After Beveridge: current questions in welfare reform – Simon Griffiths and Henry Kippin
The Observer journalist, Andrew Rawnsley, wrote that the ‘enduring question of British politics is about our public services’ – the things we collectively pay for and provide for each other: welfare, health, education and so on. In the UK, debates about welfare reform and the public services now provide some of the main points of conflict between – and within – political parties. Whichever party convinces us that it has the answers to these questions stands a good chance of electoral success. A poll before the last UK general election found that 71% of people thought that government policy on running public services would be important in deciding their vote.
These services are under threat. The threat is partly economic, exacerbated by the current downturn and the government’s response to it. But it is also due to the impact of a range of demographic, social, economic and environmental changes to the way we live, work and interact. For example, a recent report estimated a doubling of the UK’s population over the age of 85 between 2010 to 2030 and noted a need for a 37% real-terms spending increase on social care and continuing healthcare for older people by 2022 just to keep pace with demographic changes. In a recently published book, Public Services: a new reform agenda, we argue that it is time to rethink important questions about public services and the welfare state. Even if public spending were to be sustained, public services need rethinking to be fit for purpose.
From Beveridge to New Public Management
Britain’s post-war ‘cradle to grave’ welfare state – largely set up following the recommendations of the 1942 Beveridge Report – could, its creators believed, defeat the ‘giant evils’ of squalor, ignorance, want, idleness and disease. The modern welfare state was founded upon a series of specific assumptions:
- First, it was to be universal: every citizen would contribute and every citizen would benefit – it was not just a safety net to catch those in need. As Richard Titmuss argued, a welfare system for the poor is destined to become a poor welfare system.
- Second, architects of the post-war welfare state assumed that benevolent experts would organise services for citizens, largely administered nationally, in their best interests. As Douglas Jay, later a post-war Labour minister, wrote, ‘in the case of nutrition and health, just as in the case of education, the gentleman in Whitehall really does know better what is good for people than the people know themselves’.
- Third, in the early post-war period it was assumed that the general public could be relied upon to accept progressive taxation and to vote for parties that supported a growing welfare state.
- Fourth, it was also assumed that Keynesian economics meant that growth could be taken for granted. The economic depressions of the 1920s and ‘30s had been consigned to history. Questions about welfare and public services were, therefore, often about how to distribute the proceeds of growth.
All of these assumptions came under sustained attack during the economic crises of the 1970s. The debate about the future of public services increasingly began to cluster around a loose and diverse set of ideas, under the heading of New Public Management (NPM). The term signified a mixed bag of reforms aimed at promoting greater economy, efficiency and effectiveness through, among other things, privatisation, marketisation, and the development of public private partnerships. Aspects of New Public Management found their way into the reforms carried out by the Thatcher governments, and NPM approaches remained significant well into the 1990s and beyond. Advocates of NPM rejected many of the assumptions upon which the post-war welfare state had been founded. Emerging out of economic crises and the loss of faith in Keynesian growth strategies, its supporters argued that increased spending on public services would not continue to attract widespread electoral support. There were calls for the welfare state to be lean and selective, not ‘bloated’ and universal. At the same time, the assumption that public services were best run in the interest of the public by experts who would administer them from the centre was also called into question. Critics attacked the idea of the benevolent expert motivated by a public service ethos. Instead they saw public services ‘captured’ by producers and public sector bureaucracies. William Niskanen, for example, argued that public sector workers would follow their own interests, seeking higher pay and better conditions, rather than being motivated by a ‘public service ethos’ focused upon improving services for users. Advocates of NPM called on public services to be refocused on the citizen, who was empowered as a consumer, instead of the producer.
