Sorting out the public finances Part 1 : Changing the debate

This is the first of a 5 part approach to sorting out public spending. The later parts include: A fiscal turnaround plan for the UK regions whose deficits are much worse than Greece; Sorting out which generation should be paying for what.

Part 1 – Two ideas to change the debate about public spending?

It is no wonder that Western governments have got into such a fiscal mess – it’s almost impossible at the moment to have a meaningful public debate about the right overall levels of taxation and spending. There tends to be lots of fragmented debate about individual taxes (e.g. fuel duty, inheritance tax, personal allowances for income tax, bingo taxes, etc). There is an equally fragmented debate about individual areas of public spending (e.g. new roads, the police, social care, unemployment benefits, etc). But there is little meaningful debate about the right overall levels of taxation and spending – beyond the ideological preferences of the left and the right for more, or less, of it all. Nor is there any relationship in most people’s minds between what happens to particular taxes and what gets spent on particular services. This means that most people want to see taxes come down (especially the ones they notice the most) and public spending go up (especially on the services or benefits they most appreciate). In the absence of a proper joined-up debate, we drifted into the absurdity of 2009 where the Government was spending like a Scandinavian (almost half of our national income) and taxing like an American (little more than a third of our income). The result was the highest annual deficit of any developed country. Since 2010, at least, most people in the UK now agree that Government’s expenditure should not exceed its income. By 2018, after 7 years of painful austerity, we should achieve a balanced budget. It will be the first time in 20 years. But it won’t be job over. The pressures on public spending (e.g. from the ageing population) could easily overwhelm a less than robust tax base (e.g. falling revenues from fuel efficient, low carbon cars).

We need a better way to debate what we want Government to spend and what we’re willing to be pay in tax. It can be meaningless to debate how much in aggregate a Government should tax and spend. Whether it should take 20% of our income (as in Mexico) or nearly 60% (as in France) depends on the roles and ambition we give Government. There are some fixed elements of the current UK political consensus ( a universally free and high quality health service; free schools; a universal and meaningful state pension; redistribution of money to poorer areas; etc) which mean that public spending, and hence UK tax, will always be fairly high. Conversely, UK private spending in these areas will be relatively low (e.g. on private health). Sometimes the headline numbers for Government spending are so striking that they spark the debate – e.g. 20 years ago, the Swedish Government was spending two-thirds of national income, prompting a tough fiscal regime to get down to today’s half of national income; in healthcare, the US Government spends far more per capita on healthcare than the UK, in spite of our having the NHS and US government spend on health being less than half of the total public and private spend. In these extreme cases, it becomes clear that something must be done, but, as Obama has learnt, far from clear what solutions the public will wear. But with the UK’s extreme deficit now falling, there is a danger that public and political attention drifts away from the major fiscal challenges we still face.

Is there a fresh way to engage the public in this fiscal debate? I have two suggestions:

(1) Every public body (be that a Government department or a local public body) which spends money should raise its own income, by setting a tax which is clearly and exclusively linked to that public body. So rather than the Treasury raising all of Government’s taxes and pooling the funds, the Secretary of State for Health, for example, would set an NHS Tax to fund his proposed level of spending on the NHS.

(2) The level of spend for each service or benefit should be explicitly set, by each Government, as a percentage of our national income. This would allow a public debate about the priority accorded to the particular service or benefit, and how it compared to other countries. For example, this was how Tony Blair publicly set the ambition in the early 2000s that the NHS should receive 8% of GDP, to be in line with other rich Western countries. .

How could this type of hypothecation work? Let’s look at each proposal in a bit more detail.

(1) All the spenders have to raise their own taxes

This is a radical idea that would spell the end of the Treasury’s fiscal role as we know it. Under this principle any department or public body which spends money should be directly responsible for raising the money to pay for its spending. They would have their own specific and exclusive tax. The relevant politician would determine the level of the tax to meet their own spending needs. For example, the Secretary of State for Health would determine the NHS tax and be accountable for it, as well as the spending which it funds. Clearly, in central government each Minister would need to get Cabinet support for their proposal (as they do for all policy decisions), but it would be their decision on tax and spending.  Moving to this system may not be as hard as it sounds. It’s possible to align existing taxes with existing spenders, rename the tax to show its hypothecated purpose and give the relevant politician the power to take this forwards. 

– National Insurance could be renamed “NHS Insurance (NHSI)”. The current NI tax and NHS spend roughly balance. The nature of the NI tax ( a percentage of wages, paid through a mix of employer and employee payments) is very similar to health insurance payments in other countries. The Secretary of State for Health would determine taxation policy for the new NHSI – the amount to be raised, the balance of contributions between employers and employees and the progressive burden of the tax on different payers. 

–  Income Tax could be renamed “Pensions and Disability Tax”. This would include all payments to pensioners (State Pensions, Pension Credits, etc). It would also include DWP’s disability benefits (DLA, AA) and Local Government’s social care budgets. This spending would consume all of the income tax receipts. If the public recognises this, it should lead to a more grown up discussion about the affordability of our entitlements and the trade-offs between tax and spending. For example, if people understand that raising the retirement age by 1 year avoids adding 2p in the pound to the basic rate of income tax, we will have a better informed political debate. 

– Corporation Tax could be renamed “Income Guarantee Tax”. This would fund the cost of all employment-related benefits – tax credits, housing benefit for working age people, unemployment benefits, childcare support. This spending roughly balances with Corporation Tax receipts. Linking the two would illustrate the cost to taxpayers of having a minimum income guarantee. It would also make the point to employers that their taxes could be lower if they provided more and better paid jobs. 

– VAT could be renamed “Education Tax”. VAT receipts would be enough to cover pre-school, schools, further education, higher education, apprenticeships and adult skills. The level of VAT and, critically, the exemptions from it would be determined by the Education Secretary. This might assist a more grown up debate about some of the exemptions – e.g. the tax-free status of clothes for well-off children – versus the need to spend on children’s education. 

– Wealth Taxes and Business Rates could be renamed “National Security Tax”. The wealth taxes include capital gains tax, inheritance tax, stamp duty and share duty. Together with business rates, this would provide enough revenue to fund the budget for National Security spend, including defence, intelligence and the national crime agency. There might be two taxes – the property taxes (business rates and stamp duty, for example) set by the Defence Secretary and the wider wealth taxes (e.g. CGT) set by the Home Secretary – in order to get the funding split right.

Excise duties could be renamed “Investment Tax”. These revenues comes from duty on fuel, tobacco, alcohol and gambling. They would pay for future public assets, e.g. in transport, science, flood defences, business investment or social housing.This would tie a consumption tax on “bads” to investment in our future prosperity. This would give a new moral high ground to this tax base. 

– Smaller departments could, similarly, get their own taxes. For example, Airline Passenger Duty could be the tax base for the Department of Culture Media and Sport, as it would cover their costs and is linked to tourism, both in-bound and out-bound. Similarly, DEFRA could be funded by environmental taxes like the landfill tax and aggregates tax, or DECC by the climate change levy. 

– Council Tax in this system would more closely match local authority and local Police spending – as large elements of spending (in adults and children services would be funded through the national tax system e.g. via the Pension and Disability Tax). There would be some complexity (as always) to make sure that individual areas had the right funding.  

 

Some people will struggle with the idea of spending ministers being tax-setters. But how is the idea of a Defence Secretary setting a tax on property any different to a County Council Leader setting a tax on property to pay for adult social care? It promises a new type of political debate – as spending ministers may aim to be known as tax-cutters, or charges could be introduced to reduce taxes, or entitlements expanded in exchange for a visible increase in the tax, etc.

2) Setting spending targets for each service or benefit by percentage of national income.

