In spite of several decades of intense research on public participation, there is still very little understanding of what the relative roles of citizens and public agencies are in creating publicly-valued outcomes. Research into public participation has focused on the process, not the outcomes, while evaluation of public interventions has tended largely to ignore the inputs made by citizens. Both these stances have been wrong-headed and have led to serious misunderstanding of the cost-effectiveness of public policies. The time has come to put this right.
One important attempt to correct this ‘citizen-blindness’ in public policy is represented by the Modelling Birmingham project, which is establishing cause-and-effect chains between public interventions and key quality of life outcomes in the city. An important part of this project is intended to be the quantification of citizen inputs as well as inputs from the public sector and business, leading to a whole-systems approach to the evaluation of local governance mechanisms, rather than the public-sector-centred approaches used by government in recent decades.
To understand the potential of neighbourhood governance, therefore, we need to explore much more deeply the levels of self-organising in local communities, the levels of self-help by potential and actual service users and the levels of co-production, where both public agencies and citizens make important contributions to services. Quantitative evidence on these pathways to outcomes is very scarce – the Governance International survey of five EU countries in 2008 is one of the only data sources which explicitly looks at both individual and collective co-production of public services.
Such evidence as we have available suggests that citizens are most willing to make a contribution towards improving public services when it involves them in relatively little effort and when they do not have to work closely with other citizens or staff or professionals in the government – i.e. individual co-production (e.g. the 1.8m regular blood donors, the 8m people signed up as potential organ donors, and the 10m people within Neighbourhood Watch schemes) is easier to promote than collective co-production. Of course, this doesn’t mean that collective co-production is unimportant – in the UK there are about 350,000 school governors, about 5.6m people helping to run sports clubs, 750,000 people volunteering to assist teachers in schools and 170,000 volunteers in the NHS, who befriend and counsel patients, drive people to hospital, fund raise, run shops and cafes, etc. However, the imbalance between individual and collective co-production is worrying, as there is a strong suggestion in the literature that collective co-production is likely to have larger, more sustainable impacts on quality of life outcomes than individual co-production. Our current AHRC Connected Communities project (Bovaird and Stoker – ‘Activating the Big Society’) is exploring ‘nudges’ to identify ways in which the public sector can influence more citizens to engage in collective co-production. It seems likely that more vigorous and imaginative neighbourhood action will be key in the future to unlocking the potential for collective co-production – and for turning ‘self-help’ and ‘self-organising’ activities into genuine co-production with the public sector.
There have been several major problems so far with the public sector’s approach to neighbourhood working (including the wholly inappropriate scale of the ‘neighbourhoods’ which many public agencies have identified (typically far larger than any ‘neighbourhood’ with which local people identify), the unimaginative ways in which people have been invited to get involved, the lack of careful segmenting of who is invited to do what, and the unwillingness of local service providers clearly to differentiate their offer in differ small-scale geographies). Most of these actually derive from one major assumption of public policy makers – that larger scale is essential for more cost-effective services. This assumption now looks seriously misguided.
The conventional wisdom about public services improvement over the last decade, starting from the ‘unitary reforms’ in England, becoming strongly evident in the Beacham Report for Wales, and still partly informing the Christie report in Scotland, has been a differentiation of public services according to their potential for economies of scale in provision:
• Transactional services are seen as having big economies of scale, suggesting centralisation at county, regional or even national level, but subject to competition and regulation.
• Personal services are seen as having few, if any, economies of scale, suggesting a ‘commissioning’ approach (often procured externally) and increasingly co-produced with users and communities.
• Infrastructure-heavy services are seen as needing flexible solutions, partnering with other services and partners to ‘sweat the assets’, e.g. through co-location in service hubs.
• Regulatory services are seen to determined by ‘economies of scope’, seeking to operate at a scale justifying employment of a full team with all specialisms needed for the function.
However, this model, though valuable a decade ago in shift thinking from the previous ‘service silo’ fixation, is no longer tenable. The analytical goalposts have moved, as our understanding of the strategic management of services has widened and deepened. There is now growing realisation that:
• ‘transactions’ are often holistic, with an ‘social component’ – while some ‘back office’ services can indeed be centralised without penalty to cost-effectiveness, many transactions which involve direct contact with citizens can be used for a variety of valuable interactions, many of which get lost completely when the service focus is on a concept of ‘efficiency’ which boils down to minimising contact with the citizen;
• ‘personal’ and ‘infrastructure’ services are seen to have multiple outcomes and therefore ‘commissioning’ is multi-stakeholder – current commissioning processes are often absurdly tunnel-vision (e.g. DWP programmes for getting people into work, which ignore, do not reward, and therefore underachieve, the much wider outcomes often created for the service users) and therefore sub-optimal;
• regulatory services can now be partly externalised, so that internal ‘economies’ of scope are much less important than previously thought. Moreover, key external providers of the ‘specialisms’ needed for regulation are likely to be service users and other citizens, who understand much more clearly than ‘technical’, ‘professional’ or ‘managerial’ staff how, and to what extent, the service produce the desired outcomes.
Given the major changes to the way in which we now view services, including public services, there is the possibility of analysing the potential role of neighbourhood governance in service improvement. In particular, the following criteria become important:
• Which of the outcomes desired are likely to benefit from neighbourhood inputs?– e.g. the outcomes specified in the Children’s Act (healthy, safe, enjoy & achieve, positive contribution, economic wellbeing) clearly will benefit from neighbourhood action, at the very least to improve the levels of ‘enjoyment’ of children and young people – and probably for most of the other outcomes as well.
• When activities contributing to ‘services’ are unbundled, which of these activities could be delivered at neighbourhood level? – i.e. which elements of the ‘value chain’ (governance, commissioning, prioritisation, planning, design, financing, management, delivery, assessment) are likely to be strengthened by inputs at neighbourhood level?
• Which configurations of organisations and partnerships are likely to be cost-effective in providing these activities to achieve these outcomes? – e.g. what roles can citizens, councillors and other stakeholders play in these organisations and partnerships
• How resilient is the service system, given the risks of failure? – In particular, to what extent could neighbourhood involvement enhance the resilience of the service system and/or the desired outcomes?
The lesson from applying these criteria is clear: Almost ALL services can benefit from being devolved to neighbourhood level, at least in part. We should therefore expect that most of them will therefore be so devolved in the future, at least in some local authorities, as the possibilities become more apparent. Therefore, the real question is not “Should we have EITHER large-scale OR neighbourhood level services?”, it is “TO WHAT EXTENT and HOW should we organise the neighbourhood contribution to services?”
Conclusions
The world of service management is changing radically across the world and in all sectors. In this period of All Change!, the old assumptions no longer hold – a bold new conception is needed for how services can be improved.
This era of radical change comes with huge risks – risks associated both with the scale and nature of the changes being tried but also with misguided attempts to suppress the need for change.
Key to the changes taking place are two major global renegotiations of the relationship between citizens and the state. First, citizens expect their potential role in governance to be appreciated, respected and embedded within decision-making processes. All public services need to come to terms with this new governance agenda. At the very least, commissioning of public services cannot remain an ‘expert’ or ‘technical’ process, divorced from the priorities of local politicians and uninformed by the wishes of local people.