The New Public Management agenda has been widely criticised. As Christopher Hood observed, ‘most academic attacks on NPM have questioned NPM’s universality by focusing on the equity costs of a preoccupation with cost cutting and a focus on bottom-line ethics’. To its critics, the focus on economy and efficiency meant that NPM’s advocates knew, in Oscar Wilde’s phrase, ‘the price of everything and the value of nothing’. Today, as Colin Crouch argued, ‘all except the most extreme neoliberals accept that market efficiency does not account for the sum total of human objectives, and that a democracy has a right to establish alternative goals and parameters’.
Arguing that we must get ‘beyond’ New Public Management as a framework for public service reform, therefore, is not new. For Boyle and Harris,
previous approaches to the reform and improvement of public services have largely run their course. In some areas, they have produced important improvements, certainly. But our public services face an unprecedented set of challenges … Reform can’t confront these challenges effectively; radical innovation in public services now needs to move from the margins to the mainstream. The question is what analysis and principles should inform this radical innovation.
While it may be true, as Dunleavy et al argue, ‘the torch of leading-edge change has passed on from NPM and will not return’, it is far from clear what should take in its place.
We argue that it is time to rethink important questions about public services and the welfare state.
1) What should the relationship be between citizen and state?
Is the purpose of the welfare state to build solidarity between citizens, as Richard Titmuss and other post-war proponents argued, or should it simply provide a safety net to ensure social stability as neoliberals, such as Hayek, argued? Debates on future public services also include an exploration of citizenship in today’s society: the basis upon which we live together, interact with the state, and contribute to – and benefit from – public services. The needs, demands, expectations – and indeed lives – of citizens have changed greatly since Beveridge wrote. This changing context is precipitated by the confluence of broad societal shifts. Migration, new gender roles, and new patterns of inequality and exclusion continue to change the character and make-up of societies.
Citizens’ own expectations of public services have also changed during this period. Much has been written about a new ‘assertiveness’ or ‘querulousness’ of public service users. We demand more from public service professionals and are less willing to be treated as passive recipients of services or advice. Citizens’ very different expectations of the private sector – at best, tailored to each individual’s demands – are finding their way into their dealings with the public sector. Whilst this has benefits, it also has downsides. Some critics have argued against the ‘contemporary social evils’ of selfishness and individualism driven by economic liberalisation.
We argue that our new agenda must be grounded in a much fuller understanding of citizenship, learning from and moving beyond generations of public service reform that have often relied on singular and deterministic conceptions of how people behave and interact with the state and public services. This role has been periodically re-cast: from passive recipient after the War, to market-incentivised consumer under NPM. Today, the efficacy and sustainability of new public service reforms will be contingent upon a much more nuanced, multi-dimensional and fluid understanding of what we are as citizens, a much better understanding of how we interact with one another and how we make decisions within different contexts.
Contemporary policy debates are often focused on the interaction between service provider and user. This relationship is perhaps best couched in terms of co-production or co-creation; how can citizens, the state and civil society work together to produce better outcomes. Co-productive approaches can straddle traditional theoretical divides, avoiding overly passive accounts of the service user, although steering clear of potentially unsustainable demands on citizens. Using this approach, a range of think tanks are beginning to think creatively about new ways of leveraging resources and improving socio-economic outcomes from public services when public budgets are tight.
2) How should public services be structured?
Within the UK, the public service reform agenda (especially since the general election of 2010) has emphasised an ‘opening up’ of public service provision, with key reforms to health and education in particular preparing the sectors for new entrants into the provider market and reflecting, at best, an optimistic approach to the results that can be achieved by the private delivery of public services. The Coalition’s key welfare reform programme – known as the Work Programme – is perhaps the most obvious codification of this dynamic, bringing together a number of private and non-profit organisations as ‘prime’ and ‘sub’ contractors in the delivery of complex back-to-work services on the basis of large-scale payment-by-results contracts.
By contrast, twentieth century social democracy tended to favour the state, believing that politicians and civil servants in Westminster and Whitehall are uniquely able to pull the levers that create a more socially democratic society.