Clearly, it is important that whatever money is allocated to a service or benefit is spent well. Spending more is not necessarily a good thing – if money is wasted, or could be better spent elsewhere, or better spent by someone other than Government. Similary, spending less is not necessarily a bad thing – if the same or better can be achieved with less, or if there is something better to do with the money. However, it is also true that, assuming it is spent efficiently, the level of public spending on a particular service or benefit is an expression of our collective priorities and expresses our values. Firstly, it shows how much of our private income we’re willing to give to Government for a specific service or benefit. Secondly, it shows how much we value one thing over another. So, for example, we are spending about 2.5% of our national income on defence. This is roughly half the proportion of income spent by the US, but roughly double the proportion spent by the Germans and Scandanavians. By contrast, we spend just under a fifth of our income on social protection (pensions and welfare payments), compared to the Americans who spent less than a tenth, whilst the French and Danes spend a quarter of their income. David Cameron promised at the last Election to increase overseas aid spend to 0.7% of our national income, which has been achieved in spite of the austerity budgets and makes the UK the first western country to hit this international target. The UK has poor levels of private sector investment in R&D. This depresses our total spend (public and private) so that the proportion of our national income spent on R&D is roughly half that in Japan and some Scandanavian countries, as well as being a long way behind the US. This puts pressure on Government to compensate for low private levels of investment. So, for governments, these sort of decisions are partly a matter of keeping up with our competitors, partly an expression of political priority and partly a pragmatic means of controlling spending. There are 3 elements to this allocative decision:

(a) How much of the national income ought a country like ours to be spending on an issue, e.g. providing pensions;

(b) How much of that total spending should come through the tax system, e.g. balance of state versus private pensions;

(c ) How much can be afforded by the taxpayers at  a given time, e.g. the level of state pension that can be afforded. 

There are 6 big fiscal decisions which cover 90% of the debate :

(i) Collective funding of health services

(ii) Provision of State Pensions and Disability Benefits

(iii) Guaranteed incomes for working age individuals and families

(iv) Collective funding of education, from pre-school, through school to colleges and universities

(v) Scale of investment in national infrastructure

(v) Scale of economic investment, e.g. R&D, skills,  (including the cost of tax reliefs as well as spending)

(vi) Scale of our international commitments in defence, diplomacy, aid and national security.

Wouldn’t it be refreshing if the next Election was an explicit debate about the proportions of our national income we should devote to each of these areas and how much of that should be via the tax system? This would require an unprecedented engagement of the public in setting fiscal priorities – tax by tax, spend area by spend area. It would make explicit that getting more services or benefits requires taxes to go up, and vice versa. It would also force the ideologues (big spenders, little spenders) to argue specifically the rights and wrongs of taxing and spending for a particular service.

If we combine these two ideas together, then we will have individual politicians (central and local) accountable for raising enough tax to fund their individual services and benefits. And, hopefully, we will have reconnected the public with the fiscal choices they face – getting them to take more responsibility for either reducing spend or raising taxes to pay for what they want.

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Are environmental groups guilty of crimes against humanity?

Environmental groups like to argue that they are protecting the planet against the crimes of humanity. But is it time to turn the tables and ask if it is they who are committing crimes against humanity with their misguided impact on global development? 

Over the last few decades, environmental groups have had a major impact on global policy. Some of this has been well judged and effective. For example, England’s recycling of household waste has improved from 11% to 43% in the last decade. In the same period, the average carbon emission of new cars in the UK fell by 30% and is set to have halved between 2000 and 2020. Similarly, new cars have become 25% more fuel efficient in the last decade and lead has largely disappeared from petrol. Ozone damaging CFCs have virtually been eradicated, meaning that the ozone layer should fully recover from the earlier impact. The success stories have common features: a mix of consumer price rises and regulation has stimulated a competitive private sector market to respond with new technology that efficiently addresses the environmental goal; the environmental groups have stuck to straightforward environmental issues (not confusing them with bigger ambitions to bring down capitalism or turn the tide on consumption) and they have not been prescriptive about the solutions. But on the big global issues (such as climate change) the environmental groups have not only been ineffective, they have set the wrong agenda and, tragically, got in the way of the effective solutions which are so badly needed. In doing this, they have alienated popular support for environmental change and, much more importantly, they have done great harm to the lives and prospects  of billions of people. 

If we are to consider a charge sheet for crimes against humanity, then let’s look at 3 issues where the prosecution may have a prima facie case – agriculture, energy and greenfield development: 

1) Agriculture
If (like me) you are prepared to accept an international scientific consensus, then it is clear that GM crops are safe. To quote the American Association for Advancement of Sciences: “The science is quite clear: crop improvement by modern molecular techniques of biotechnology is safe. The WHO, AMA, UN Academy of Sciences, British Royal Society, all …come to the same conclusion…it is no riskier than conventional plant improvement techniques”. In 2012, the UK’s Chief Scientist said “It would be irresponsible for us to turn our back against the environmental and development benefits of GM and other agricultural developments of GM … at a time when the planet desperately needs these breakthroughs for sustainable development”. And yet no GM crops are grown commercially in the UK. Not one. The EU has only ever approved 2 GM crops for commercial use, in spite of the EU’s Chief Scientist saying that there is no single case of GM crops having an adverse impact on humans, animals or the environment. Does the protest against GM matter? Well, it matters more than almost anything. Let’s take some examples. Vitamin A deficiency is a major health problem in much of the world – leading to both blindness and death for children. Golden Rice is a strain of rice genetically engineered to have a high beta-carotene content to meet Vitamin A needs. Because it is a GM product it has been bitterly opposed by environmental campaigners. It was developed in 1999, but 15 years later it has still not been grown commercially anywhere in the world. Since 1999, 7m children have either died or gone blind due to Vitamin A deficiency. In a world where more than 1 billion people go hungry each week and which may have to almost double its food production by 2050, it is a big deal that 30% of the world’s crops are destroyed by pests. GM either has solved or can solve most of this problem. For example, an English firm has developed a strain of wheat which emits a deterrent to aphids and the same chemical attracts aphid predators like ladybirds. However, attempts at field trials were thwarted by environmental protesters. There are lots of exciting developments in the pipeline specifically tackling devastating crop diseases in Africa in cassavas, cowpeas and bananas. Where GM crops have been adopted (e.g. in cotton) the use of pesticides has been dramatically reduced.  In a world in which water shortages are arguably the greatest threat to development, it is vital that biotechnology ensures that crops need less water, given that 70% of all water use is for agriculture (and in some developing countries it is 90%). The Gates funded work on Water Efficient Maize for Africa (with a GM crop that can sit out a drought and wait for the rains to come rather than going to waste) is just one example of a major game changer. So why do the environmental groups stand opposed to the scientific consensus that GM crops are safe and essential to sustainable development? (Indeed the same groups use the argument that the scientific consensus is beyond doubt to  fiercely attack any dissident voices on climate change.) A quick look at the Greenpeace website reveals the reason. The top issue they identify in agriculture is that 10 corporations control 70% of the seed market. If you read the anti-GM propaganda from environmental groups it is clear that the opposition is motivated more than anything by hatred of both capitalism and large multi-nationals. Instead, a vision is put forward of retaining small scale organic farming in much of the world. This flies in the face of the success of intensive large scale farming – if we tried to produce today’s world’s food output with 1960 technologies we would need to farm an extra 3 billion hectares, a landmass equal to 2 South Americas! The environmental antipathy to global capitalism can look benign unless you look at the analogy of other science-based industries. For example, the pharmaceutical industry relies on the potential of a multinational corporations to make global profits from new drugs to fund long-term, expensive and high risk research into medicine. Imagine if the environmentalists had opposed the commercial use of pharmaceuticals with the same arguments they make against GM – “we shouldn’t mess with nature”; “traditional medicines will be displaced by multinationals and their aggressive roll-outs of new profitable drugs”; “trials should be prevented”; “it is better that people avoid cancer by changing their lifestyles rather than being given chemical cocktails to attack the disease”; etc. The parallels are chilling. So, if we are happy to use bio-technology to create medical products to put in our bodies, surely we should be happy to do the same with food? For the last 10,000 years we have been genetically modifying foods, as plant and animal breeders have selected the genes they want or don’t want. Now we can do it quicker and more ambitiously; now the world can’t wait; now we should get on with it. 