Secondly, the relationship between service providers and service users is everywhere being renegotiated – perhaps more quickly in the private sector (where users are now expected to carry out many of service activities on-line, only using provider personnel for those activities where technical expertise is really essential) but now also in both public and third sectors. This co-production both allows the assets and resources of service users to be harnessed and also allows service users to ‘personalise’ the service in a way which is more meaningful than ‘personalisation’ devised by service providers. The implications of this second global change have still not been fully appreciated in UK public services. It may well turn out to be even more radically challenging than the renegotiation of governance relationships.
And the prospects for these renegotiations? Research continually indicates a substantial latent willingness of citizens to become more involved in the decisions which influence their lives. However, this is only evident where citizens feel they can play a worthwhile role. It is this latter condition which the public sector has, up to now, largely failed to deliver. The public-sector-centred approach to participation has run its course – and we should not underestimate its achievements. However, successful neighbourhood-based working in the future is likely to require a much wider and deeper co-production approach, which responds directly to citizens’ agendas, not simply to public agencies’ agendas.
Such a citizen-centred approach will, of course, need experimentation. Indeed, it may need radical experimentation - since neither the current self-organising approaches in civil society nor the current approaches to co-production with the public sector are well understood as yet, none of the public sector’s current recipes for involving users and communities can be regarded as ‘reliable’.
Experimentation necessarily means that some failures will occur. This means that there will be a need to design resilient systems, develop ‘last resort’ intervention plans, and allow slack resources to respond to emergency needs where the failures are serious. In the private sector, as basic design principle for innovation would hold here – ‘fail early, fail fast, fail cheap’. This is clearly harder to implement in the public sector. However, rather than running away from the prospect of failure (which is occurring to some extent in all of our public services already, although often not visible to the public), we have to be positive – creative experimentation is also likely to turn up many unexpectedly successful approaches which can be rolled out quickly.
To experiment with a much more citizen-centric approach at neighbourhood level, the public sector must be ready for the scary world of ‘trusting’ – trusting users, citizens, partners, voters. Part of this trusting will involved surfacing much more clearly than in the past the likely outcomes of public interventions and the likely risks of outcomes not being achieved. And a further major area of trust will need to be in accepting that the contributions of service users and other citizens at neighbourhood level may well turn out to be ingenious and cost-effective in terms of the overall societal cost-benefit results. Trust between the public and the public sector has been in short supply in recent decades – on both sides. It will have to be earned – by both sides. However, there is little point in waiting for it to emerge of its own accord – the public sector needs to start the process of change and to convince the sceptics in neighbourhoods that it really means to negotiate a new settlement in the use of public resources.
Finally, all radical change costs resources – ‘neighbourhood’ and ‘community’ interventions, even when based on ‘co-production’ and ‘community assets’, are not ‘free’. But they also mobilise new resources. It is time to explore how we might rebalance community and state inputs in order to enhance the outcomes which are jointly produced.
[Based on a presentation to the ESRC/AHRC DCLG Workshop on Neighbourhood and Community Involvement in Public Services on 13 December 2011 in London]
Friday, 23 December 2011
Saturday, 10 December 2011
Has the new 'EU minus one' outlawed leftist governments for ever?
Has the new 'EU minus one' outlawed leftist governments for ever by its banning of public sector fiscal deficits? Are the Centre-Right parties that dominate the current EU using these new intergovernmental agreements to ensure that Keynesian solutions to economic problems are now impossible? These are the views of Owen Jones in his New Statesman blog of 9 December (http://www.newstatesman.com/blogs/the-staggers/2011/12/european-treaty-cameron-stop).
However, Owen Jones' arguments are way off-beam. The new 'EU minus one' deal does NOT outlaw expansionary fiscal policy, as long as it's investment- led, not based on a structural deficit.
Moreover, there's nothing leftist (or indeed Keynesian) about a 'structural deficit' - subsidising current voters at the expense of future generations is just as irresponsible as refusing to invest on their behalf, which is the Osborne agenda. An investment-led budget which is green and equality-enhancing does NOT contribute to a structural deficit, indeed it REDUCES the risk of future structural deficits.
Owen Jones also misses the point that a balanced budget can represent expansionary fiscal policy, if it is at a higher level of tax and spend, which is what EVERY country in the EU (including Germany) now desperately needs.
The fundamental socialist agenda is about fairness and equity. A fairer tax and spend regime will be no more difficult under the 'EU minus one' intergovernmental treaties than it was before. Interestingly, one of the comments on Owen Jones' post is by Jon Burke, who argues that the new 'EU minus one' agreements will be good for genuinely leftist governments in the EU, since they will have to make the case explicitly for a more progressive tax and spend system, rather than simply using deficit financing to bottle out of taxing the rich at appropriate levels (and making sure they pay up, rather than evading and avoiding tax). This is a valid argument but underplays the importance of investment-led expansionary fiscal policy.
A genuinely equitable and sustainable growth agenda, based on investment for the future, is what we should be fighting to convince European voters to accept. This will be a tough argument to win. However, it will be a lot easier - and a great deal more important - than trying to interest voters in the arcane details of which international forces ('the markets', 'the credit rating agencies', 'Brussels', 'the IMF') are most responsible for making it 'essential' that our governments impose savage cuts which are socially unjust, speed up irreversible climate change and undermine our economic future.
However, Owen Jones' arguments are way off-beam. The new 'EU minus one' deal does NOT outlaw expansionary fiscal policy, as long as it's investment- led, not based on a structural deficit.
Moreover, there's nothing leftist (or indeed Keynesian) about a 'structural deficit' - subsidising current voters at the expense of future generations is just as irresponsible as refusing to invest on their behalf, which is the Osborne agenda. An investment-led budget which is green and equality-enhancing does NOT contribute to a structural deficit, indeed it REDUCES the risk of future structural deficits.
Owen Jones also misses the point that a balanced budget can represent expansionary fiscal policy, if it is at a higher level of tax and spend, which is what EVERY country in the EU (including Germany) now desperately needs.
The fundamental socialist agenda is about fairness and equity. A fairer tax and spend regime will be no more difficult under the 'EU minus one' intergovernmental treaties than it was before. Interestingly, one of the comments on Owen Jones' post is by Jon Burke, who argues that the new 'EU minus one' agreements will be good for genuinely leftist governments in the EU, since they will have to make the case explicitly for a more progressive tax and spend system, rather than simply using deficit financing to bottle out of taxing the rich at appropriate levels (and making sure they pay up, rather than evading and avoiding tax). This is a valid argument but underplays the importance of investment-led expansionary fiscal policy.
A genuinely equitable and sustainable growth agenda, based on investment for the future, is what we should be fighting to convince European voters to accept. This will be a tough argument to win. However, it will be a lot easier - and a great deal more important - than trying to interest voters in the arcane details of which international forces ('the markets', 'the credit rating agencies', 'Brussels', 'the IMF') are most responsible for making it 'essential' that our governments impose savage cuts which are socially unjust, speed up irreversible climate change and undermine our economic future.
Tuesday, 13 July 2010
UK public spending cuts: Good news, bad news
Yesterday evening I was interviewed on BBC Midlands Today on the current UK spending cuts, which are dominating the local news headlines, as budgets are cut daily for social care, schools, etc. As usual, it was not possible to say what I really wanted to say – the questions were narrow and my reactions were too slow to bend them to my message!
So my core argument didn’t get across – there’s good news and bad news about the cuts so far. And no political party is spelling out what is really going on.
