobs available. In the UK, housing costs strongly correlate with job availability, as house building has failed to keep up with demand in successful areas. Cuts to housing benefit and the affordable housing budget will move the unemployed away from jobs. Further away than they can commute, even if travel costs weren't rising steeply.

There's another significant problem here, and it concerns the Big Society. If communities are to unite in order to provide their own public services, as the coalition expects, they will need to be stable and cohesive. Housing benefit cuts will force hundreds of thousands of people to move, causing huge social upheaval. What hope have unsettled and precarious communities of successfully running libraries, community centres, and schools?

High levels of spending on welfare are a symptom of a geographically unbalanced economy and hugely dysfunctional housing market. Coalition policy is ignoring these causes in favour of the idea that anyone without a job just isn't trying hard enough. Again, it's hard to reconcile this insistence on believing the worst of people with a sudden flowering of voluntary work and community enterprise. All I can conclude is the government doesn't understand that things are connected, things like jobs and housing and transport. I wouldn't have thought that was too complex an idea to grasp, but unfortunately the Diary of a Civil Servant confirms that it is.

Across the Pond

Spending has been Comprehensively Reviewed, and I've been following it as best I can despite being on a first aid course. In theory I now know how to resuscitate people, so might end up as a Big Society paramedic in a few years when we can't afford real ones. (Public sector humour: I'm not sure it can get much blacker at this point.)

Whilst attempting to absorb the scale and implications of the spending review cuts, something kept nagging at the back of my head. I've just realised what it is. The coalition constantly treats public services as inherently wasteful, unnecessary, autocratic, and staffed by faceless hoards whose only aim is to spend taxpayers' money as quickly as possible. These attitudes sound familiar; they are shared by the American Tea Party movement. Although the Tea Party's political mores are somewhat incoherent, they heavily emphasise cutting government spending and taxes. They agitate for minimal government and greater freedom of individual and/or community action. They object to the public sector providing basic services, like healthcare and welfare.

What bitter irony that in the US a vocal but widely derided minority are espousing these policies, whilst in the UK they're suddenly the mainstream. But the UK never had anything even vaguely analogous to the Tea Party movement, and the coalition definitely didn't sweep to power on a dismantle-the-state ticket. How did we end up with government in the style of the crazy American right wing? Weren't the Liberal Democrats once a left wing political party? What the hell happened?

Make no mistake, this spending review can talk efficiency savings and streamlining procurement all it likes, but cuts like this are an unequivocal ideological statement. The government is saying that the state is far too big. There are too many people working in the public sector. There shouldn't be so many public services. It costs too much to provide everyone with a basic standard of living.

There are many, including plenty of public sector employees, who would agree with those statements in principle. Then they would protest vociferously about the high cost of train tickets, about class sizes at their child's school, about cancer drugs not being provided on the NHS, about the local community centre closing, about potholes in the road, about the lack of police on the streets, about their elderly relatives having to pay for care, about the costliness of being a student, about the wait for their local council to answer the phone, about inadequate flood defences, about the lack of NHS dentists, about every little thing that public sector does which we all take for granted. It might seem blindingly obvious, but still needs to be said: none of these services are going to improve when a lot of their money is taken away from them. Get used to being put on hold, to being told that there's now a charge, or just that no, we don't do that any longer.

There have been times when I thought perhaps I was being unduly paranoid to assume the government had an explicitly anti-state agenda. But then I came across this paragraph in the spending review document:

The Government will pay and tender for more services by results rather than be the default provider; look to set proportions of specific services that should be delivered by non-state providers including voluntary groups; and introduce new rights for communities to run services, own assets and for public service workers to form cooperatives. [...] Areas of focus for this approach: This approach will be explored in adult social care, early years, community health services, pathology services, youth services, court and tribunal services, and early interventions for the neediest families.

In other words, targets for privatisation and outsourcing, from a rabidly anti-targets regime no less. The mentions of voluntary groups and co-operatives are all very well and fluffy, but who is going to put in a cheaper bid to provide the service? The big private company with rock-bottom costs, or the local community group relying on grants? Faced with 30% cut in budget, local councils will have to pick the lowest cost option. Notice also that first to be sold off will be some of the most sensitive services required by the most vulnerable people, the kind of services with truly awful consequences when they fail.

I'm not going to go into everything that's depressing in the spending review, because I want to finish writing this within the decade. But briefly, the department that funds my job and almost everything I work on, Communities and Local Government, got the worst settlement of all. Over the next three years, their administration and programme budget will fall by 51%. Their capital budget will fall by 74%. That's tantamount to saying that most of what the department does is totally unnecessary. In case you wondered, these extraneous functions include providing affordable housing, planning, regeneration, and infrastructure.

But I am an optimist as well as a cynic, and have managed to find some vestiges of silver lining to the spending review. For one, the Carbon Reduction Commitment has been fiddled with to make it into a £1 billion stealth carbon tax on large businesses. It won't be hypothecated back into climate change mitigation, but it's still more of a carbon tax than I'd dared to hope for. In addition, the Department for Transport can no longer afford the £1.3 billion project to turn the A14 North of Cambridge into a vast motorway. In my personal view, the scheme was totally inappropriate and appallingly carbon-heavy, as well as a perpetual political flashpoint. I won't miss it, although the A14 needs fixing somehow (tolls?) as there are continually accidents on it.

Little rays of sunshine aside, the title of my blog has never seemed more appropriate: welcome to age of austerity. If the Tea Party have any sense (although frankly I doubt it), they'll be watching the UK with interest over the next few years. What happens when you suddenly and radically roll back all public services in an economically fragile country with high unemployment? Stay tuned to find out!

Particularly good spending review commentary that I've come across: the wonderful Joseph Stiglitz on why the cuts won't work and more on how local government got the worst of the spending review.