2) Energy

The environmental groups have scored some spectacular own goals on energy. The climate change treaties have seen the West’s production of carbon fall. But its consumption of carbon has risen sharply. The treaties imposed production targets on the West but not on the developing and emerging economies – as they were driven by a Western guilt-trip, rather than a comprehensive solution. So the West has outsourced its production of carbon to the emerging economies. The result has been the worst of all worlds. The emerging economies have produced our goods in a more polluting way than we would have done ourselves – burning coal and generating unabated pollution. Any rational analysis would before the treaties would have shown that the biggest threat to the environment always comes from newly industrialising countries. Over time, industrial countries reduce their pollution through abatement and efficiency. For example, the high income countries reduced emissions per dollar of GDP produced between 1940 and 1998 by 90% for sulphur, carbon monoxide and volatile compounds. But China is burning nearly twice as much coal to produce a dollar of GDP as the West. (However, Chinese cities are better than Japan’s early development, where for example its cities were 3 times as polluting as Beijing and Shanghai today.) The hard numbers on the treaty failures are bracing. Since 2000, two-thirds of carbon emissions have come from China, which uses 2.5 times as much energy to produce industrial goods as Germany. By 2015, China will emit twice as much carbon dioxide as the US. Not only have the climate treaties been disastrous for carbon emissions, they have been destructive for the people of the emerging economies. In northern China, for example, life expectancy has been reduced by more than 5 years by air pollution. India has the worst air pollution in the world and two-thirds of the 20 worst polluted cities. Meanwhile, in Europe, the environmental groups have focused on the rapid adoption of renewable energy generation. They have willed the means, rather than the ends. Rather than relying on carbon prices and regulation driving private sector solutions to reduce carbon, the environmentalists have insisted on European law mandating renewable energy in short order. This flies in the face of how markets respond. Governments have been put in a weak position – as market takers they are trapped into buying today’s very high cost, very ineffective renewable solutions. In the UK, this focuses on rushing into very expensive off-shore wind, signing up to long-term contracts which cost 2 or 3 times as much as gas power. But more worryingly, the energy produced is unpredictable and often not available. For example, in the middle of November in 2012, Germany found that its combined wind and sun renewables (which are meant to cover different weather) only produced 4.8% of the energy of which they are supposedly capable. So as well as the expensive renewables we will have to build a parallel energy industry (based largely on carbon) to produce reliable energy. In the rush to renewables, the green groups encouraged the burning of timber. In the UK, the Drax power station has been converted to annually burn more than the UK’s entire output of timber. Meanwhile, in Germany, a third of renewable energy comes from burning timber and it looks like 20% of German land will be used by 2020 to grow biofuels. In the US, 40% of the corn crop is used for fuel. Late in the day, the environmental groups have seen the devastating effect of biofuels production on forests and food-growing farmland. They have also conceded that the carbon neutrality of burning trees (e.g Drax burns 165 square miles of trees each year) is only true over hundreds of years. In terms of the climate change crisis in the next few decades, burning trees for energy is making things worse. Against this domestic introspection, little has been done to urgently endow the world’s poorest with the energy deserve. The people of sub-Saharan Africa currently use only 1% of the energy per head as the west – each day, their total use of energy is equivalent to lighting a single bulb for 4 hours a day. In parallel, the environmental campaigners have iPhones whose mobile computing etc uses the same power per year as a refrigerator. We clearly need a new type of international treaty on energy – one which urgently reduces the burning of coal by India and China (replaced by ample supplies of gas, which uses half the carbon of coal); one which stops wasting hundreds of billions on today’s weak renewables and instead channels those massive resources into R&D to push forward with new technologies that can really solve the problem, e.g. nuclear fusion; one which acknowledges and accelerates different solutions in different countries – e.g. solar for Africa and the Middle East, nuclear for high income countries, gas for the US; etc. But this will require the environmental groups to acknowledge that: the world has an ample source of energy resources; that we should promote more energy use in the world to improve the lives of the poorest; and that the legacy we want to leave future generations should focus less on the depletion of resources and more on the new technologies we invent to power the world, sustainably.

3) Use of land
The Council for the Protection of Rural England is currently campaigning against the potential use of greenfield land for new homes. It opposes greenfield development. It believes that any new housing should be inside existing city boundaries. It has spent a huge amount of time looking at the actual and emerging Local Plans for local authorities across England and believes that up to 500,000 new homes might be built on greenfield land over the next 20 years. The majority of these greenfield homes are not yet approved. But the CPRE’s screaming headline is that this could consume 150 square kilometres. But England has 130,393 square km – so that it is just 0.1% at risk. Even if all the new homes were put in the South East (which they won’t be) it would be a lot less than 1% of the South East. Even if all of England’s new greenfield housing went into Wiltshire it would only use 4% of the county! It is true that England has one of the highest population densities in Europe. It is also true that with a growing population and immigration people are feeling that the country is full. But the truth is completely the opposite. Let’s look at England first, then the UK more generally. Nearly 11% of England is now urban. That means that 89% is not developed. But even this exaggerates the concreting over of England. 80% of urban areas are not built upon. Just over half of all urban areas is green space ( parks, sports, etc), a fifth is gardens and 7% is waterways. So the percentage of England which is built upon is just over 2%! If we look at the wider UK, less than 1% of land is built upon. Indeed, even if we look at the percentage of the UK which is urbanised in any way (including parks or rivers in towns) it is just 7%, compared to 13% which is now woodland. (Woodland is now at the highest percentage since records began 90 years ago.) The numbers matter. The UK has a full blown housing crisis.  Home ownership rates are plummeting; 3.3m young adults (20-34) live with their parents; we have the smallest new homes in Europe; demand for housing has been double supply for decades; rents consume half of many people’s incomes. Worse is to come – the number of English households will rise 20% in the next 20 years.  The solution is simple – build more houses. More houses means giving up greenfield land. Clearly we have plenty to sacrifice. And a very little sacrifice would have a dramatic impact. If the CPRE’s figures are correct, then, pro-rata,  a 1% sacrifice of greenfield land would allow 5m new homes in England, which is more than enough for the next 2 to 3 decades. The uncomfortable truth is that the CPRE and others of their ilk are hoarding the countryside for themselves – keeping their house prices artificially high, excluding others from enjoying their natural environment and avoiding the UK’s social diversity. As well as the millions of people who are denied the chance to have a home of their own in the areas they would like to live, the political effectiveness of the environmental groups has a detrimental impact on those who live in urban areas. The insistence on turning all urban brownfield sites into hyper-intensive development means that cities and towns are unable to convert these sites into green areas (e.g. new parks, new wooded areas) to improve the quality of life of the rapidly growing urban populations. The hysterical opposition to greenbelt development means that low grade land around cities is protected, whilst commuters are forced much further away from the city to the other side of the greenbelt taking higher quality landscape to meet their housing needs and then creating commuter congestion as they drive back into the city. Our two most promising small cities for economic growth, Oxford and Cambridge, and the prospects of young people in those cities are hobbled by this environmental policy. Clearly, the development of greenfield land needs to be very carefully managed. I am not calling for a free-for-all. But just think how our most beautiful landscapes are enhanced by the sympathetic towns in them – imagine how our environment would be degraded without the built beauty of Bath, Canterbury or Durham. Indeed, the most apparently natural landscapes in the UK are anything but – e.g. the Lake District is a deforested area, subject to intensive over-grazing which has eroded the whole area of its natural state. And its full of villages and small towns. But, my, it’s stunning. Giving up 1 or 2 percent of England’s greenfield is the right price to pay for transforming the lives of millions of people. 
Having looked at just 3 areas where environmental policy is working against the best interests of humanity, it is clear that a prima facie prosecution case can be constructed. I say this as someone deeply concerned about the world environment (e.g. I gave up eating meat 30 years ago because it is about the worst thing for the planet). To reform the environmental movement, the first step is to ensure that we spot and call-out the environmental lobby’s grinding of other axes – be it anti-capitalism or self-interested house price protection. But the second step is challenging those who put preserving the natural world before the needs of people. Some of the environmental agenda verges on pantheism, creating a guilt that any conversion of nature to human use is a desecration of something which is worth much more than human need. But with 9 billion soon to be on the planet, we have to focus on how the natural world has to meet our needs as humans. (We can’t avoid having 9 billion people, it’s now inevitable). We should switch our focus onto how to get the most out of the natural world, in the most equitable, imaginative and sustainable way. That means moving to a debate which is more rounded (how we best develop the world, not just how to protect nature), more optimistic (using and accelerating our science and technology breakthroughs) and fairer (ensuring that the richest people and countries give the poorest the best chance to attain what they already have, be it food, energy or homes). Any sentence for crimes against humanity should be suspended to allow for future good behaviour.