The bad news is pretty clear. Overall, the current estimate is that the ringfencing of health and overseas aid, plus the ‘protection’ afforded to education and defence, means the average expenditure cuts in the rest of public services will amount to around 33-35% over the next five years. This is savage and not remotely possible without affecting frontline service staffing. The level of consequent unemployment of public service staff will be at least 600,000, possibly nearer 1m.
What will this mean for service users? First, a lot more people will be told they are not eligible for a service, where public agencies can exclude them– eligibility criteria will be drawn much tighter. If you are eligible, you will have to wait longer, you’ll get less service, it will be delivered by less experienced and trained staff and you will have less choice (if any) in what type of service is available to you. If you try to book an appointment (e.g. with a doctor or a social care worker), you’ll have to wait for it, it may well be cancelled before it happens and you’re unlikely to see the same professional staff as the last time.
Of course, you may well be able to turn from the Big State to get some help from the Big Society. But there’s likely to be bad news there, too. The recession has increased the number of people volunteering to help out others – but reduced the capacity of third sector organisations to use them productively, because they too are short of funds to organise themselves.
So, some tips:
• Don’t get ill (just protecting NHS spend won’t be enough to provide the likely number of future users with current service quality levels).
• Don’t let anyone you depend on for support get ill (or leave the neighbourhood).
• Be (VERY) nice to your neighbours (you may be needing them a lot more in future).
• Start saving – if you need any public service in the future, you may well not be able to get it or you may have to pay a large part of it when you do get it.
• If you’re young, start learning a foreign language (you may need to go abroad if you want a public sector job in the future – or a public service).
• Take up ‘easy access’ leisure activities like walking and birdwatching – anything that requires public sector provision, like swimming or sports centres, may be too expensive for you or too far away from you in the future.
It’s a pity that the coalition government parties don’t want to talk about these inevitable consequences of their decisions. The new era of ‘transparency’ is being spun as fast as the previous era of ‘transformation’.
But there is some good news as well. The first is that the cuts are possible – the number of public sector employees who are due to retire in the next five years is huge. This means that the spending plans can indeed be implemented and at relatively little cost (at least, compared to redundancy payments – of course, this will hit the public sector pensions bill but that would have happened anyway, irrespective of this round of cuts).
Second, we have just emerged from a period of higher public investment on capital than at any time in UK history (both in terms of money spent and in terms of spend as a proportion of GDP). This is particularly evident in the new schools and hospitals all over the country. This will mean that quality in services where the budget has been cut will not be so badly savaged as it would have been in the past – at least the service buildings and equipment are now in tiptop shape, at last putting right the damage from the 1976 IMF cuts and the abandonment of public service infrastructure in the Thatcher-Major era.
Third, not all the cuts in staffing will mean that services will be worse in ways which matter to users. We’ve slowly come to realise, particularly as a result of the Best Value regime in local government ten years ago and the ‘transformation’ agenda of the last five years, that the way we do local public services is probably NOT the best way. Many of the changes in the next few years will be for the better - e.g. social media will make access to services much easier and revolutionise understanding of how to get the most out of them. However, we don’t know which ones will be positively affected in this way – for most public services there is still no consensus on how to reconfigure them to improve them. Many of the changes in the next few years are likely to turn out to be blind alleys – at best, not leading to improvement and, at worst, making services significantly worse.
This applies both to ‘traditional’ public services – those that continue to be delivered by the professionalised public service providers – and also to the ‘co-produced’ services which in future will become the joint responsibility of public service agencies, service users and other members of the community. While the coalition is placing huge hope in the potential for the Big Society to mop up the service needs which will no longer be covered by public spending, the truth is uncomfortable – all our research indicates that the public sector (managers and staff) does not understand co-production, that professional public service staff are reluctant to get involved in it, are largely clueless on how to stimulate it and are poorly prepared to manage it systematically. Moreover, the public is likely to be given the message that they are being sold short by being palmed off with second-rate, non-professional services.
Funnily enough, the Labour party hasn’t been talking much about these ‘good news’ items. Maybe that’s because it wants to exaggerate the damage done to public sector jobs by the cuts, is embarrassed by rather than proud of its capital spending record in government and nervous about attacking public sector workers for the way they coldshoulder co-production. This is a pity, as Labour can only prepare for future government if they recognise the realities faced by the current and immediately previous governments.
Unfortunately, each of the ‘good news’ items has a sting in the tail. The early retirement of a huge part of the public service workforce will leave most public services to be delivered by relatively inexperienced staff and managers in agencies with seriously depleted organisational memories. The huge Noughties capital spending programme is being terminated early, leaving at least 20% of the high need schools, hospitals, transport and housing projects high and dry, so that some areas of the country will be massively disadvantaged for the next five years, compared to their luckier neighbours. And the big gains which will come from reconfiguring public services in intelligent and imaginative ways will be offset by the damage done by the precipitate speed with which the programme is being rushed through - too soon to find out what works, so that service changes imposed in a panic will cause pain for years and over a wide area, even when it’s quickly apparent that they are truly dumb.
Of course, there is still the battlecry from the coalition government that radical spending cuts are needed soon. We have to ask: “Really? Whatever damage they do?” That is hardly a rational approach.
Rather, we need to weigh up the pros and cons of radical and rapid spending cuts. We have on one side of the balance the avoidance of the high interest costs which would arise from a longer period of high debt levels (substantial, but not crippling) and the risk of a UK credit rating downgrade (very low).
On the other side of the balance, there is the major damage done to the quality of life of much of the UK population over the next five years, particularly those most vulnerable. In addition, there is the danger of a double-dip recession, which even the Office of Budget Responsibility has admitted has been increased by the government’s emergency budget.
There are red herrings to throw out of the scales entirely – e.g. the argument which has recently reappeared (though it was hardly voiced during the election campaign) that public sector spending crowds out private sector investment and production. This hoary old non-sequitur will surely not confuse as many people in 2010 as it did in the heady Bacon-and-Eltis days of 1976. Again, there is the argument that the debt will ‘crush future generations’ – the ‘one hand clapping’ argument which I’ve written about in this blog previously, which ignores the fact that public sector assets cover a large proportion of the debt and, as the economy recovers, will reflate fast in value and reduce the net debt value. Not to mention the fact that it is largely public spending which has stabilised housing values and reflated the stock UK market by 40% since the bottom of the recession and has therefore been responsible for a huge increase in the value of private wealth (corporate wealth and household pensions), far from ‘crowding out’ the private sector.
So, the verdict is very simple – the bad news outweighs the good news. These UK public spending cuts are too much, too soon, too fast.
So my core argument didn’t get across – there’s good news and bad news about the cuts so far. And no political party is spelling out what is really going on.
The bad news is pretty clear. Overall, the current estimate is that the ringfencing of health and overseas aid, plus the ‘protection’ afforded to education and defence, means the average expenditure cuts in the rest of public services will amount to around 33-35% over the next five years. This is savage and not remotely possible without affecting frontline service staffing. The level of consequent unemployment of public service staff will be at least 600,000, possibly nearer 1m.
What will this mean for service users? First, a lot more people will be told they are not eligible for a service, where public agencies can exclude them– eligibility criteria will be drawn much tighter. If you are eligible, you will have to wait longer, you’ll get less service, it will be delivered by less experienced and trained staff and you will have less choice (if any) in what type of service is available to you. If you try to book an appointment (e.g. with a doctor or a social care worker), you’ll have to wait for it, it may well be cancelled before it happens and you’re unlikely to see the same professional staff as the last time.
