Labour cannot shy away from the debate on public service reform

Within the Labour party there is continued disquiet around the ‘R’ word. It’s a word that evokes painful memories for some, and smacks of little to no ambition for others. The word in question? Reform.

For those on the left of the party, it looks and sounds a lot like reheated Blairism. There are concerns that it’s codeword for privatisation and a return to a free market approach to public services. Remarks from Wes Streeting last week that the NHS needs reform, not just more spending have, again, scared some of the left.

Before addressing these concerns, it’s useful to set out what this new era of reform might look like. Indeed, despite politicians’ refound love of the word ‘reform’, details of what that entails have been harder to find. A new essay from Demos seeks to put that right – sketching the contours of a new public services paradigm. The Preventative State, published today, supported by Local Trust, argues two fundamental shifts are required.

First, public services need to move further upstream; intervening earlier. For example, in Wigan, the council invested £10m in partnership with local people through a Communities Investment Fund. These projects helped the council to improve services and outcomes, adding seven years to healthy life expectancy in its poorest neighbourhoods, while life expectancy stagnated in the rest of the UK.

Crucially, to do this effectively, public services must become relational public services: recognising the importance of relationships and social capital to people’s wellbeing, working with them to improve people’s lives. This approach has been shown to work. Social prescribing, a form of relational public services, has had success in Rotherham. When the then local Clinical Commissioning Group invested in relational public services, inpatient admissions fell by as much as 21%. A&E
admissions fell by as much as a fifth and outpatient admissions reduced by a similar level.

Over five years, it is estimated that the local NHS would save around £1m a year – a return on investment of £1.98 for every pound spent on the service. But second, we need a shift beyond traditional public service delivery. That’s because to truly reduce demand for public services in the long run, we need to not only prevent problems from arising, but create the conditions for flourishing and resilience within communities. Achieving this means investing in those foundational goods which create the social capital that enables us to lead better lives, without state intervention.

The built environment in this plays a key role – the shared spaces of libraries, pubs, community centres, sports facilities – where people can meet and build social connections. There is strong evidence that access to high-quality green space drives better physical and mental health, including lower levels of obesity, for example. So that’s the thinking: a new public services paradigm centred on relationships, underpinned by stronger foundations in our communities. But why is this something the left should get onboard with?

First, calls for a paradigm shift in public services can be thought of as mirroring Corbyn’s successful and accurate calls for an economic paradigm shift. That was the Corbynistas’ great contribution to Labour thinking: that our current economic model is broken and we need a new one; a view now mainstream across the party and embraced by the Shadow Chancellor.

Inspired by this rethinking of the economy, Labour needs to begin a rethinking of public services, moving beyond narrowly focusing on spending levels. Second, a new era of public service reform is anything but a return to Blair. In fact, it’s a call for an explicit break. ‘New Public Management’, which guided public service reform under New Labour, brought free market principles of choice and competition into public services, recasting the users of public services as customers. In contrast, relational public services sees users of services as citizens, with an active role to play in the co-production of services.

In doing so, they seek to recast the relationship between the state and citizen, a relationship inspired now by democracy, not consumerism. That should be something the left can embrace.

Finally, and perhaps most importantly, it’s vital that defenders of public services engage with the debate about how public services are run. Why? The need for reform is obvious. Given this, the country will have a debate about reform of public services, whether you like it or not.

Failing to engage with that debate risks creating a void; one which the free-market hard-right will be more than happy to fill with more choice and competition. That must be avoided at all costs. Doing so will require a new cross-party consensus on public service reform; one which breaks from ‘new public management’ and outdated principles. Delivering that consensus begins at home: getting the whole of Labour, including the left, behind a new vision for public services.