An answer to Benefits Street – Getting everyone to put in a shift

“Benefits Street” has thrown down the gauntlet. Whatever your reaction to the programme, you must want a response. We can’t go on like this. Some viewers are absolutely outraged at the residents. Some are profoundly moved by their circumstances. But there is no doubt that many of the residents are leading miserable lives and that the current system is neither forcing nor helping them out of their desperate circumstances. The longer people fall out of the mainstream world of going to work and earning their own living, the harder it is for them to get back into it. We need a new approach to stop people falling away and to help those who have fallen away some time ago to get back into the world and re-establish themselves.

A new approach to assisting the unemployed must tackle the following 5 issues:

1) For unemployed people who want to work but can’t find work, or are even unemployable, it is deeply upsetting and frustrating to be labelled as idle and scrounging. A new scheme must give these (many) people the chance to prove beyond doubt that they are willing to work and to improve their employability.
2) Being out of work for more than a few months is scarring. Individuals lose confidence, health deteriorates and working habits are lost. Biological research shows that long-term unemployment shortens life – the telomeres which prevent our genetic code degrading are shortened. Employment prospects drop. As employment in the economy grows it does not mean that all unemployed people will find a job. Whilst 450,000 more people are in employment in the UK than a year ago (Nov 2012-Nov 2013), unemployment only dropped by 172,000. The good news is that 50% of unemployment claimants get a job within 96 days. The bad news is that 50% don’t. A third of the unemployed have been out of work for more than a year and a fifth for more than 2 years. A new scheme must ensure that no unemployment claimants have to spend more than 3 months out of the workforce.
3) Unemployment is a revolving door. In 2012, over 40% of new claims for JSA where from people who had claimed it in the previous 6 months and 50% had claimed it in the last year. Any new scheme needs to recognise this by incentivising people to stay in employment.
4) We need to end the opportunity for fraud in unemployment benefits where claimants are working in the grey economy. The DWP estimates that less 3% of spending on unemployment benefits is fraudulent. Anecdotal and tabloid arguments imply that this figure is 10 times higher. The truth is that no-one knows – or they would act on it. One way to tackle this would be to have a scheme for the unemployed which prevented work in the grey economy by occupying their time doing something different.
5) The reductions in public spending have squeezed the ability of local authorities and the funded voluntary sector to tackle important local community issues. There is less money for adult social care, youth services, libraries, sports and leisure services, environmental maintenance, litter collection, etc. A new scheme for the unemployed should help put people to work in these areas.

My proposal is called “Community Shifts”. It is about unemployed people being able to say that they “have put in a shift for the benefit of their local community” and are therefore entitled to that community’s financial support. The scheme has these features:

a) Unemployment benefits would only be paid for 3 months (in any 12 month period).
b) After 3 months, claimants would earn their monthly benefits by completing a number of “Shifts” within that month. A Shift would be an 8 hour day of supervised work.
c) To achieve their full benefits, people would need to complete 15 Shifts per month. They would be paid per Shift.
d) They would have the opportunity to complete more Shifts. If they complete 20 per month (i.e. 5 more days), they will earn a bonus worth one-third of their benefits. They can do this for up to 3 months. The total bonus would therefore be equivalent to one month’s benefits. However, they would only be paid this bonus once they have a proper job and stay in it for 12 months.
e) The Shifts would be made available by their Local Authority, which would have a statutory duty to provide sufficient Shifts to meet the needs of all claimants who have been out of work for more than 3 months.
f) The Shifts could only be for public sector or not-for-profit organisations. It is expected that people delivering the Shifts would be working within the existing management structure of an organisation. This would keep the cost of the new scheme very low.
g) Local Authorities would consult widely on what work the local community most wants to see happen.
h) Welfare to Work providers would provide job-search and up-skilling to be accessed outside the working time devoted to the 15 Shifts.
i) Lone parents would have the same access to childcare support as those in low-paid work. This includes both school and nursery guarantees, but also the monthly allowances for childcare payments.

Why 15 Shifts per month? Let’s assume that unemployed people could be working 4 days per week (leaving at one day for job search and up-skilling, on top of evenings and weekends) and for 45 weeks of the year (an equivalent working year to most people in jobs). That would total 180 days. If those days were worked over a 12 month calendar year, that would mean that people did 15 days per month. In an average calendar month there are 22 working days (assuming a 5 day working week). So this leaves 7 days for job search, improving skills and or breaks from work. Giving a monthly figure aligns with the new monthly approach to paying benefits under Universal Credit. The 15 days could be worked in different patterns – e.g 3 weeks of 5 day weeks, followed by 1 week doing something different; or 3 weeks at 4 days and 1 week at 3 days; etc.

How does the money work for an individual or family? To work out some simple figures, let’s take advantage of the simplification coming in through Universal Credit and look at those rates. The figures include standard allowances and housing benefit. A single person over 35 in the private rented sector in the Midlands will receive about £650 per month. A lone parent with 2 children in a social home in London will get about £1200 per month. A couple with 1 child in the private rented sector in Newcastle will get about £1400 per month. Each Shift would be worth 1/15 of their assessed benefit entitlement. In very simple terms, a couple with children on £1500 per month, would earn £100 for each Shift completed. A single person over 25 would get more like £50 for each Shift. If they worked less than 15 Shifts, they would lose £100 (family) or £50 (single person) for each shift not completed. (Clearly, they would not lose money if they were sick and unable to do their Shift). To get their bonus, people have to complete an extra 5 shifts per month. For the couple  getting £100 per Shift, that would be an additional £500 for that month, However, this would not be paid to them during unemployment. Instead, it would be retained by DWP. The person would be allowed to earn this bonus for up to 3 months, giving a total for our couple of £1500. The single person in our example could earn £750. The sum would be paid to them when the claimant has been in employment for 12 months. This would create an incentive to take a job, stay in the job for a year and then, perhaps, pay for a holiday.

What does it look like for a local authority? Let’s assume that it requires 1m places every year. (Roughly half of the unemployed). There are 430 local authorities. So each authority would need to provide about 2,000 places per year. It might mean 1,000 people in their area on the scheme at any one time. The authority would have a statutory duty to have a sufficient supply of places available. This would require a major dialogue across their local area to create and maintain places, involving the public sector (schools, civil service, council departments, health bodies, fire safety, etc) and the not-for-profit sector (housing associations, charities, voluntary groups, etc). There could be a wide range of white collar and blue collar Shifts available, ranging from basic manual work to highly skilled professional and managerial roles. Authorities would receive funding to manage the scheme and pay out-of-pocket expenses to claimants. This would be diverted from existing welfare programmes which would have much less to do once the unemployed were completing 15 Shifts per month.

What would be the impacts? The number of claimants of out-of-work benefits would fall substantially. It is clear that some unemployed claimants who are working in the grey economy would stop claiming, as the 15 shifts would make it hard to hold down most jobs. There would be another group who currently find the jobs on offer in their local area unattractive, perhaps because of pay or job type, but who may change their mind and take these jobs because they would prefer it to doing Community Shifts for just their benefits. There would be large numbers of individuals who were able to re-enter the labour market and get jobs because their Community Shifts had given them new work experience and a track record of work. But as well as reducing unemployment benefit costs and helping people to get back into employment, it would also help to restore public confidence in the welfare system. There is no place for idleness in this system and little for fraud. Communities would know that people on out of work benefits were “putting in a shift” – and they would see the benefits of this in the improvements in their local community services.

Personally, I found the human stories in Benefit Street profoundly moving. Equally, I found it infuriating that people could have drifted / been allowed to drift so far away from a normal working life, where they would be making a contribution rather than just taking from others. But worst of all are the reactions to the programme. The resentment is mutual and uncomprehending – the outraged taxpayers resenting the apparent idleness and easy money of the Benefit Street residents; the outraged benefit claimants wanting taxpayers to know that they are not idle or living an easy life. Whatever the current truth, Community Shifts is a way to abolish this resentment and make welfare support self-evidently a “something for something” culture, not a world of “something for nothing”.