Of course, you may well be able to turn from the Big State to get some help from the Big Society. But there’s likely to be bad news there, too. The recession has increased the number of people volunteering to help out others – but reduced the capacity of third sector organisations to use them productively, because they too are short of funds to organise themselves.
So, some tips:
• Don’t get ill (just protecting NHS spend won’t be enough to provide the likely number of future users with current service quality levels).
• Don’t let anyone you depend on for support get ill (or leave the neighbourhood).
• Be (VERY) nice to your neighbours (you may be needing them a lot more in future).
• Start saving – if you need any public service in the future, you may well not be able to get it or you may have to pay a large part of it when you do get it.
• If you’re young, start learning a foreign language (you may need to go abroad if you want a public sector job in the future – or a public service).
• Take up ‘easy access’ leisure activities like walking and birdwatching – anything that requires public sector provision, like swimming or sports centres, may be too expensive for you or too far away from you in the future.
It’s a pity that the coalition government parties don’t want to talk about these inevitable consequences of their decisions. The new era of ‘transparency’ is being spun as fast as the previous era of ‘transformation’.
But there is some good news as well. The first is that the cuts are possible – the number of public sector employees who are due to retire in the next five years is huge. This means that the spending plans can indeed be implemented and at relatively little cost (at least, compared to redundancy payments – of course, this will hit the public sector pensions bill but that would have happened anyway, irrespective of this round of cuts).
Second, we have just emerged from a period of higher public investment on capital than at any time in UK history (both in terms of money spent and in terms of spend as a proportion of GDP). This is particularly evident in the new schools and hospitals all over the country. This will mean that quality in services where the budget has been cut will not be so badly savaged as it would have been in the past – at least the service buildings and equipment are now in tiptop shape, at last putting right the damage from the 1976 IMF cuts and the abandonment of public service infrastructure in the Thatcher-Major era.
Third, not all the cuts in staffing will mean that services will be worse in ways which matter to users. We’ve slowly come to realise, particularly as a result of the Best Value regime in local government ten years ago and the ‘transformation’ agenda of the last five years, that the way we do local public services is probably NOT the best way. Many of the changes in the next few years will be for the better - e.g. social media will make access to services much easier and revolutionise understanding of how to get the most out of them. However, we don’t know which ones will be positively affected in this way – for most public services there is still no consensus on how to reconfigure them to improve them. Many of the changes in the next few years are likely to turn out to be blind alleys – at best, not leading to improvement and, at worst, making services significantly worse.
This applies both to ‘traditional’ public services – those that continue to be delivered by the professionalised public service providers – and also to the ‘co-produced’ services which in future will become the joint responsibility of public service agencies, service users and other members of the community. While the coalition is placing huge hope in the potential for the Big Society to mop up the service needs which will no longer be covered by public spending, the truth is uncomfortable – all our research indicates that the public sector (managers and staff) does not understand co-production, that professional public service staff are reluctant to get involved in it, are largely clueless on how to stimulate it and are poorly prepared to manage it systematically. Moreover, the public is likely to be given the message that they are being sold short by being palmed off with second-rate, non-professional services.
Funnily enough, the Labour party hasn’t been talking much about these ‘good news’ items. Maybe that’s because it wants to exaggerate the damage done to public sector jobs by the cuts, is embarrassed by rather than proud of its capital spending record in government and nervous about attacking public sector workers for the way they coldshoulder co-production. This is a pity, as Labour can only prepare for future government if they recognise the realities faced by the current and immediately previous governments.
Unfortunately, each of the ‘good news’ items has a sting in the tail. The early retirement of a huge part of the public service workforce will leave most public services to be delivered by relatively inexperienced staff and managers in agencies with seriously depleted organisational memories. The huge Noughties capital spending programme is being terminated early, leaving at least 20% of the high need schools, hospitals, transport and housing projects high and dry, so that some areas of the country will be massively disadvantaged for the next five years, compared to their luckier neighbours. And the big gains which will come from reconfiguring public services in intelligent and imaginative ways will be offset by the damage done by the precipitate speed with which the programme is being rushed through - too soon to find out what works, so that service changes imposed in a panic will cause pain for years and over a wide area, even when it’s quickly apparent that they are truly dumb.
Of course, there is still the battlecry from the coalition government that radical spending cuts are needed soon. We have to ask: “Really? Whatever damage they do?” That is hardly a rational approach.
Rather, we need to weigh up the pros and cons of radical and rapid spending cuts. We have on one side of the balance the avoidance of the high interest costs which would arise from a longer period of high debt levels (substantial, but not crippling) and the risk of a UK credit rating downgrade (very low).
On the other side of the balance, there is the major damage done to the quality of life of much of the UK population over the next five years, particularly those most vulnerable. In addition, there is the danger of a double-dip recession, which even the Office of Budget Responsibility has admitted has been increased by the government’s emergency budget.
There are red herrings to throw out of the scales entirely – e.g. the argument which has recently reappeared (though it was hardly voiced during the election campaign) that public sector spending crowds out private sector investment and production. This hoary old non-sequitur will surely not confuse as many people in 2010 as it did in the heady Bacon-and-Eltis days of 1976. Again, there is the argument that the debt will ‘crush future generations’ – the ‘one hand clapping’ argument which I’ve written about in this blog previously, which ignores the fact that public sector assets cover a large proportion of the debt and, as the economy recovers, will reflate fast in value and reduce the net debt value. Not to mention the fact that it is largely public spending which has stabilised housing values and reflated the stock UK market by 40% since the bottom of the recession and has therefore been responsible for a huge increase in the value of private wealth (corporate wealth and household pensions), far from ‘crowding out’ the private sector.
So, the verdict is very simple – the bad news outweighs the good news. These UK public spending cuts are too much, too soon, too fast.
Saturday, 8 May 2010
Why Red and Yellow might lead to 'Go'
So, just two days after the general election, Clegg is being courted by both Tories and Labour – and being encouraged to jump for one or the other. I think that he would be unwise to jump for either at the moment, if he is not to throw away his hard-won cards.
My bet is that Clegg won't (or won't be allowed by his party) to enter into ANY arrangement with the Tories, mainly because they won't offer any real promise of PR and his party will make it clear he MUST vote against their '50 day' budget, if it goes beyond the bare minimum cuts that Cable would recommend.
So what then? It’s clear he has to make at least a show of talking to Labour. (My bet is that Gordon Brown will make it clear at such talks that he is willing to resign, now or before the autumn party conferences, if that will smooth the way to an agreement). However, I believe that Clegg will conclude (as other leading figures in Labour will also conclude, whatever Brown’s view) that a coalition with the Scottish Nationalists, Plaid Cymru, SDLP (plus Green/Alliance/Indep MPs) will be too greedy in its demands and too vulnerable to last. In any case, there could be no ‘easy fix’ which could quickly align their two manifestos in a way which would be acceptable to EITHER set of party members, so that any patching together would anger key party members, including MPs. So that won't work either.
This means that David Cameron will have to run a minority government. However, his '50 day' budget (presumably in mid-July) won't get through Parliament – all the opposition parties will lose face if they do not vote it down. Consequence – another election, presumably early September. Same result! Utter mess.
So, is there any way to avoid this? No doubt there are several – probably mostly unappealing. However, there is one route which would appeal to me – and, I guess, to many who fear the damage which a long-running Tory government would wreak, if allowed by the LibDems.
