One of the reasons Rachel Reeves wants faster growth is the taxes it generates and the possibility of spending them to refurbish the public sector.
It’s troubling that, seven months on from last July’s election victory, Labour is still struggling to piece together a coherent answer to the question: where should the government direct its limited funds to spur a surge in growth?
Physical assets, such as renewable energy projects, railways and health centres, are sensible destinations. Ministers are also rightly focused on improving skills and education.
No doubt these traditional routes for public investment in the hope of higher growth will be the basis of the chancellor’s budgeting ahead of June’s comprehensive spending review (CSR).
But what if the government’s investment portfolio included funding for a holistic approach to helping the near-400,000 people in Britain struggling to cope with life – those with three or more identifiable and acute problems who live from one benefit cheque to the next?
The extra expenditure could also target the million-plus people who have applied to see a therapist as part of the NHS Talking Therapies programme and have yet to start their first session.
As a form of public investment, it could be evaluated in the same way as building a new railway line – with the costed benefits stretching over the next 40 to 50 years.
A study by academics based at Manchester Metropolitan University shows that a relatively modest funding boost – perhaps redirecting money already deployed in the welfare system – could turn around the lives of many who struggle, allowing them to become engaged citizens, rather than victims stranded in poverty, debt and despair.
Strip away the target-driven assessment and deal with the many problems faced by those who are in dire need, and Whitehall will discover there will be two profound paybacks. It will release much-needed cash, because most of the people helped will not need the same level of support in subsequent years. And those around them who were hindered from making progress themselves – such as children in disrupted schools or family members who had to take on mental health caring responsibilities – can get on with more economically positive pursuits.
This may frighten Labour ministers wary of rightwing anger at “nanny state” solutions, yet the research shows that a more holistic approach could reap £50,000 for each of the 363,000 people on the acute list – £18bn a year in savings.
The project provides an antidote to finger-in-the-air, gut-feel, seat-of-the-pants policymaking. The fact that the academics named their umbrella organisation the “policy evaluation and research unit” tells us that. Their work also provides the evidence ministers need to win over a sceptical public – and to persuade cynical public sector managers who fear that cooperation is a way for other agencies to steal their time and funding (which is why they prefer to work in silos).
Toby Lowe, one of the Manchester Met professors who advises public sector organisations across the world, says we have arrived at a consensus that public management is not fit for purpose. “Public service offers a transactional relationship, such that when a customer shows up, the public service asks ‘How much public service should we offer?’” he says. “As people access the service, they are sorted and put on to one of a number of pathways.
“But there should be a whole-person relationship, and the public sector should ask the question, ‘What can be done for you?’”
Everyone knows it would be better for someone fallen on hard times to be treated with care and understanding. What is becoming clear is that it also makes economic sense when the cost to society of employing public servants to behave in this way has a quick financial reward measured in billions of pounds.
Thurrock in Essex is a bust council, but it still found a way to set up a “complex housing intervention programme”, which in its first two years saved £1m by taking a more joined-up approach to homeless people with a dual diagnosis of mental ill-health and addiction. The Manchester Met study identifies 35 similar instances where a more people-centred approach saved money without the use of targets.
Given a chance, most public sector workers would prefer to end the cycle of procrastination and responsibility-avoidance that characterises much of their day-to-day existence. They would like to see improvements in all aspects of the public sector, not least because they use public services like anyone else.
It’s the management culture that needs to change. There are experts inside Liz Kendall’s Department for Work and Pensions, Angela Rayner’s local government domain and the Treasury who understand that a government that is serious about tackling the intersection of low incomes and mental ill-health has not “gone soft”. It is a hard-headed route to more cash, not less.
Article by:Source: Phillip Inman