Is this the perfect 2015 Election promise?

I have a simple, single sentence promise to be adopted by whichever politician wants to win the General Election in 2015. I suspect that by transforming the lives of most households in the UK within 2 years of the Election, this promise might win the 2020 Election too!

The perfect 2015 Election promise needs to tick the following boxes:

– Address the cost of living crisis, especially that faced by hard working, but low income families

– Capture the imagination of women voters, especially those aged 30-45.

– Show that the political party is on the side of ordinary families against vested interests

– Reverse the view that the next generation will not have it as good as their parents

– Produce a trump card that shows we know how to win the global economic race 

– Be quick to happen, with a simple lever pulled in Whitehall, and most households having their life transformed within 2 years. 

– Not cost too much, but where it does cost more that money needs to be an obvious investment in the future

– Prove that politicians can do big things that matter in the real world, and quickly. 

A daunting checklist – but there is an answer staring us in the face. What about this for a simple manifesto promise – “From September 2016, all state funded schools will, by law, provide 45 hours of education per week for 45 weeks of the year”. This increase by two-thirds in the time that kids spend at school is designed to allow all parents to work full-time without the need for additional childcare. The average employment leave would cover all school holidays. The average working day would give most parents the chance to do a full time job, in between dropping off and picking up their kids. It introduces the length of day and school year which has been shown to have dramatic results on kids’ education in the US. It gives teachers the same sort of working week and annual holidays as other hard working professionals. It’s disruptive enough to be a real game changer in education, in employment and the economy more generally. 

We will come to the education arguments (and the teacher fury) in a moment. But the role schools play in our national and family life is far too important to leave to teachers. And it’s certainly too important to leave to their knee-jerk, as opposed to thoughtful, responses. So let’s focus on some of the non-educational arguments first. Top of the list is allowing more women to work and more women who work to work more. Women working is vital to our economic growth. There are estimated to be at least 1m more women who would work if childcare was easier. That’s a big boost to our workforce, not just in quantity, but critically in quality given the numbers of highly skilled women not working, or not working full time. Four out of ten stay-at-home mums want to work and a fifth of mums who work want to do more hours. Only just over half of single mothers work, compared to nearly three-quarters of mums with partners. 70% of working mothers earn the same as the father or more. This is a big issue for lower middle income (LMI) families (those whose situation is superbly covered by the always excellent Resolution Foundation). Over the last few decades, male breadwinners in LMI families have brought home less and income growth has depended on in-work benefits from the State and female employment. We have passed the high-water mark of what benefits can be expected to provide. So we need to focus on boosting female employment. This grew strongly in the 1970s and 1980s, but went nowhere in the 1990s and 2000’s.  Women are now half of the workforce, but 42% are part-time, compared to just 12% of men. Part-time women earn on average £8.12 per hour (vs full time on£12.00), but this means that 50% earn less than £8.12. As well as tackling low wages (see my post on the Minimum Wage), the best thing we can do to relieve poverty and the cost of living crisis is to help more women work more. Two-thirds of women say that affordable childcare is the biggest barrier, with 40% citing it as the main barrier. Full-time school should provide all the free childcare that most people could want. Imagine if, of the 5m women working part-time for an average of 18 hours per week, 20% worked 10 hours more (as they tell pollsters that they want) and 1m mums who don’t work also started working, with half being full time and half doing 18 hours per week. That’s 2m mums working more, 1m full time equivalent extra workers. This would give the UK the same sort of female employment rates as the Scandanavian countries. The State would save money – it wouldn’t have to pay parents for school age childcare costs (through all its existing vouchers and credits) and of course, it would have the tax revenues of the new workers, it could expect parents on benefits to work more. The non-educational benefits go much further. Just one example is telling. 30% of all youth offending happens between 3 and 6pm each day, in the period between school finishing and parents getting home. Full time school would eliminate this period, the peak period of youth offending. 

But is it really a good idea for kids to spend so much time at school? The key answer to that question lies in what they do with the time at school. But first, let’s check the numbers. The 45/45 school year equals 2025 hours. 45 hours is 9 to 6, or 830 to 530. Assuming 8 hours sleep each day, a kid has 5,840 waking hours each year. That means kids would still only be at school for about a third of their waking hours. Put that way, doesn’t it seem half-hearted that they currently only spend about a fifth of their waking hours at school? A two-thirds increase in education still only equals a third of a child’s time. So in numerical terms, it is clearly not too much. What about the quality of the experience? We know that the current curriculum is overloaded. In most Western countries there has been huge change in the curriculum in the last couple of decades, but no increase in the time  available. The UK positives are that more time is spent on English, Maths, assessment and (for older kids) vocational subjects. But in the zero sum curriculum, time spent on other subjects has declined to make room. The shortage of teaching hours also means that the teaching moves too quickly – there is lots to cover, not much time to explore it deeply and rarely time to help kids play catch up if they didn’t get it first time. Teachers are stressed, children are rushed and learning is frustrated. We also know that the long school holidays impact badly on kids’ progression. This impacts most badly on poorer kids. Malcolm Gladwell showed, in Outliers, that poor kids make the same progress as better-off kids during the school year, but they stagnate during the long holidays, whilst better-off kids continue to progress. The main advantage enjoyed by better-off kids in education is that they need school less than poorer kids. I can remember being infuriated by my (then) 8 year old daughter’s school which refused to set any homework activities as “they only help middle class kids, so out of fairness we don’t give homework to any of the kids”. The levelling down stills sends a chill down my spine, but we could address the point by levelling up. Having a longer school day allows for homework to be both set and completed within school hours, like the “prep” in the poshest of schools. Let’s not forget that the better-off will help themselves to more education. There are the elite boarding schools. Then there are the private day schools with 8 hours a week more teaching, plus often Saturday lessons and / or sport. In the state sector, there is the booming industry in tutors. In Japan, for all its schooling, 45% of kids over 14 are spending an average of a further 5 hours per week at the Juku, getting private tutoring. 

It is often said that we should only make a move like this if we have evidence. Well, to a point. The current UK debate is missing even that point. There is a lot of flailing around comparing international countries, their education success and the amount of schooling they get. There has been a recent flurry of comparing UK school hours to those who do better than us in international educational tests. But it is impossible to isolate just this one variable when comparing UK or US educational outcomes with, say, South Korea on the one hand and Finland on the other. The best way to find evidence is to look at variation in hours within similar schools within similar areas in the same country. There is now growing evidence from the US that extended hours makes a big difference – and more difference than many of the other things into which lots of money is being poured ( class size, better teachers, etc). Let’s look at specific examples.The Expanded Learning Time experiments in Massachussets has added 2 hours per day to pilot schools. The effect? After just 1 year, there was a 44% boost in maths proficiency, 39% in English and 19% in Science. And the achievement gap narrowed too – by 35% in English. The 57 KIPP schools in the US achieve remarkable results in the US’ most deprived areas. With 80% of kids from low income families and 90% African American or Latino, the KIPP schools’ results are 2 to 3 times better than similar schools elsewhere. The school day at KIPP? It’s 7.30-5.00, with additional Saturday sessions and summer schools too. Some smart research in the US has proven the opposite effect when school hours are reduced – when schools are closed by snow, achievement falls, in proportion to the time closed. The evidence is getting louder. In 2013, 5 US States extended learning hours by 300 hours ( the equivalent of 10 weeks extra teaching). 

What about the teachers? In schools with extended hours, the biggest supporters have become the teachers. But surely they must resent the extra hours, the longer days? Aren’t they already at breaking point? How can they be supportive? Firstly, having more time each day, means that lessons are less rushed, less stressful, more relaxed. There is more time on the task – time to explain, to repeat, to explore. Secondly, schools with extended time find new ways to free up teachers from teaching. For example, the US elementary school where there is a big PE session everyday ( not just a small one once a week as before) taken by outside sports coaches and supervised by teaching assistants. During these sessions, teachers within the same grade get time to plan work together. Thirdly, some schools have added extra weeks onto the year without reducing teacher holidays by staggering teacher leave across the year. Fourthly, schools have brought a more diverse mix of volunteers, community groups and businesses into the longer curriculum, using the extra hours for an exponential increase in cultural experiences. Finally, schools with more time think harder about how to organise that time. Using data to individualise programmes for kids, they begin to catch up with the technological ability of their kids and let them access the almost infinite range of online activities. 