If Brown and Clegg agree that the foregoing scenario would be disastrous, they might also steel themselves (whatever their tribalistic tendencies) to agree that it requires drastic measures. So, it would make sense for them to agree to discuss the basis for a joint manifesto, over a period of months. It would be presented to their respective party conferences in the autumn. (Under a different Labour leader, probably). Both parties would have to swallow and accept that only such a manifesto gives any real chance of power after the following general election. I think they would buy it (while spitting forcefully, naturally).
In the meantime, Brown and Clegg could give Cameron notice that they will not vote on ANY economic or financial legislation until the Budget in March 2011 - he will have carte blanche to put through whatever he wants. But they would simultaneously put him on notice that, if they cannot accept Budget 2011, or any subsequent economic or social legislation, they will force a vote of 'no confidence' and intend to fight the next election together, with a view of forming a coalition. Finally, they should agree the subsequent coalition will run for four years, but then be reconsidered by both parties, with a view to returning to independent running for the subsequent election.
In my view, they would win (especially after the Tories have had a year to make a mess of the economy). And they would sacrifice relatively little of their core policies by working together for four years. And they would save the UK what might otherwise be some years of utter indecision.
My bet is that Clegg won't (or won't be allowed by his party) to enter into ANY arrangement with the Tories, mainly because they won't offer any real promise of PR and his party will make it clear he MUST vote against their '50 day' budget, if it goes beyond the bare minimum cuts that Cable would recommend.
So what then? It’s clear he has to make at least a show of talking to Labour. (My bet is that Gordon Brown will make it clear at such talks that he is willing to resign, now or before the autumn party conferences, if that will smooth the way to an agreement). However, I believe that Clegg will conclude (as other leading figures in Labour will also conclude, whatever Brown’s view) that a coalition with the Scottish Nationalists, Plaid Cymru, SDLP (plus Green/Alliance/Indep MPs) will be too greedy in its demands and too vulnerable to last. In any case, there could be no ‘easy fix’ which could quickly align their two manifestos in a way which would be acceptable to EITHER set of party members, so that any patching together would anger key party members, including MPs. So that won't work either.
This means that David Cameron will have to run a minority government. However, his '50 day' budget (presumably in mid-July) won't get through Parliament – all the opposition parties will lose face if they do not vote it down. Consequence – another election, presumably early September. Same result! Utter mess.
So, is there any way to avoid this? No doubt there are several – probably mostly unappealing. However, there is one route which would appeal to me – and, I guess, to many who fear the damage which a long-running Tory government would wreak, if allowed by the LibDems.
If Brown and Clegg agree that the foregoing scenario would be disastrous, they might also steel themselves (whatever their tribalistic tendencies) to agree that it requires drastic measures. So, it would make sense for them to agree to discuss the basis for a joint manifesto, over a period of months. It would be presented to their respective party conferences in the autumn. (Under a different Labour leader, probably). Both parties would have to swallow and accept that only such a manifesto gives any real chance of power after the following general election. I think they would buy it (while spitting forcefully, naturally).
In the meantime, Brown and Clegg could give Cameron notice that they will not vote on ANY economic or financial legislation until the Budget in March 2011 - he will have carte blanche to put through whatever he wants. But they would simultaneously put him on notice that, if they cannot accept Budget 2011, or any subsequent economic or social legislation, they will force a vote of 'no confidence' and intend to fight the next election together, with a view of forming a coalition. Finally, they should agree the subsequent coalition will run for four years, but then be reconsidered by both parties, with a view to returning to independent running for the subsequent election.
In my view, they would win (especially after the Tories have had a year to make a mess of the economy). And they would sacrifice relatively little of their core policies by working together for four years. And they would save the UK what might otherwise be some years of utter indecision.
Thursday, 18 March 2010
Not all complex adaptive systems lead to system growth
This picture provides a stark reminder that complex adaptive systems sometimes exhibit behaviour that leads the whole system to termination rather than growth. As ever, the lesson for social systems is whether we can identify that the 'strange attractor' underlying the system's behaviour contains system termination points - and whether there is a lever available in our meta-planning toolkit either to eliminate such points from the set of possible options or to make them less likely as system destinations.
For the starfish, the answers to these two questions appear to have been 'Yes' and 'No' respectively. If our social systems are to avoid the same fate, it would be good for us to find the answers which apply to us. We still seem some way from this position.
Wednesday, 17 March 2010
Why the Times wouldn’t pass Politics 101 in its analysis of universities v. Sure Start
A strange and wildly misguided editorial in today’s Times (‘Politics ABC’ at http://bit.ly/cxhPsJ) argues that “In the context of a looming budget deficit, Sure Start expenditure of more than £1 billion a year is exactly the kind of line item that politicians should be scrutinising, not protecting”.
It is particularly risible that the Times leader suggests that “the regrettable reality of the public finances would make this necessary …even if some [children’s] centres had not morphed into middle-class crèches from the route out of poverty that they were originally supposed to be”. Given the stranglehold on university applications held by the middle classes, turning many parts of the university system into middle-class finishing schools, this is very rich indeed.
The Times recognises that “extensive research clearly indicates the importance of investment in the early years” but goes on to argue that “the prize of greater social mobility will not be won if investment in early years comes at the expense of opportunities later in life”. Is this seriously meant to suggest that the UK university system is major vehicle of social mobility’? Clearly, the idea of ‘extensive research’ by Times leader writers doesn’t include most of the current public policy literature on higher education.
For example, in the UK, the recent Milburn report on access to the professions (http://bit.ly/a1Daun), drawing on the current academic research (nationally and internationally) concludes that social class has been, and remains, “a strong determinant of participation in higher education, and this gap has not closed substantially in the last half century”. It reports that the participation rates by higher social groups (III, IV and V) have risen over 1960 – 2000 from under 30% to about 50%, while for social groups I and II the rise has been from around 5% to about 20%. The Sutton Trust report in 2007 found that 44 percent of those from the richest 20 percent of households attained a university degree compared to just 10 percent from the poorest 20 percent of homes (http://bit.ly/cZT9OZ).
In a direct test of social mobility, the OECD found that, in the UK, 50% of the economic advantage that high-earning fathers have over low-earning fathers is passed on to their sons - in Australia, Canada and the Nordic countries, by contrast, less than 20% of the wage advantage was passed on( http://bit.ly/c9jOUI). It concluded that the chances of a young person from a less well-off family enjoying higher wages or getting a higher level of education than their parents was "relatively low".
In the US, the picture is little different – Robert Haveman and Timothy Smeeding (http://bit.ly/9447FU) have concluded “The US system of higher education reinforces generational patterns of income inequality and is far less oriented towards social mobility than it should be. If university education is to improve the chances for low- and middle-income children to succeed, the current system must be radically redirected”.
And what are we to make of the figures cited by the Times leader, that “Britain is now at or above the OECD average for spending on pre-school and school-age children, but below the OECD average for spending on tertiary education”. Given that higher education mainly provides the finishing touches to a cruelly skewed system, ensuring the reinforcement of the advantages already conferred upon children by accidents of birth into the right income and social class, why should public spending on the tertiary education of well-off young people be regarded as a priority? This would only make sense, if the argument were that we should expand public spending in order to give zero and low university tuition fees to a wider group of young people from families with low incomes, along with significant subsistence grants to compensate them for not earning for three years (never mind not contributing wages to families that badly need it).
