July 15, 2024
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Britain’s broken public services

Britain’s broken public services

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From overcrowded hospitals and prisons to crumbling school buildings, Britain’s public services are broken. Voters cite the state of the NHS and healthcare, in particular, as their second biggest concern after the cost of living. For any incoming government, fixing services will involve some of the trickiest trade-offs. Yet neither main party is being open about the scale of the taskand how much it is likely to cost.

The pandemic took a toll, especially on the NHS. But it hit services already weakened by a decade of Conservative-imposed austerity. Most have not regained pre-pandemic performance levels, says the Institute for Government — but nearly all were already performing worse in 2019 than in 2010.

The reasons are straightforward: erratic policymaking and ever-changing ministers; falling real-terms pay that has made it hard to recruit and retain staff and led to damaging strikes. Raiding capital spending to plug day-to-day funding gaps in the 2010s compounded decades of under-investment.

Solving these problems will take years. Stability and strategy can help. Any new government must adopt long-term plans, appoint able ministers and give them time. There is still scope for reform, too, across many services.

It is worth seeking to remove distortions in the welfare system that discourage able people from work, though the Conservatives’ claim of £12bn potential savings is doubtful. In the NHS, further reforms should aim to reduce bureaucracy and silos. To put it on a more sustainable long-term footing, a no-taboos review is needed of how health is organised and funded, and whether it should move closer to European models that use social insurance and co-payments.

In health and elsewhere, however, reforms will have to run in tandem with higher investment in the IT, equipment and infrastructure needed to unlock greater efficiencies. The NHS has lower productivity despite having more staff and funding than pre-pandemic. Some of that is due to absences and post-Covid burnout. But doctors cannot operate in theatres where the roof is leaking.

Spooked by the market crisis over Liz Truss’s debt-funded tax cuts in 2022, both main parties have striven to show restraint in their spending plans. Labour, until recently the party of Jeremy Corbyn, is particularly intent on establishing trust. Its manifesto promises to recruit more teachers and provide more NHS appointments, funded by taxing independent school fees and non-doms. But it has pledged no increases in the main tax rates and to respect “robust fiscal rules” on debt.

Fiscal rules can usefully prevent runaway borrowing, but need to be flexible enough to allow essential investment. There is a sound case for borrowing to fund finite investments in technology and infrastructure that can reduce running costs. Many investors expect additional borrowing, and will tolerate it if it is seen to be growth-enhancing.

Some increases in current spending will be needed, too. The erosion of public sector pay and conditions needs to be addressed to attract sufficient staff, especially if parties want to limit immigration. And a greater emphasis is required on “preventive” spending — rebuilding public health programmes, for example, to reduce NHS demand.

Britain’s hope of enjoying European-level social welfare for American-level taxes is reaching its limit. Cutting taxes to stimulate growth is a worthwhile aim, but the toll of poor services — from skills shortages to inactivity due to sickness — is holding the economy back. Polling suggests more than half of Britons think public service spending should be raisedeven if that means higher taxes or borrowing. The politics today point in the opposite direction. But by failing to be upfront about what may really be needed, the main parties are doing a disservice to voters, and themselves.

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