Labour needs to move beyond the big state

In Labour's retro leadership election, only Liz Kendall has thought seriously about giving power back to the people

July 29, 2015
Which Labour leader can rally the party's disaffected supporters? © BBC/PA Wire/Press Association Images
Which Labour leader can rally the party's disaffected supporters? © BBC/PA Wire/Press Association Images

There is a Labour leadership election so Leviathan is stirring. There is something faintly depressing about the fact that the biggest ideas to come out of the race this week are a "National Education Service" and a "National Care and Health Service."

The "NES" comes from Jeremy Corbyn's campaign. This would be a big national lifelong learning bureaucracy. It would provide everything from pre-school education to adult night-classes—it would be a clunking monster. As for Andy Burnham's monster, it basically nationalises social care. Rather than simply finding some new way to provide funding to individuals to purchase care or councils and others (including the private sector that Burnham so abhors in the NHS) to provide it, a big bureaucracy would be established. It's not altogether clear to what question about public services "much more bureaucracy" is the answer.

Last week, there was a powerful attempt by Liz Kendall to question the way power flows and the role of a future state. Her approach was precisely the opposite to that of Burnham and Corbyn. She questioned how to re-balance power in favour of people and away from big bureaucracies and called for “a new political settlement which devolves power to the nations, cities, towns and counties of Britain. It means radical reform of our institutions so people have a say and a stake in how they are run. It means supporting people, as individuals and in their families and in their communities, to have control over the resources and services that shape their lives.”

So far, in Labour’s retro leadership election, Corbyn and Burnham are the back to the future candidates. Yvette Cooper is happy to avoid big ideas altogether in an attempt to be all things to all people, and has ended up as nothing in particular to anyone in the process. Kendall is the only one to seriously address society's ebbs and flows. The world as it is largely passed this leadership contest by. At the same time, the nature of power in British society is changing—through a mix of values, civic energy, technology and political design.

The power structures of the 20th century, reliant on hierarchical, technocratic methods, are weakening—albeit unevenly. New forms of collective power, some reminiscent of pre-welfare state social action, are emerging. But unlike the rise of the welfare state, where these forms of social action were supplanted or superseded, old power will not be entirely eclipsed. In fact, it could be a vital element of the pursuit of a more widespread and creative sense of human agency.

Before the modern welfare state existed, people came together, they associated and co-operated. They formed trade unions. They fought poverty together. They shared their goods and services—from groceries to a decent funeral. It was largely as a result of people coming together and associating through co-ops, non-conformist churches or unions that the foundation for parliamentary action through the Liberal and Labour parties was laid.

Today, whether we look at the food bank movement or the growth of credit unions, civic action is again stepping in where the state and the market fail. This is most evident in the US "metro" context, but increasingly it is the backdrop to change in the UK as well. The social movements of today might be the significant institutional changes of the future.

Recently, power in the UK has been devolved—first to Scotland, Wales, Northern Ireland and London. Now the government is extending this to many of England's city regions. The minimum wage and now the National Living Wage have been introduced. And despite recent cuts, tax credits remain an important aspect of the modern state.

In all these cases, power has been used in traditional ways: mass party organising to grab hold of the state and use its resources to the ends of justice. This approach was right for those times, but now the way that power can be used—and is being used—is changing fundamentally. The power of the big, technocratic state is waning and the energy of "person to person" action is gaining.

Things have gone full circle. Once more, social and economic energy lies increasingly with people rather than big institutions—just as it did before the long march of the social democratic state. This is not to say that national institutions won’t have a part to play in the future. But person-to-person social action is becoming more energetic. We are seeing it improve places, help people cope with long-term health conditions, enable people to extend their learning and contribute to a better environment, and spread economic opportunity. Increasingly we see the emergence of a smart state that works with the people rather than for them or on their behalf. Smart government fulfils its statutory duties, of course (around child protection and universal education to 18, for example), and it provides a series of public goods such as a taxpayer financed NHS or social security. But it seeks to incubate and accelerate innovative responses to complex challenges beyond that. In other words, it is different from the traditional social democratic state in that it acts as a partner in social change instead of commissioner and provider. It relates rather than dictates.

Person-to-person social change where people come together—fired by co-operative endeavour, sometimes facilitated through widespread technology and social tools, and use their collective leadership to improve their lives, their community or their locality—demands a very different form of political and social action. It is action that we are seeing across the UK.

The key to person-to-person action supported by the smart state is that it’s not enough to just step away and leave people alone, as a libertarian (or enlightened anarchist) would and simply trust the emergent community alone. For sure, sometimes the state should get out of the way by removing legal, administrative, or procedural hurdles. However, inequalities in social, cultural, and technological capital mean that communities will vary hugely in their capacity, so government doing nothing frequently perpetuates social injustice. The key is to target resources to people and places with the potential to overcome these relative disadvantages; and to recognise that the resources that most matter may not be financial or legal in nature. They may require an incubation and acceleration culture; there are many examples of just this type of fusion. Such an approach also creates a clearer sense of expectation of person-to-person action in order to change communities.