However, even this argument, while at least logical, is questionable. Surely it is the continuing system of low tuition fees to young people who come from better-off families (i.e. the majority of university students) which “is exactly the kind of line item that politicians should be scrutinising, not protecting”, to use the Times leader’s own phrase? Up to recently, there has been a lot of mumbling that the tuition fees being charged by universities, and the consequent debts being amassed by students, would eventually choke off the demand for higher education. This argument is certainly not open to the writers of the Times leader, given that they are starting from the ‘shocking’ premise that more than a quarter of a million university applicants may be denied a place this year. It seems that young people (or, more accurately, their parents) see the long term economic and social payoffs from a university education as well worth the (relatively minor) investment they have to make.
I do not want to argue that those who can’t get a university place this year are not being disadvantaged – in public policy, any initiative which is promoted for good reasons (like Sure Start) crowds out other initiatives which could have significant net advantages, as some forms of university expansion in the UK would surely have. It’s a matter of priorities, as all politics must be.
However, I do want to argue that our concern for those not getting a university place this year should lead us to different conclusion from those reached by the Times leader writers. From the point of view of the applicants themselves, we should recognise that most of them, if they have the required grades, will get into university a year or two later – this is the normal pattern every year. Nor is it an unambiguously bad thing that they have to wait a year longer – indeed, there are good arguments that we are allowing far too many young people into university at too young an age, without the experience or maturity to make best use of their university experience. It is also interesting that many young people in Europe now choose to study in other countries, either because they want the international experience (and we should seriously ask why such a low proportion of British students takes this route) or because they cannot pursue their chosen course in a university in their own country. (It is now common, for example, for young German students who want to study medicine but cannot get a place in a German university to enrol in courses in Hungary or elsewhere – and those who do well can then transfer later back into the German system to take the places of those who fall by the wayside in those courses). Of course, it may cost more to study abroad (although this is often not the case, given the relatively high cost of living in the UK) – but for the majority of this ‘blocked’ quarter of a million, their application to universities across the UK already suggests they are willing to pay the necessary costs. The Times leader writers seem to see this quarter of a million students as locked into the UK university system. This is a symptom of how narrow and restricted is the conventional view of the role and potential of higher education in this country.
For policy makers, the implications of this argument are quite radical. The current university funding system is failing dramatically to achieve the social mobility which is often claimed to be one of its most important purposes. It is time to institute a serious of policies which will actually make it more likely that this key purpose is achieved in the future (see bit.ly/8LaBn4), including:
• no more tax breaks for private universities (or the private schools which dominate admissions to the UK’s top universities);
• free choice of state universities for all students with the right entry qualifications, with lotteries where universities are oversubscribed;
• attractive bursaries for all students whose parental income means they do not have to pay student fees, so that more low income students are attracted to university;
• an end to the wholly artificial division between full-time and part-time higher education, particularly in relation to its funding and student support mechanisms;
• a radical extension of degree study opportunities within further education, so that talented individuals have access to degree qualifications, where their study programmes merit it;
• two-year exemption from national insurance contributions (by both employers and employees) for the top 10% of every degree class in the UK, whatever sector they are employed in
• a guarantee for the top 5% of performers in every degree class in the UK that they can enter a two-year training programme in the public sector, so that entry into the public sector is on merit.
In passing, I do not want to argue that Sure Start has had an unambiguously ‘green light’ from its various evaluations – although they have highlighted a mainly favourable picture. Nor am I arguing that it is enough, by itself, to focus on children at the start of their lives - the Sutton Trust report in 2007 ((http://bit.ly/cZT9OZ) pointed out that children from poor households who are in the brightest group at the age of three slip back in developmental tests by the age of five, and are likely to be overtaken by those from affluent backgrounds by seven. However, this is an argument for continuing to experiment and improve Sure Start, and other early years programmes, not cut them back.
In sum, the argument in the Times leader today that funding of the university system should be increased at the expense of Sure Start in order to promote social mobility is not only logical nonsense, it is arrant hypocrisy – it betrays an underlying desire for Middle (and Rich) England to continue to hijack public expenditure for its own purposes, under the guise of ‘making the most of the younger generation’. Perhaps we should not be surprised to see such arguments in a Times leader?
I think it is safe to assume that the wholly unconvincing Politics ABC which appeals to Times leader writers will be seen through by those who have done Politics 101 at the universities they seek to advantage. Let us hope it also seen through by the majority voters (voters whose children and grandchildren have gone to or are likely to go university still make up well under a half of the population) and by politicians. For the moment, let us be thankful for small mercies – it would have been worse if these fatuous arguments had appeared in the Daily Mail, a newspaper to which politicians actually pay some attention.
It is particularly risible that the Times leader suggests that “the regrettable reality of the public finances would make this necessary …even if some [children’s] centres had not morphed into middle-class crèches from the route out of poverty that they were originally supposed to be”. Given the stranglehold on university applications held by the middle classes, turning many parts of the university system into middle-class finishing schools, this is very rich indeed.
The Times recognises that “extensive research clearly indicates the importance of investment in the early years” but goes on to argue that “the prize of greater social mobility will not be won if investment in early years comes at the expense of opportunities later in life”. Is this seriously meant to suggest that the UK university system is major vehicle of social mobility’? Clearly, the idea of ‘extensive research’ by Times leader writers doesn’t include most of the current public policy literature on higher education.
For example, in the UK, the recent Milburn report on access to the professions (http://bit.ly/a1Daun), drawing on the current academic research (nationally and internationally) concludes that social class has been, and remains, “a strong determinant of participation in higher education, and this gap has not closed substantially in the last half century”. It reports that the participation rates by higher social groups (III, IV and V) have risen over 1960 – 2000 from under 30% to about 50%, while for social groups I and II the rise has been from around 5% to about 20%. The Sutton Trust report in 2007 found that 44 percent of those from the richest 20 percent of households attained a university degree compared to just 10 percent from the poorest 20 percent of homes (http://bit.ly/cZT9OZ).
In a direct test of social mobility, the OECD found that, in the UK, 50% of the economic advantage that high-earning fathers have over low-earning fathers is passed on to their sons - in Australia, Canada and the Nordic countries, by contrast, less than 20% of the wage advantage was passed on( http://bit.ly/c9jOUI). It concluded that the chances of a young person from a less well-off family enjoying higher wages or getting a higher level of education than their parents was "relatively low".
In the US, the picture is little different – Robert Haveman and Timothy Smeeding (http://bit.ly/9447FU) have concluded “The US system of higher education reinforces generational patterns of income inequality and is far less oriented towards social mobility than it should be. If university education is to improve the chances for low- and middle-income children to succeed, the current system must be radically redirected”.
And what are we to make of the figures cited by the Times leader, that “Britain is now at or above the OECD average for spending on pre-school and school-age children, but below the OECD average for spending on tertiary education”. Given that higher education mainly provides the finishing touches to a cruelly skewed system, ensuring the reinforcement of the advantages already conferred upon children by accidents of birth into the right income and social class, why should public spending on the tertiary education of well-off young people be regarded as a priority? This would only make sense, if the argument were that we should expand public spending in order to give zero and low university tuition fees to a wider group of young people from families with low incomes, along with significant subsistence grants to compensate them for not earning for three years (never mind not contributing wages to families that badly need it).