In simple terms what we are doing is giving kids the equivalent of an extra 7 years of compulsory education between the ages of 5 and 16 and giving teachers almost no time constraints. This is not about creating Gradgrind Academies which didactically stuff every waking hour with facts, figures and tests. It is the opposite. It’s about creating a lot of space in the day for play, creativity, relaxation, exploration and exercise. it’s about creating acres of space across the year for trips, volunteering, personal projects, work experiences, character building and bonding. It’s about making sure that kids don’t fall behind or fail to understand. It’s about schools opening their doors to let the wider community come in to help nurture and educate local kids. It’s about disrupting the current inertia so much that schools really do fundamentally re-think how their school operates. 

What about the money? It’s bound to need some new money. But we already have the buildings and the staff to cover most of it. There is existing money to recycle. An obvious example is teaching assistants and what they currently do. There is now roughly 1 teaching assistant for each 2 teachers. And yet the evidence shows that not only do they have no positive impact, but they seem to have a negative impact. Kids are better off without them. That clearly comes down to how they are used. One simple way to redeploy this resource in the 45/45 school year which I’m proposing is for TAs to supervise group activities independent of teachers. If the 200,000 or so TAs were in charge of activities (e.g. supervising homework or enrichment activities or online education sessions), this could leave teachers free to use large parts of the longer day for preparation and marking. We also need to tap into the volunteering spirit in local communities – what is stop us bringing the outside world into the school? For example, why not bring Scouts, Guides and Cadets into the school day? Or local football clubs? Or dance classes? The extra-curricular could come into the curriculum – but for all kids, not just those with supportive or able parents. We shouldn’t rush to put large amounts of money into the system. Necessity is definitely the right mother for the invention needed to take advantage of all this new time, whilst giving teachers the time they need beyond teaching. But new money should be found. More people working, less youth crime – the immediate fiscal benefits can pay for a good deal of any extra cost. But the real payback comes from a transformed generation who will leave their extended education with far higher skills and earning potential than the current generation. That will pay-off more than any infrastructure projects. So we should make this our top investment priority – creating a new category in capital expenditure rules for “human capital”. 

Is this idea too much too soon? Well, I always think a good way to test out an apparently too bold policy idea is to ask “If this new idea had been well established for the last 20 years and we proposed scrapping it, what would be the public reaction today? Relief, indifference, opposition?” Let’s assume that today’s parents had grown up expecting that schools were open 45 weeks a year and 45 hours per week. This fitted into their full time jobs. They got the same holidays as their kids and a working day that fitted inside school hours. Their kids had a broad and rich education, with lots of enrichment. And then, in order to please teachers and save a little money, the Government of the day proposed closing schools for 7 weeks a year and shortening the school day by 2.5 hours. Suddenly, a couple of million staff (mostly women, probably) would have to give up work, or go part-time. School-life would be pared down to the bone – a crammed day, with stressful lessons, kids falling behind, kids falling out, no time of the sports or arts, no place for the community in the curriculum. There would be uproar. An Election promise to go back to what we actually have today would be the biggest vote loser in history. So why wouldn’t an Election promise for my 45 / 45 model be the biggest vote winner since 1945? It must at least be good for a 45% share of the vote. 45 – remember the number!  

 

Radical reform of the Police …. and anyone it works with.

Everyone is agreed that we need radical reform in our public services. There are still years of major cuts to come. Digital technology should be turning everything on its head. Long-standing performance issues seem intractable in some services. In some cases, the demand for services has changed entirely. But there is little radical reform. In fact, most services have not fundamentally changed in nearly 200 years! The key reason for that is that we allow individual professions to be inviolable. Each one not only is above change, but has its own separate service and institution, e.g. the Police versus Fire versus Social Services versus Probation, etc. But if reform cannot cut across these silos, then the options for change are limited. We can make the organisations bigger or smaller. We can contract them out, or bring them back in-house. We can put them online, or deliver them face to face. Often such reforms although within-the-box are massive in scale and create lots of upset – all sorts of restructuring and privatisation, for example. But essentially, the service carries on as before, hopefully doing the same thing a bit cheaper or a bit better. But still the same thing. Real reform has got to give someone the chance to rethink “What outcome does the public want and what’s the best way to deliver it?” The only way to get at this is to overcome the professional silos – partly by merging professions together and partly by getting the public to deliver more of the service themselves. To make such an omelette, lots of eggs need breaking first. By way of example, I want to explore what this could mean for the Police and the professions its works alongside.But first, let’s reflect on what we’re up against.

Why have our public services hardly changed in nearly 200 years? Well, most of them were fundamentally shaped at the time of Queen Victoria taking up the throne. Not even at the end of that long reign, but at the beginning! That is when most of the professions were defined and various demarcations emerged. The police force was created by Robert Peel in 1829. The first fire brigade was set up in Edinburgh in 1824. The first medical degrees were awarded in 1826, by when the apothecaries (who became our GPs) had been defined (1815) and split from the surgeons. The surgeons themselves had made the final split from the barbers in 1745! The first social workers were seen in Paris in 1833. The Institute of Civil Engineers was set up in 1818. I could go on. And on. It’s remarkable that almost two hundred years later – after the development of electricity, telephones, cars, computers, etc – that this professional structure in our public services is almost entirely unchanged. Indeed, not only have the professional boundaries remained fixed, but each profession usually has its own separate service. Our public services are in reality just a set of separate, historic professions. For example, the surgeons and the apothecaries (GPs) are still utterly separate services, in spite of perpetual revolution in clinical technology. The way in which these professions have been funded and politically controlled has changed. The largely charitable basis to public services was gradually replaced by taxpayer funding, culminating in the 1945 welfare state. The largely local control of services was increasingly nationalised to a high watermark in the 1990s and 2000s, but is now being localised again. However, the basic shape of the services today would look surprisingly familiar to those who attended Victoria’s coronation. The turnpike engineers are still there, even if the turnpikes no longer collect the money. So, if we’re looking for radical reforms, it is imperative that look at reshaping the rigid professions and the silos in which they exist.

Police reform is a great case study. The Peelers comprise three in four of the quarter of million police staff. They are still more of a force than a service in many cases. The Police is currently being cut by unprecedented amounts – a 20% reduction in this Parliament, including the loss of thousands of sworn police officers. As in other public services, there is often talk of radical change but only within the police silo. One option is changing the scale – e.g. merging police forces, or creating neighbourhood policing. Another option is to contract out certain services – e.g. managing custody suites. Or to create para-professionals (e.g. PCSOs) who are almost the same as police officers but not quite. Or to, belatedly, grasp the power of IT to make policing more efficient. But what about getting out of the silo?

