The next eighteen months could determine the trajectory of politics for the next generation. Words that have been out of favour for a long time – public, collective, mutual, the state – are suddenly fashionable again. But in Labour we need to be inventive in how we create a new role for the public realm in the period ahead. The welcome recognition of the limits to markets should not mean a retreat on the need for more responsive forms of public service delivery.
New times require us to think afresh, but also to build on the best of the traditions that our people and our movement have created. In Welsh Labour’s politics of community socialism here in Wales, when it comes to social ownership we need to remember that a tradition of co-operative and mutual provision has run alongside state provision.
Today our own people are showing, through many of the choices that they are making, that they are often impatient for us to find new vehicles of delivery in our public services, including new forms of funding. By empowering people and placing community benefit at the heart of decisions we can improve service delivery and outcomes for our citizens. And we do so also while pioneering high standards in delivery.
Last November we marked the 150th anniversary of the death of Robert Owen, the grandfather of co-operatives. Last year also saw the 60th anniversary of Aneurin Bevan’s NHS, modelled on the Tredegar Workmen’s Medical Aid Society. From Owen through Bevan to Tower Colliery, Wales has been at the forefront of delivering co-operative solutions. We have recently seen two new examples of the co-operative approach being launched in the field of housing. Tenants in Rhondda Cynon Taff voted to create RCT Homes, and tenants in Torfaen voted to create Bron Afon Homes.
I call RCT Homes’ approach, which extends to running the largest solar heating installation scheme in the UK, and the creation of basic bank accounts for its tenants, ‘wraparound regeneration’. RCT Homes’ main contractors are using local suppliers, generating a total of 61 new jobs and training opportunities. RCT’s £170 million programme includes £113 million of private sector finance. Local businesses have bid for and won major contracts against competition from national companies, creating 59 local jobs.
We should not be afraid of private sector funding. Though we would not want to replicate some of the excesses of PFI in England, there are other models, such as the bond finance underpinning Wales’s water industry, itself owned by a social enterprise, Glas Cymru.
In Wales, we are being creative in our approach to new funding vehicles for regeneration. We are seeking to develop one of the first Urban Development Funds in Europe under the EU’s Jessica initiative – a substantial multimillion pound trust run by a professional fund manager, with the Welsh Assembly Government and a private sector funder having equal stakes.
This model of alternative financing would arguably be unique to Wales.
We already have similar approaches working with private sector financing partners in developing office and industrial property, as well of course as Finance Wales, our own investment bank.
Community benefit is the best way to drive public service reform. We have to win people back to the idea that if their community benefits, they benefit as individuals.
In the next phase of Welsh Labour’s community regeneration programme, Communities First, which provides additional investment for 150 of our poorest communities, we are empowering those communities to challenge the delivery of public services in their area, by creating an Outcomes Fund into which only Communities First partnerships will be able to bid, but with support in kind or cash on a matched basis from other partners. We are also using the idea of community benefit to drive procurement.
As an example, the construction of the Porth and Lower Rhondda Fach relief road meant:
• 47 long term economically inactive people employed and given training to minimum NVQ2 level.
• £1.2m worth of wages into the local economy.
• £8m worth of wages to the local economy through supply chain.
People expect the public sector to deliver. But they also expect it to deliver to a high standard. And that is a Welsh tradition too.
Sixty years ago, Aneurin Bevan, speaking about his programme as Housing Minister, said:
At this moment, and for a few years to come, we are going to be judged by the number of houses that we build. In 10 years’ time, we shall be judged by the kind of houses that we build and where we are building them.
So it is not just about delivering. It is also about delivering quality. People expect us to aim for the best. The evidence before us is that people are increasingly impatient for change.
We need to understand that if we don’t lead, then people’s aspirations can be led in other ways that are not progressive: that are competitive, not cooperative; that are selfish, not mutua, and that those tendencies can be and often are exploited in times of economic insecurity.
Welsh Labour needs to look honestly at its own traditions in Wales and remember that they were never as statist and singular as some like to make out. We need to remember that we have embraced pluralism and diversity in service delivery and in funding in the past and are doing so now as well.
We need to ensure that we win people to the Labour cause by demonstrating that as progressives we are open to new ideas and new models.