Ed Miliband is due to deliver the Hugo Young lecture tonight. His subject will be public sector reform—or rather, since that phrase has the whiff of the kind of New Labour “statecraft” that Miliband and Labour’s policy coordinator Jon Cruddas (whose fingerprints are all over this speech) want to move beyond, a “new culture” in public services.
In an article in the Guardian this morning previewing the speech, Miliband identifies two failed models for the delivery of public services: “old-style, top-down central control with users as passive recipients of services”, on the one hand, and “a market-based individualism that simply transplants the principles of the private sector… into the public sector”, on the other.
Public sector reform under New Labour left behind a dysfunctional mixture of both these approaches—the “outsourcing” of services to private providers combined with a highly centralised regime of performance audit. “Too often,” Miliband writes, “large public-sector bureaucracies have been replaced with a large private-sector bureaucracy. A Serco-G4S state can be just as flawed as the centralised state.”
I examined the “public services industry” in this country, which is dominated by a handful of large and powerful firms including Serco and G4S, in a piece in the February issue of Prospect. As I observed there, even though the pace of outsourcing has accelerated under the coalition (driven by the Health and Social Care and Welfare Reform Acts, as well as the introduction of the Work Programme), some senior members of the government acknowledge that in many sectors the big providers like Serco and G4S operate an oligopoly. Francis Maude, the Cabinet Office Minister, told me that he thought many government contracts have been too big, “which basically froze out small businesses”.
But Maude also insisted, against accumulating evidence to the contrary (including investigations by the Serious Fraud Office of contracts held by Serco and G4S), that there was no “argument for slowing [outsourcing] down. We just need to be finding better ways of doing things.” Miliband, by contrast, is envisaging something very different. To adapt the old slogan of the International Socialists, you might summarise Labour’s new pitch on public sector reform as follows: Neither Whitehall nor Serco, but local devolution.
Where “choice” for the citizen-consumer was the watchword of the Blairite reforms, for Miliband the key word is…