Firstly, let’s look at integration across professions. The way to do this is to focus on a big outcome we’re trying to achieve. For the Police this might be “Keeping the local area safe and bringing criminals to justice”. Then we should think of all the other professional services which are also trying to deliver this outcome. The next step is the bold one. Rather than exhorting everyone to work together (hasn’t worked so far), we could merge a wide range of other bodies into the Police. Firstly, we could merge the Fire Services into their local Police Forces. Fire Services should not exist as separate bodies. Demand for their services has fallen away. Even in the last decade, the number of incidents they attend has nearly halved. That comes on top of even greater long term decline in fires. And yet the level of resources has grown over much of this period until very recently. The operational utilisation of the 28,000 full time firefighters is between 3 and 10%. There have to be better ways to use the £2 billion plus of spending and the 40,000 staff. Just imagine what the individual Police Service could do if they had control. For example, they could use the down-time of firefighters as PCSOs, rather than just doing fire safety visits. Or they could create a new type of traffic service that attends road accidents, rather than police and fire engines going separately. Or they could find a low cost way to verify that a fire alarm is false (as nearly half are) rather than sending out fire engines and full crews. Similarly, we could take the new National Probation Service (the 6,000 staff who are not being contracted out and who manage the most serious offenders) and put them into the Police. The public expects the Police to be monitoring and managing those at a high risk of offending. So it makes sense. Then, we could be more ambitious still and put Child Protection into the Police. The Police is heavily involved in this area and the core skill sets in child protection are policing skills. This would greatly reduce the infamous problems of multi-agency working in this area. The Police would be accountable for investigating and acting upon threats to children’s safety. Tens of thousands of social workers would be in the Police. We could take other investigation and enforcement services (e.g. tax and benefit fraud, immigration enforcement teams, etc) and put them into the Police. There is a wide range of services that could be added – e.g. road safety teams in highway authorities, street wardens, environmental health officers dealing with noise and disputes, etc. Some will argue for the ambulance service too, but I’m less convinced about that. (Let’s return to what radical reform in health might involve in another post). The point is that we are putting on the table, under the control of one organisation, a big range of services and professions to be reshaped. There would be lots of common overheads to rationalise (HQs, vehicles, IT systems, offices, etc). But more importantly, it would be a chance to reshape the professions. By putting all these previously separate candles into the melting pot, there’s the chance to reshape the wax into new forms. This might be a large group of white collar investigators (for fraud, cyber crime, intelligence gatherers, etc). Or a new service to investigate and manage the troubled families, who blight communities, swamp the justice system and also endanger their own children. Or specialised functions for preparing court cases or customer contact. By pooling the resources, there would be the chance to prioritise resources for public safety and bringing people to justice – to decide what matters most to a local area at anyone time, e.g. fire threats, prolific offenders, overstaying illegal immigrants, knife crime, children at risk, etc. And of course this should be a way to save lots of money.

The second strand of reform is to give the public a greater role in delivering the services, rather than leaving it as the preserve of professionals. This gets straight into the Big Society debate. The cynics may well say “But surely, if there’s one area where the Big Society doesn’t work it is protecting the public and bringing criminals to justice?” In fact, it is one of the most developed areas. Let’s look at what already exists. We have 19,000 Special Constables (albeit down from well over 30,000 40 years ago). There are 12,000 Retained Firefighters who respond to emergencies as and when needed. St John’s Ambulance has 44,000 volunteers attending public events. Beyond this, there are 236 lifeboat stations manned by volunteers, alongside 48 mountain rescue teams. In fact, given this evidence, I wonder how there is any room for cynicism about the Big Society? This is it. Given the proven enthusiasm, what else could be done in this scenario? At its simplest, we could boost the numbers, e.g. doubling the numbers of Special Constables. Then we should change the balance between full-time and retained firefighters, to have a lot more of the latter, as recommended in the Knight Review. We could create a massive Police Cadet Service, to mirror what we have for each of the Armed Forces, engaging our young people. Then we could tap into the huge number of Silver Fox volunteers, who could use their retired skills (as accountants, as administrators, etc) to be non uniformed Specials helping in desk roles. As the new professional groupings begin to emerge from the melting down of the old, there could be big new volunteer opportunities – e.g. being mentors to the troubled families or prolific individuals. Or new local watch volunteers – e.g. to check out false alarms or to monitor high risk premises for illegal immigrant employees.

Grasping the potential of such radical reforms requires three key ingredients. Firstly, some disruptive technologies. This area has plenty – the new analytics are transforming intelligence, GPS systems track masses of activity, social media are becoming the norm, etc. (I am looking forward to Policy Exchange’s “Smart on Crime” report). Secondly, there is a need for strong leadership. There is no point putting a range of Victorian services into a single organisation unless someone is prepared to break down the barriers. Indeed, local authorities are the one multi-disciplinary public body already. But rarely are the professional silos mixed. They just co-exist. But the services going into the Police in this scenario now often have very strong leaders, who have been implementing major change in their own silo. For example, most police forces have made their cuts faster and deeper than they needed to. The leadership cadre exists. And thirdly, there is a need for a local democratic figure to take the tough decisions and to set the local priorities for the newly merged organisation. We now have that in the Police and Crime Commissioners. This bigger remit should make that job even more important and contested at future elections.

So if we are up for radical reform, we need to create some fresh opportunities for our public service leaders to reshape the professions. That means upsetting a lot of people. It also means acting boldly and with speed. The sooner the new opportunities are created through imaginative mergers, the sooner we will get the most effective cuts in spending and the most inspiring improvements in performance. The Police and its related services is just one area to be reshaped. I was going to say that it’s time to move on from Victorian Public Services. But I was recently working in Australia when I walked into a very different debate about “Victorian Public Services”. People wearing badges saying “Proud to Deliver Victorian Public Services” offered me a brochure titled “Victorian IT Strategy for Public Services”. Thoroughly confused, it was politely explained that the people of Melbourne are Victorians. So perhaps it’s best to avoid confusion and just hope that we change quickly enough to cancel the impending bicentenary celebrations of our enduring professions.

Scottish referendum – it’s the time to change the game, not be complacent.

Please can we forget about the EU referendum in 2017 for the next 8 months and focus on the referendum in hand. The one in Scotland. I have 3 ideas to defeat the “Yes” vote. But why we should bother doing anything when the polls have never shown a majority for independence? Well, I have a horrible gut feel that come September the undecided in Scotland may just think “Why not?”. If they do, then that’s it. Unlike other elections, the losers can’t wait 5 years and win next time. We should remember what happened when Quebec voted on independence from Canada in 1995. Up to 6 weeks before the vote, two-thirds of voters intended to vote “No”. It looked hopeless for the “Yes vote”. But as the phoney war ended, voters focused on the choices and charismatic leaders swayed their audiences. And it all changed. Just 3 weeks later, it was too close to call. Two weeks before the vote, polls showed a lead for the “Yes” vote. In the end, the final vote , with a turnout of 94%, 50.6% “No” and 49.4% “Yes”. It doesn’t come any closer than that. Can I suggest that this is a big wake up call for those who are complacently assuming a “Yes” vote in Scotland in September, given current polls? If you’ve now woken up, I think there are 3 ways that the “Yes” vote could take a different tack.

The first approach is to show some emotion. I passionately want Scotland to stay in the UK. Not because I think it will bad for the Scots to go alone. That’s up to them. I care because I think it will bad for the rest of the UK. It will destroy my sense of Britishness, which is much stronger than my sense of Englishness. By a ratio of 2:1, the non-Scots Brits feel the same. We don’t have a vote. But we do have a voice. And we need to start using it. There is now just 8 months to go. But why are the English, the Welsh and the Northern Irish so silent? Well, I think its because we have totally mis-handled devolution. Union is a marriage. There are 3 stages to ending a marriage – living separate lives, formal separation and divorce. We have all known people embark on the earlier stages of living increasingly separate lives but wanting to stay married, only to find themselves on a slippery slope of estrangement and resentment towards divorce. It comes from drifting apart, not talking openly, not creating a new union of stronger equals. Marriage can cope with strong individuals living their own lives, but only if they find new ways to refresh the union. Sometimes estranged couples hold back from divorce because splitting the house or pension fund is too hard. But the love has gone and only financial risks hold them together. To students of UK devolution, this sounds depressingly familiar. As the three smaller nations have become more independent, the UK has not found, or even sought, new ways to refresh the union. The old bonds have weakened, but new ones haven’t been forged. Estrangement has crept up on us. The English haven’t felt able to talk about relationships – as ever. Northern Ireland and Scotland have become more insular. Wales (like Northern England) depends on the Southern English breadwinner and the economics doesn’t allow them to consider breaking away. But Scotland is different. Scotland can pay its own way. It may be a bit worse or a bit better off (depending on how things go). But it can up and leave. After 15 years of devolution and the passing of the financial crisis (the equivalent of the children growing up?), there are only two reasons for Scotland and the UK to stay together. Either splitting the financial assets and liabilities (e.g. oil versus pensions, etc) is too hard. Or we rediscover our love and consciously enter a new period in the marriage. In choosing between these two options, I get enough accountancy in my day job, so I opt for love!

