The shift in public services has only just begun

We asked six experts to give their verdict on the events of 2011 in the key areas of public services, local economic development and regeneration, civil society, poverty, sustainability and housing and suggest the way forward in 2012. Simon Parker kicks the series off by examining the impact of public sector cutbacks

Eric Hobsbawm famously argued that there existed a ‘long 19th century’ bounded by the French Revolution and the First World War, and a short ?20th century that followed the rise and fall of Soviet Communism.

But ?there are moments of transition and uncertainty that fall in-between? these great cycles. These are years when we know an epoch is dying, but? we cannot be sure what will take its place. 2011 was one of them.

Labour’s grand experiment with targetry, reform and high spending ?finally met its end in April, when the first big wave of cuts hit public? services. But while the cuts are already having a huge impact on the ?lives of public service workers and the people they serve, it is? striking how little has fundamentally changed.

Look at libraries, where the debate remains about what should be open or ?closed, rather than about how to reform these expensive and declining ?institutions for the future. Or look at the Dilnot review, which remains ?firmly on Andrew Lansley’s shelf. One of the few radical shifts that is ?taking off – the move to personal budgets in social care – proved to be ?a mixed blessing when my organisation showed that it might actually ?increase costs.

Instead, we have seen incremental changes. Councils have made swathes of ?redundancies and heavily cut services like highways and planning to? protect the frontline. There has been a tightening of social care ?eligibility criteria in some areas. Wages and pensions are being ?squeezed across the board.

Public servants will head off on their Christmas feeling bruised and? resentful, but they will also be aware that 2012 promises to be even? choppier. From police commissioners to health reform, the government’s? legislative agenda will start to bite next year. And while councils in ?particular are over the worst of their four years of cuts, year two is ?almost as big and many of the easy savings are gone.

This is likely to lead to a year of turbulence and adaptation as the? public sector gets used to a wealth of new structures and ?accountabilities. Local government will probably be ahead of the pack in? the transformation stakes – its relative structural stability and small ?number of all-out elections mean that existing plans will continue ?apace.

The chancellor’s autumn statement made it clear that this is only the? end of the beginning for austerity. Cuts will continue into the next parliament and, if the Institute for Fiscal Studies is to be believed, ?the UK’s ageing population will continue to push up costs until the? middle of the century. What we have seen so far is probably just the? beginning of the paradigm shift government needs to undergo to meet the? needs of the coming decades.

What should happen in 2012 to hasten the development of that new ?paradigm?

1. The government needs to stop coming up with new ideas ?for public service reform. The system is already going to be overloaded? next year, and it will need several more years to bed in all this? change.

2. Ministers should set out an ambition to go beyond the current? plans to let councils keep business rate growth – give councils the ?ability to raise more of their own money from a wide range of sources? and let local people decide what they want to spend.

3. The government should start investing more heavily in the LEP? agenda. There is a nascent consensus among the business and local ?government communities that sub-regional partnerships are the way ?forward. Government should support LEPs, where they are ready, to take ?on a greater role in skills, business rate pooling and capital? allocation. City-regions are the future, and LEPs might provide the ?scaffolding on which to build them.

4. Local government needs to develop new kinds of partnership with? the business community and VCS to ensure that all of the resources of? their places are geared towards driving economic and social growth.? Companies spend billions on CSR – imagine what would happen if that were? better directed towards employability and social inclusion?

5. Councils need to start backing up their role as place leaders ?and shapers with a new level of sophisticated commercial nous. Total? place should have a new life as a series of business partnerships with? the NHS and others to pool budgets and realise savings. Local? government’s ability to raise capital gives it a key role as a venture? capitalist, using its funds to start businesses, offer mortgages and? perhaps even club together to set up or buy utilities.

Do this, and we might remember 2012 as the year that a decaying? centralised regime give way to a new era of smaller, more pressurised? but highly entrepreneurial government.

• This is the first in a series of articles from leading thinkers. Read the other articles in the series by Julian Dobson on sustainability in austerity; Julia Unwin on poverty; Brendan Nevin on the crisis in housing; Neil McInroy on alternatives to economic growth and Toby Blume on civil society stepping up