It may have been ignored by the media amid the Tory leadership race, but Labour’s proposed “Local Public Services Act” is one of the boldest policies announced in recent years. The vision outlined by Andrew Gwynne and John McDonnell of fully-funded and accountable public services is critical to the future of the country.
Part of the clear red water between the Conservatives and Labour is a totally different view of how a modern economy works. For the Tories, it is all about the private sector and the “heroic entrepreneur” who builds a business on his (and it is always a “he”) own without the help of anyone. A fiction, but an ideologically powerful one.
Labour knows that the economy is a complex set of interdependent relationships. And this complexity makes the role of the public sector incredibly important as a place-shaper and strategic force in society. Good local services underpin our economy, from safe streets to good schools, and in return our economy must contribute to their funding. This is why it is Labour that has taken forward community wealth building in a way that is anathema to the Conservatives – and why Boris Johnson in his last speech to Conservative Party conference last year took time out of attacking his predecessor Theresa May to attack the “Preston Model”.
This is why the Local Public Services Act becomes so important. It might seem small, but it is actually a platform to show how a Labour future will be fundamentally different from a Conservative one. The Act must achieve a number of objectives. Firstly, we have to have a system that delivers high quality local public services. This is the most important objective, not only because people depend on these services but because it is morally the right thing to do. It is also critical because, as noted above, our economy depends on high performing public services. Without high-performing public services, we cannot have a high-performing economy able to fund further improvements and expansion of our public services.
Secondly, we have to increase the strategic power of local public services to shift our economy. This is where accountability becomes particularly important. We need to be able to bring the full power of the near £40bn that local government spends every year. Through this spending, we can influence local economies. We can do this through paying higher wages, forcing the private sector to pay higher wages if they want to get access to workers. We can do this through investing in skills and training for employees, so that we increase the overall skills base of the local community and boost productivity. We can do this through investment in green technologies and more energy efficient methods of working – bringing down costs for the rest of the economy. In short, we can use local public services to create a race to the top, not a race to the bottom.
But we also need to use local public services to show what we want the future of our economy to look like. This requires imagination. If Labour pursues a ‘conservative’ agenda on local public services – only focusing on a narrow concept of public ownership – then we will have missed a golden opportunity. John McDonnell has promised to double the size of the co-operative economy. Rebecca Long-Bailey has promised to put social enterprise at the heart of Labour’s industrial strategy. The Local Public Services Act must be used as a way that Labour can achieve this.
Social enterprises are already showing across a range of areas how new models can be created that combine accountability, employee engagement, innovation and environmental sustainability. From HCT and the Big Lemon in local transport to Five Rivers in fostering, Sandwell Community Caring Trust in social care and Catch22 in youth services, there is a range of models that have been shown to work and deliver high quality outcomes. Social enterprises blend together a public service ethos and public accountability, through their board structure and the legal mission, with employee engagement. They enable experts to take decisions in the best interests of service users and it is this empowerment which boosts productivity and quality. They are also paying the real living wage, with 78% of social enterprises doing so.
Independent of shareholders and investors, social enterprises focus on long-term needs, not short-term pressures. Moreover, all the money remains in the system, either being directly reinvested back into services or given to other organisations to deliver interventions that can best create community benefit. We can have independence without a loss of accountability.
This is a model that can work not only in public services, but also in the private sector. Arguably it is even more important in the latter, and – to borrow a tired cliché – Labour needs to be the change that we want to see. We cannot tell business to reform and try new approaches if we are unwilling to pioneer them ourselves. We must not replace the Tories’ coercive legislative regime with another that stifles the ability to communities to pioneer new economic models.
21st-century socialism, if it is to succeed, must move beyond binaries of “in” or “out” sourcing. We must have a bolder ambition to build a better society on a new foundation of well-funded accountable public services and a reformed private sector. To do this, we need to show collective ownership in a new light. A truly social ownership, acting in the best interests of people and planet, not merely Morrison 2.0. Social enterprises and co-operatives offer a road to a radically different future, in which everyone has a stake. The public is crying out for alternatives – let’s be imaginative and give them one.