And I do love Scotland. The best proof is that I spent my honeymoon in Glasgow! The best date in our family calendar is our annual week at the Edinburgh festival. I yearn to return to the magic of Sutherland’s pink beaches and sandstone fantasy mountains. But I also love the cultural impact of Scotland on Britain and beyond. I commend Arthur Herman’s compelling book “The Scottish Enlightenment – The Scots’ Invention of the Modern World”. This US historian, without a Scottish gene in his body, tells the compelling story of what Scots got out of union with Britain. They were transformed from the poorest country in Western Europe, bankrupt and ruled by medieval feudalism, by access to the British economy and Empire. But he also tells of what they gave back – so much more than they took. The historic impact of Scots is clear in education, engineering, medicine, economics, literature and philosophy. The biggest part of the impact came from the diaspora, as Scots impacted on the rest of the world, but especially the rest of Britain. It continues today.

So if we need to express our love, it has to get emotional. It’s time to move on from the statistics and the dossiers. I don’t think either side can win this on hard data and known facts. Scotland is a perfectly viable independent nation. And the rest of the UK would survive without Scotland. So I think this vote will be decided on emotions. That’s where the “Yes” vote has all the happy tunes. And bagpipes have a strong track record of men following them into battle. The “Yes” campaign cries “Freedom from Westminster”. Well, who wouldn’t be in favour of that? Most of the UK would echo that cry. Meanwhile, the “No” campaign relies on the ominous tunes much loved in horror movies to signify bad things around the corner. The campaign gloomily reminds Scots that Westminster comes in handy when disasters are too big for small countries to handle on their own. The dividing lines then are liberation, freedom and destiny on one side (piped in with all the tartan pomp) versus risk aversion on the other (spoken in sombre Sunday sermon tones). This paints the “No” campaign into a dark corner – defending the status quo and talking only of threats and things going wrong. Banks collapsing, fish wars with Iceland, the return of the Vikings, plagues of locusts! All scary, but hardly up-lifting visions of the future. So first, let’s let the Scots feel the love and then excite them about our better future together. On feeling the love, let’s return to Quebec. What swung the vote in Quebec in the final days? Well, on 27th October, just 3 days before the vote, there was a Unity March in Montreal. 100,000 Canadians came from all over to ask the Quebecois to vote “No” and stay with them in Canada. Plane, train and bus companies put on cheap travel to get them there. It’s widely agreed that this made the difference. People felt the love. Why doesn’t the “No” campaign ask those English, Welsh and Northern Irish who love Scotland to attend a mass Unity March this summer. I suggest a march through Edinburgh, from the port of Leith, around an outer estate, up through the magnificence of the historic core and ending with an evening of torches and beacons on Arthur’s Seat.

The second approach is to out-trump the “No” campaign and make a better offer on independence. But a different sort of independence. It is clear that “freedom from Westminster” is an effective rallying point. But the “No” campaign should adopt a better slogan “Freedom from Westminster … and Holyrood”. It should urgently put forward a vision of radical decentralisation – not just of Uk powers but also those already held by the Scottish Government. An offer that if Scotland stays in the UK, there will be a dramatic decentralisation to Scotland’s distinctive cities, islands, highlands and lowlands. Let’s mainline into the diversity of Scotland and the different identities and needs of its communities. This is an offer that would never be made by the “Yes” campaign, which comprises too many centralists, too many Statists. But let’s give those who want more devolution, more independence, a more exciting choice. I mean real power – taxes, benefits, public services, business regulation, planning policy, etc. The sort of power that US states have. Like nothing else we have seen in the UK. Let’s go further and offer them the chance to ask for whatever they think will work. But let’s not be shy to offer things which currently belong to Holyrood. The UK Parliament can still legislate to impose a devolution within Scotland if the Scottish Government is against, but the people are for it. It is for the Scots to suggest the geographies. But’s let’s sell a vision of freedom from Westminster and Holyrood. Let’s talk of powerful, independent cities governing their own future. A Greater Glasgow as a magnet for highly skilled migrants rapidly becoming the UK’s second city. A Greater Edinburgh retaining its 90,000 students and turning them into the entrepreneurs and experts who make it Europe’s knowledge capital. An Aberdeen that is free to reinvest its current prosperity into a future other than oil and gas – just like other energy capitals around the world. Orkney and Shetland gaining the same status as the Channel Islands, becoming an oil rich boom location. The Highlands free to make the most of its wonderful natural resources. A Lowlands that finds its own balance between conserving its quiet ways and revving up a more dynamic economy. Different school systems. Different approaches to health. New financial incentives to crack endemic poverty. A local freedom to compete in the world to attract the best people and the smartest investment to Scotland. A freedom to compete with each other in Scotland. A better and more attractive chance for to seize control of your destiny.

The third approach is offer some new forms of union. Union that gives Scotland what it can’t get on its own. Here are just a few examples. Firstly, let’s not be frightened about dealing with cultural integration. I’d start with sport. Scots cheering for Mo Farah in the London Olympics said everything about what a modern union should look like. Football is the national game of Scotland. It is also the national game of England. Let’s agree now (before the miseries of Rio) that we will enter a Great Britain team in the 2018 World Cup. At least that means that Scots, Welsh and Northern Irish players can get to the World Cup …. and that we might just make it beyond the quarter finals. Let’s also open up the English Premier League and the Championship to Scots football clubs. Nothing has helped refresh the Anglo-Welsh relationship as much as the promotion of Cardiff and Swansea to the Premier League. Being in the EPL is probably the best global awareness raiser for UK cities. Let’s have Celtic, Rangers, Hearts and others on the newly renamed British Premier League and Championship fixture lists. Secondly, let’s invest in our joint future. We need to combine our forces to help our premier universities. The UK has 17 out of the world’s top 100 universities in the QS rankings. Three of these (Edinburgh, Glasgow, St Andrews) are in Scotland. But we face fierce competition to maintain or improve on this position. Only massive UK-scale investment in science and technology will realise our potential to attract the very best academics, to recruit the most financially attractive overseas students, to finance spin-out businesses and to retain the best graduates in the city in which they learn. If Scotland goes independent, its universities will be ruled out of this investment. If Scotland stays, then the excellence of its universities means it quite a disproportionate share of this investment. We have to massively increase our investment in science and technology research over the next 10 years. So let’s announce it now and create a big carrot to stay and access the UK funds. Another area to tackle together is immigration. Whilst the scale of recent immigration is a major public concern in England, it plays differently in Scotland. All countries in the UK want immigration to be better controlled. But the English often forget that Scotland has been fighting against population stagnation and decline. In 2002, it faced its lowest population for 30 years. The last decade, however, has seen a 5% increase in the population, with immigration being the biggest reason. The second biggest reason is incoming English residents. With a recent tail-off in the birthrate, an ageing population, depopulation in a number of local areas and a lower life expectancy than the UK as a whole, Scotland has different immigration needs to the wider UK. It doesn’t take independence to solve this. It is entirely possible that geographically-limited visas could be issued for people to live, work and study in Scotland, without the same rights in England, Wales or Northern Ireland. For example, Scotland could be more generous than England in letting students extend their stay beyond university (when it currently loses large numbers of highly talented young people) if they have a job or further study in Scotland. It’s the same as an employer sponsored work permit. These are just 3 examples. In remaking the relationship, we need to think creatively and collaboratively along similar lines.

Maybe it was spending my honeymoon in Glasgow that always make me think of the Union as a marriage. But let’s not kid ourselves that if Scotland files for divorce in September that England and Scotland will just carry on, as independent states, as “best friends”. There are so many people who started on amicable divorces and, after the lawyers and the disputes, ended up with lifelong resentment and feuding. Just imagine how ugly the break-up will be – what happens to vital military bases, who gets the bad bank liabilities, who is able to use sterling, who gets access to the EU, etc. Often people say that after the divorce process there is just no love left, only ill-will.

Who is up for my 3-point plan – a Unity March in Edinburgh this summer, an offer of freedom from both Westminster and Holyrood, plus some creative new ways to refresh our marriage? This will be a debate settled by the heart, not the head. So Brits, let your love out…. A “Yes” vote for that at least?