The Week

The Week 2 June 2023

Parliamentary recess this week — and so a predictably slow week in our nation’s domestic policy debate. But Duncan Robinson’s Bagehot column in the Economist is worthy of a proper look.

The piece makes a compelling argument, and one that any reform-focused organisation (ahem) should ponder. We all rightly point out that there is no “magic money tree”, and that we cannot simply deficit-spend our way to perfect public services. But that leads us to another mythological figure: the “reform fairy”, which promises radical improvements in how the state works without the need for spending any extra money.

The article points to the NHS as an example where belief in the “reform fairy” might be counterproductive. We may (nearly!) all agree on the need to redirect resources toward prevention and public health — but surely that’s a non-starter while hospitals are fighting to work through backlogs and emergency departments are coping with winter demand crises? More money, the article argues, is ultimately going to be needed.

Robinson has put his finger on one of the fundamental challenges of policymaking. Short-term and acute interventions, in any policy area, are expensive in every sense. They preoccupy our attention, demand our resources. They’re also an immediate and brute fact that cannot be wished away.

Short-termism is the consequence. Our state gets trapped fighting fires when it should be building firebreaks, and we shouldn’t be surprised when the result is even more fires to fight next year, at even greater expense.

We need to expunge magical thinking of every kind from our policy debate. In the real world of policy, we must embrace trade-offs and recognise complexity. There’s no magic money tree — getting things right will cost money, and that will mean spending less on something else. There’s no reform fairy — but imagining that problems can be solved in a sustainable way by pouring cash into fundamentally inadequate systems is clearly absurd.

In our work on Reimagining the State, we suggest a different starting-point for such discussions. The state is in need of reform, not only structurally, but in terms of its basic relationships with communities and markets. It is uniquely positioned: it has the power and the mandate to help set the conditions for the other elements of a properly functioning society — it can ignore them, quash them, or enable them. If we want great social mobility, effective public services, a healthy population, and a flourishing economy with improving living standards, we have to set aside the idea that the state is the only possible vendor of any those outcomes. Mobilising citizens and communities to take on their own role in co-creating these outcomes will be key.

This does mean reform. Some reform will cost more at first, in order to help create a more sustainable system later. But don’t for a second imagine that there aren’t still a thousand ways to improve the system itself instead of just pouring money into it.

Onto our read of the week…

For some extra weekend reading, and a great example of where there’s need for smarter spending and reform as well as more investment overall: the Levelling Up, Housing, and Communities Committee’s report on Funding for Levelling Up was published last Friday, too late for us to include last week — but we think it’s well worth the attention of anyone with an interest in the Government’s beleaguered flagship local growth policy. In this report, we hear again that the various levelling up missions are being put at risk by the way that funding is organised and allocated. We at Reform analysed some of the largest explicit levelling up funds last year and came to the conclusion that a longer-term, more streamlined, and more devolved approach is needed. Now this committee report sets out how, despite commitments in the 2022 White Paper, there is “limited evidence” that progress has been made in reducing competitive bidding or simplifying the way funding is accessed. Most strikingly, Whitehall itself seems to be struggling to wrap its head around the challenge, with DLUHC saying it does not have “sufficient data” about the way different departments are spending money on levelling up.