However, even this argument, while at least logical, is questionable. Surely it is the continuing system of low tuition fees to young people who come from better-off families (i.e. the majority of university students) which “is exactly the kind of line item that politicians should be scrutinising, not protecting”, to use the Times leader’s own phrase? Up to recently, there has been a lot of mumbling that the tuition fees being charged by universities, and the consequent debts being amassed by students, would eventually choke off the demand for higher education. This argument is certainly not open to the writers of the Times leader, given that they are starting from the ‘shocking’ premise that more than a quarter of a million university applicants may be denied a place this year. It seems that young people (or, more accurately, their parents) see the long term economic and social payoffs from a university education as well worth the (relatively minor) investment they have to make.
I do not want to argue that those who can’t get a university place this year are not being disadvantaged – in public policy, any initiative which is promoted for good reasons (like Sure Start) crowds out other initiatives which could have significant net advantages, as some forms of university expansion in the UK would surely have. It’s a matter of priorities, as all politics must be.
However, I do want to argue that our concern for those not getting a university place this year should lead us to different conclusion from those reached by the Times leader writers. From the point of view of the applicants themselves, we should recognise that most of them, if they have the required grades, will get into university a year or two later – this is the normal pattern every year. Nor is it an unambiguously bad thing that they have to wait a year longer – indeed, there are good arguments that we are allowing far too many young people into university at too young an age, without the experience or maturity to make best use of their university experience. It is also interesting that many young people in Europe now choose to study in other countries, either because they want the international experience (and we should seriously ask why such a low proportion of British students takes this route) or because they cannot pursue their chosen course in a university in their own country. (It is now common, for example, for young German students who want to study medicine but cannot get a place in a German university to enrol in courses in Hungary or elsewhere – and those who do well can then transfer later back into the German system to take the places of those who fall by the wayside in those courses). Of course, it may cost more to study abroad (although this is often not the case, given the relatively high cost of living in the UK) – but for the majority of this ‘blocked’ quarter of a million, their application to universities across the UK already suggests they are willing to pay the necessary costs. The Times leader writers seem to see this quarter of a million students as locked into the UK university system. This is a symptom of how narrow and restricted is the conventional view of the role and potential of higher education in this country.
For policy makers, the implications of this argument are quite radical. The current university funding system is failing dramatically to achieve the social mobility which is often claimed to be one of its most important purposes. It is time to institute a serious of policies which will actually make it more likely that this key purpose is achieved in the future (see bit.ly/8LaBn4), including:
• no more tax breaks for private universities (or the private schools which dominate admissions to the UK’s top universities);
• free choice of state universities for all students with the right entry qualifications, with lotteries where universities are oversubscribed;
• attractive bursaries for all students whose parental income means they do not have to pay student fees, so that more low income students are attracted to university;
• an end to the wholly artificial division between full-time and part-time higher education, particularly in relation to its funding and student support mechanisms;
• a radical extension of degree study opportunities within further education, so that talented individuals have access to degree qualifications, where their study programmes merit it;
• two-year exemption from national insurance contributions (by both employers and employees) for the top 10% of every degree class in the UK, whatever sector they are employed in
• a guarantee for the top 5% of performers in every degree class in the UK that they can enter a two-year training programme in the public sector, so that entry into the public sector is on merit.
In passing, I do not want to argue that Sure Start has had an unambiguously ‘green light’ from its various evaluations – although they have highlighted a mainly favourable picture. Nor am I arguing that it is enough, by itself, to focus on children at the start of their lives - the Sutton Trust report in 2007 ((http://bit.ly/cZT9OZ) pointed out that children from poor households who are in the brightest group at the age of three slip back in developmental tests by the age of five, and are likely to be overtaken by those from affluent backgrounds by seven. However, this is an argument for continuing to experiment and improve Sure Start, and other early years programmes, not cut them back.
In sum, the argument in the Times leader today that funding of the university system should be increased at the expense of Sure Start in order to promote social mobility is not only logical nonsense, it is arrant hypocrisy – it betrays an underlying desire for Middle (and Rich) England to continue to hijack public expenditure for its own purposes, under the guise of ‘making the most of the younger generation’. Perhaps we should not be surprised to see such arguments in a Times leader?
I think it is safe to assume that the wholly unconvincing Politics ABC which appeals to Times leader writers will be seen through by those who have done Politics 101 at the universities they seek to advantage. Let us hope it also seen through by the majority voters (voters whose children and grandchildren have gone to or are likely to go university still make up well under a half of the population) and by politicians. For the moment, let us be thankful for small mercies – it would have been worse if these fatuous arguments had appeared in the Daily Mail, a newspaper to which politicians actually pay some attention.
Thursday, 31 December 2009
Raising the Elite of Tomorrow
Originally published in hardback in 2008 but now high on the Christmas 2009 bestseller charts in Germany (a ‘Spiegel bestseller’), Julia Friedrich's book Gestatten: Elite is essentially one journalist’s inquiry into how the young in Germany are being groomed to form the next generation of leaders of the economy and, perhaps, politics.
Why has it been so successful? The tale it tells is not encouraging – but perhaps Germany , like so many other countries, is now ready in the middle of the financial and economic crisis to reappraise the social and economic policies of the boom period.
The basic story of the book is that Germany is now raising new elites – in private universities, in private business schools, in private boarding schools, even in private kindergardens – who are being given enormously expensive education in the expectation that they will eventually take over at the helm of the German economy – its biggest firms, its investment banks and its consulting firms. However, they are not an ‘elite’ in the traditional sense of being particularly gifted – indeed, many if not most of the beneficiaries of this elite education are at or even below average achievement level in educational terms. Their advantage is not their ability, nor even particularly their dedication to hard work or their special ability to work with and lead other people – no, it consists essentially of the wealth of their parents, combined with their parents’ determination that these children will inherit power as well as wealth.
Worse, the book retails how the state is encouraging this new elitism in a variety of ways. At one level, it is importing these ideas of elitism into secondary and higher education in the public sector, in ways which are allowing rich parents to commandeer a disproportionate share of public resources for their own, not particularly gifted, children. For example, it is now common in Germany, as it has been for generations in the UK, for well-off parents to move into areas where the state schools have a reputation for being particularly good – something which Germany has largely avoided until relatively recently. Moreover, the private education sector is benefiting in tax terms from charitable status, just as in the UK, although the effects of this system are far from being ‘charitable’, being to the major disadvantage of the ‘losers’ who are not able to claw their way into this ‘elite’ class of students.
I guess that most UK readers of this book will feel a degree of Schadenfreude . After all, the ills which it documents have already been a central reality in our society and a matter for political disagreement for many decades. It is, naturally, a little comforting to find that others, particularly those who have long enjoyed enviable social and economic circumstances, now share some of the same plight as ourselves. The book provides a journalistic ‘human touch’ to put flesh on the bones of recent academic research, such as the recent book by Charles Harvey and Mairi MacClean into business elites in the UK and France, which demonstrates that the main factors which influence business success in both countries are family and education (along with professional bodies). Nevertheless, it is rather surprising to find that the Germans, who have for so long prided themselves on having transcended the ‘class society’ traditionally associated with the UK and the ‘two class’ society which scars the USA, have recently allowed and even encouraged the incursion of similar perversions of justice, with the economic inefficiencies which they bring in their wake.
However, my main reaction to the book was a reinforced horror of the way in which we in the UK have not only failed to tackle these issues – which are both more longstanding and more serious in the UK than in Germany – but have actually proposed in recent years to make things worse. We now have private universities, privately-funded and -controlled secondary ‘academies’, and are proposing to introduce a new generation of US-like ‘foundation’ schools, where the wishes of parents will override the social values which should be at the heart of any publicly-funded school system.