Peter Alcock has noted that increasingly the ‘mixed economy of welfare is both given and desired’, with a political consensus having emerged around the need for a diversity of service delivery models (although this is not always reflected within citizen opinion, as polls have shown). Rather than chose between market or state, we argue a focus on the wider ‘ecology’ in which public services operate would allow us to get beyond the market/state dichotomy. Responding to these changing relationships between citizen and state means engaging with the politics of public service reconfiguration. The metaphor of ‘an ecology’ is sometimes used to describe the relationship between the state, market and other providers. Ecologies need careful management, protection and long-term care. Under this view, the state provides support for certain activities to flourish (for example, civil society groups that offer specialist services that meet the complex needs of users or private sector organisations offering innovative approaches to a problem) whilst managing those areas where the ecology is less healthy (where the private sector dominates all else or public service providers are failing). The state manages the ecology, of which the market, social and public sector are interrelated parts. The state is sometimes involved directly, but often it facilitates, supports, nurtures or governs other organisations.
In public policy terms, this approach allows greater collaboration between and within public, business and social sectors in order to achieve its ends. This approach is being pushed forward in contemporary public policy by organisations such as Collaborate, which explores the conditions and conduct needed for collaboration to be a success between sectors, arguing that each have distinct expertise and capabilities. Under this view it is an empirical question which sectoral blend best meets social democrats’ objectives around the extension of freedom. When it comes to public services, one might call this a ‘melded’ or ‘blended economy’, with public, social and private sectors working together to secure particular aims, not simply a mixed one in which different sectors do different things.
3) How do we pay for public services?
What fiscal arrangements and resource trade-offs are needed to face the challenges ahead? The British economy changed beyond recognition during the post-war period, creating new challenges for public services. De-industrialisation posed new challenges for public services and made existing problems worse. The British welfare state now has to deal with the consequences of ‘vicious cycles’ of low pay and unemployment alongside a decline in collective (industrial) worker representation. In the UK, disadvantage and social exclusion have become more entrenched in some social and geographical communities – ethnic minority groups, young adults and families with children.
Many of these trends have been exacerbated by the economic downturn, which exposed the UK’s over-reliance on the financial sector. Just as in the 1970s, the current economic downturn provides a moment of reflection for public service providers and architects but few new answers about which way to turn. As Andrew Gamble has argued, ‘Politicians are still attempting to respond to this crisis within the intellectual frameworks that defined the orthodoxies of the past 20 years’.
In a context of austerity, much has been made of the imperative to get ‘more with less’, to generate unprecedented efficiencies and to find new ways to unlock the latent energy of citizens. None of this is possible if public services are axed or pushed to the sidelines. In a rebalanced economy, there should be a place for well-funded public services that help citizens and communities withstand social and economic shocks and to thrive over the long term. Without making the case for public spending as a social spine and an engine of social value and economic growth, we risk exacerbating inequalities, undermining local economies, and undermining our ability to meet the huge societal challenges of the future. Our public services are vital: they help us to achieve things we could not achieve alone, and support us both individually and collectively; yet what we want from them, and how we want them to be provided, is changing. It is these changes that we have begun to examine in this article.
The importance of welfare: concluding thoughts
Our public services are vital: they help us to achieve things we could not achieve alone, and support us both individually and collectively; yet what we want from them, and how we want them to be provided, is changing. Tomorrow’s public services must be relevant to an increasingly fluid, mobile and multi-dimensional society, with changing expectations and aspirations. As we look to new reform agendas, we must be open to different ways of understanding and engaging with citizens; designing, delivering and personalising services; and distributing and accounting for entitlements and benefits.
Dr Simon Griffiths is Senior Lecturer in Politics at Goldsmiths, University of London
Dr Henry Kippin is Director of Collaborate CIC and a Visiting Fellow of Queen Mary, University of London
 This chapter draws on material published in Simon Griffiths, Henry Kippin and Gerry Stoker, Public Services: a new reform agenda (Bloomsbury Academic, 2013)