Governing in 2015 with much less money

Last week Ed Miliband set out how we plan to control social security spending by focusing on the costs of failure. And Ed Balls explained the tough inheritance Labour will face if we win in 2015. The failure of the government’s economic policy  means we will have a substantial deficit and rising debt. Ed Balls has made it clear to everyone in the Shadow Cabinet that Labour  has to prepare to govern on the basis of falling department spending.

That is where we start from.

If Labour wins in 2015  we will govern on three organising principles. We will give power to local people, to shape their services and communities. We will invest for prevention, to avoid the costs of failure, and we will build into the system collaboration between public bodies, and end bureaucratic duplication and wasted money.

The last Labour government rebuilt our public services and made the country a much better place to live in.

We drove standards up and waiting lists down.

But too often we thought that a delivery state powered by choice and competition was the only answer to better and more productive public services. It isn’t. We forgot that what mattered was giving those who used and worked in our hospitals and schools a greater sense of ownership.

In 2010 David Cameron announced a different kind of statecraft with the Big Society. He said, ‘Today is the start of a deep, serious reform agenda to take power away from politicians and give it to people.’ But the Coalition is continuing many of the most centralising features of  New Labour’s approach, with none of its virtues.

It is salami slicing the NHS . Instead of bringing costs down and caring for patients, and it is wasting time, energy and money on what NHS Chief Executive, David Nicholson, has described as a costly distraction at risk of ending in ‘misery and failure’.

Michael Gove is not giving back power to local areas, he is centralising state power by running thousands of Academy schools from Whitehall.  The Conservatives have gone from Big Society back to no such thing as society.

Our country has suffered from decades of excessive centralisation and the failure of our political system can be seen in many of the scandals of recent years. The risk taking in the City. The phone hacking scandal. The neglect and abuse of older people at Mid Staffordshire hospital. The horsemeat scandal. When the market is out of control and the state unresponsive, the result is greed, abuse of power, money wasted and unkindness.

We won’t renew our politics or create a better society  from Whitehall. Labour in government will devolve power downward and build a new kind of state which is based on our values of responsibility, reciprocity and relationships.

Hilary Benn’s New English Deal will offer all English local government more powers and devolution to cover skills, job finding, housing and investment. Labour’s big English City Councils are already saving money by radically reforming services to tackle social exclusion. They are cutting costs by helping people to help themselves and taking a central role in creating jobs and growth by developing their regional economies with Strategic Partnerships, employment brokerages and the living wage.

We are changing politics from making demands on Whitehall for more spending toward people organising together to improve their communities and build resilience.

Government wastes huge sums trying to deal with the symptoms of social problems instead of investing small amounts to deal with the causes. We will invest for prevention to reduce the future burden on public spending. For example we can prevent an epidemic of childhood obesity and a future health crisis by low cost measures such as reintroducing the duties on schools to provide 2 hours of sport a week and lunches that meet healthy standards.

Early years intervention is key. Every taxpayer pays the cost of  educational failure and unfulfilled lifetimes on benefits. Manchester Council has shown what can be done with its offer of support for parents and children from birth to 5 years.

Many of the major social problems we face do not need more money. They need radical new ways to use existing resources, to frame regulations and provide incentives across local areas. We need to put relationships centre stage in service design and reform services around networks, households and co-creation rather than being delivered by centralised institutions.

Collaboration between organisations can end the fiefdoms and competition where money is wasted in duplicating activities. The CBI estimates that  delivering care closer to home for some patients could save the NHS up to £3.4bn a year.

Today I’m giving a speech at the Local  Government Association on how Labour will govern in 2015 if we win the election. Some will be sceptical. Labour talks local but has a habit of big government and top down command politics. There’s no money so there is nothing we can do. But lets remember our traditions. We grew out of the popular movements of self help and self improvement.

Our history lies in mutualism, cooperatism and organising. We gave political representation to working people by building political power in our English Cities. We gave millions pride and meaning when we spoke about the virtue of work and about conserving the local places  people called home. Our forebears built this country and made it a decent land to live in. They understood that politics is a struggle for power and they organised to win it,  not from the top down but from the bottom up.

And we will do so again because it is the only way.

Jon Cruddas is the Head of Labour’s Policy Review