It is not as if we are unaware of the divisiveness and the mediocrity which ensue from an education system dominated by the decisions and expenditures of rich parents. Research has long charted the damaging effect on the UK economy of inherited positions and the promotion of those young people whose parents have bought their entry into the right schools and universities, irrespective of their abilities. However, this revealing book , which shows us how the same damaging tendencies have now surfaced and become strong in one of our closest neighbours, should remind us that we have been quiet for too long about the nonsense of current government policy, allowing the moneyed ‘elite’ to suffocate the meritocratic society which we once hoped to build in the last half of the twentieth century.
The book does not look beyond the education of the ‘new elite’ – it doesn’t attempt to map out for Germany the damage done to major private firms through MBA-itis, in the way Mintzberg has done for North America. It doesn’t attempt to highlight the demoralising effects on staff which nepotism has had in UK firms. And it doesn’t attempt to quantify the effects of lower innovation in companies due to favouritism towards less capable managers and staff, who happen to have come from the ‘right’ schools and universities. However, it holds up a mirror in which we can see our own faults more clearly.
At a time of New Year resolutions, it would be good if this book encouraged more readers to take a stand against the untalented and damaging ‘elites’ in our country, just as the author encourages her readers to do in Germany.
Such a platform needs to be debated and widely promoted. For starters, I suggest:
• no more tax breaks for private schools and universities;
• free choice of local schools for all parents, with lotteries where schools are oversubscribed;
• free choice of state universities for all students with the right entry qualifications, with lotteries where universities are oversubscribed;
• attractive bursaries for all students whose parental income means they do not have to pay student fees, so that more low income students are attracted to university;
• two-year exemption from national insurance contributions (by both employers and employees) for the top 10% of every degree class in the UK, whatever sector they are employed in
• a guarantee for the top 5% of performers in every degree class in the UK that they can enter a two-year training programme in the public sector, so that entry into the public sector is on merit;
• a proper wealth tax which ensures that people can spend the money they earn but not the money which they have inherited, through no skill or contribution of their own.
An elite based on merit has many drawbacks – but far fewer than an elite based on family income. It’s time to tackle the deep injustice and inefficiency of our current system. Your suggestions are welcomed.
Reference
Gestatten: Elite - Auf der Spuren der Mächtigen von Morgen, Wilhelm Heyne Verlag, München, 2009 (by Julia Friedrichs).
Why has it been so successful? The tale it tells is not encouraging – but perhaps Germany , like so many other countries, is now ready in the middle of the financial and economic crisis to reappraise the social and economic policies of the boom period.
The basic story of the book is that Germany is now raising new elites – in private universities, in private business schools, in private boarding schools, even in private kindergardens – who are being given enormously expensive education in the expectation that they will eventually take over at the helm of the German economy – its biggest firms, its investment banks and its consulting firms. However, they are not an ‘elite’ in the traditional sense of being particularly gifted – indeed, many if not most of the beneficiaries of this elite education are at or even below average achievement level in educational terms. Their advantage is not their ability, nor even particularly their dedication to hard work or their special ability to work with and lead other people – no, it consists essentially of the wealth of their parents, combined with their parents’ determination that these children will inherit power as well as wealth.
Worse, the book retails how the state is encouraging this new elitism in a variety of ways. At one level, it is importing these ideas of elitism into secondary and higher education in the public sector, in ways which are allowing rich parents to commandeer a disproportionate share of public resources for their own, not particularly gifted, children. For example, it is now common in Germany, as it has been for generations in the UK, for well-off parents to move into areas where the state schools have a reputation for being particularly good – something which Germany has largely avoided until relatively recently. Moreover, the private education sector is benefiting in tax terms from charitable status, just as in the UK, although the effects of this system are far from being ‘charitable’, being to the major disadvantage of the ‘losers’ who are not able to claw their way into this ‘elite’ class of students.
I guess that most UK readers of this book will feel a degree of Schadenfreude . After all, the ills which it documents have already been a central reality in our society and a matter for political disagreement for many decades. It is, naturally, a little comforting to find that others, particularly those who have long enjoyed enviable social and economic circumstances, now share some of the same plight as ourselves. The book provides a journalistic ‘human touch’ to put flesh on the bones of recent academic research, such as the recent book by Charles Harvey and Mairi MacClean into business elites in the UK and France, which demonstrates that the main factors which influence business success in both countries are family and education (along with professional bodies). Nevertheless, it is rather surprising to find that the Germans, who have for so long prided themselves on having transcended the ‘class society’ traditionally associated with the UK and the ‘two class’ society which scars the USA, have recently allowed and even encouraged the incursion of similar perversions of justice, with the economic inefficiencies which they bring in their wake.
However, my main reaction to the book was a reinforced horror of the way in which we in the UK have not only failed to tackle these issues – which are both more longstanding and more serious in the UK than in Germany – but have actually proposed in recent years to make things worse. We now have private universities, privately-funded and -controlled secondary ‘academies’, and are proposing to introduce a new generation of US-like ‘foundation’ schools, where the wishes of parents will override the social values which should be at the heart of any publicly-funded school system.
It is not as if we are unaware of the divisiveness and the mediocrity which ensue from an education system dominated by the decisions and expenditures of rich parents. Research has long charted the damaging effect on the UK economy of inherited positions and the promotion of those young people whose parents have bought their entry into the right schools and universities, irrespective of their abilities. However, this revealing book , which shows us how the same damaging tendencies have now surfaced and become strong in one of our closest neighbours, should remind us that we have been quiet for too long about the nonsense of current government policy, allowing the moneyed ‘elite’ to suffocate the meritocratic society which we once hoped to build in the last half of the twentieth century.
The book does not look beyond the education of the ‘new elite’ – it doesn’t attempt to map out for Germany the damage done to major private firms through MBA-itis, in the way Mintzberg has done for North America. It doesn’t attempt to highlight the demoralising effects on staff which nepotism has had in UK firms. And it doesn’t attempt to quantify the effects of lower innovation in companies due to favouritism towards less capable managers and staff, who happen to have come from the ‘right’ schools and universities. However, it holds up a mirror in which we can see our own faults more clearly.
At a time of New Year resolutions, it would be good if this book encouraged more readers to take a stand against the untalented and damaging ‘elites’ in our country, just as the author encourages her readers to do in Germany.
Such a platform needs to be debated and widely promoted. For starters, I suggest:
• no more tax breaks for private schools and universities;
• free choice of local schools for all parents, with lotteries where schools are oversubscribed;
• free choice of state universities for all students with the right entry qualifications, with lotteries where universities are oversubscribed;
• attractive bursaries for all students whose parental income means they do not have to pay student fees, so that more low income students are attracted to university;
• two-year exemption from national insurance contributions (by both employers and employees) for the top 10% of every degree class in the UK, whatever sector they are employed in
• a guarantee for the top 5% of performers in every degree class in the UK that they can enter a two-year training programme in the public sector, so that entry into the public sector is on merit;
• a proper wealth tax which ensures that people can spend the money they earn but not the money which they have inherited, through no skill or contribution of their own.
An elite based on merit has many drawbacks – but far fewer than an elite based on family income. It’s time to tackle the deep injustice and inefficiency of our current system. Your suggestions are welcomed.
Reference
Gestatten: Elite - Auf der Spuren der Mächtigen von Morgen, Wilhelm Heyne Verlag, München, 2009 (by Julia Friedrichs).
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