If we are to increasingly work with people to help them to enjoy a better quality of life, it needs smart Government and local leadership allied with the energy of people themselves, working together. The point is not that new power—of people working together applying new values, knowledge and forms of social connection often tech-enabled—will replace old. The question is how can we get the best out of new and old power combining their respective strengths to underpin latent creativity.

That’s why the Big Society didn’t work. The problem with the Big Society is that it assumed a new civic energy would thrive simply by the state getting out of the way. In places where there is already a strong and well-resourced community that can happen. But in the main the energy is difficult to sustain and magnify without some support. So the Big Society went nowhere.

Now devolution of power to city regions is the idea everyone is talking about. But the current approach to city-devolution risks underplaying its potential. The idea is simply to devolve power and resources to city-regions and hope for the best. That’s not enough. A town hall bureaucracy can feel just as remote as a Whitehall one. We need to go further. Power needs to be devolved to people in neighbourhoods and in public services. Devolution is essential and we need more of it. But there should be a far more assertive step—power has to be decisively recast. Luckily, there are already numerous examples of how.

The power of place

When Brixton Market in South London was scheduled to be redeveloped a group of local people not only resisted but they came up with their own alternative plans. The council put the developers and a social enterprise called Space Makers Agency together with the "Friends of Brixton Market." Six years later and Brixton Village, with it amazing food and atmosphere, is a thriving hub of community regeneration.

The same happened in Broadway Market in East London where one of the capital's great markets has been transformed. Surplus funds from the market go to local community projects, schools, youth organisations and pensioners’ groups. The project was led by volunteers and Hackney Council came behind them in support.

These are not an isolated examples. In Toxteth in Liverpool, like Brixton an area blighted by riots in the 1980s, local residents fought back against the neglect of their neighbourhood. This is a beautiful part of the city with handsome housing stock that had been abandoned over the course of two decades. Now a community land trust has been given ownership of derelict properties by Liverpool City Council.

They are being refurbished, there’s a vibrant street market and the area has won a Northwest in Bloom award. You can see what happens when people together and a council gets on board to help them out. It is transformative and this activism can change people’s lives. There are few things that are more precious than pride in the place you live. In all these cases barriers were removed and support given but it was people themselves who drove change.

We are seeing a similar story with Ancoats Dispensary in Manchester where again the community has claimed ownership of a civic space for community rather than simply private benefit. They were supported by Heritage Lottery Fund. It's the same story in Skainos, a thriving community space shared with businesses and residents in East Belfast.

What all these cases show is the route to a better society runs through people committing to work together. And this works best when they are supported by local and national institutions—including the Big Lottery and Heritage Lottery Fund. Each of these cases show the power of person-to-person power reinforced by smart state action.

We are often told that people are happy to leave it to others or that they just want the state to do it for them. Yet are seeing a wide range of people—whether they are professionals, service users or citizens—taking up power when they have the opportunity to do so. We see the same thing when we look at people’s economic and personal well-being as well as the places in which they live.

Person-to-person well-being

Take the Cuckoo Lane Surgery in Ealing. It is not run by GPs. It’s run by nurses. And the Care Quality Commission has just rated it outstanding. Why? Because it teams up with Age UK to make sure that older patients who live alone get the right support and advice, it helps ensure those with mental health conditions are treated locally rather than in hospital, and supports patients with long-term conditions with proper self-management plans. It gives people greater stability and control over their lives.

At a larger scale, Alliance Scotland is driven by 300 members. The initiative funds community and voluntary groups who are developing new ways for people with long-term conditions to self-manage. But there’s a twist. A key element of the programme is that those who receive support have to be involved in the design, delivery, implementation and evaluation of the projects. This approach encourages community group to work with local government and the wider voluntary sector. Alliance Scotland has supported well in excess of 100,000 people.

Loneliness is a blight on lives. That’s why the work of North London Cares has been so crucial. They bring young volunteers together with older members of the community to combat loneliness and isolation. This is cross-generational person-to-person care. Most of the older people North London Cares helps live alone. Those who receive support report being less isolated, lonely, more connected to the young and feel more secure. But the impact on the young people is just as profound—they feel a greater sense of belonging in their community and feel they are making a contribution.

None of this can replace the essential work of the state. Safeguarding the welfare of the vulnerable is a statutory duty. Services have to be funded and supported. And we will always need a strong underpinning of decent state services. But we need to ensure far more than the state alone can provide.

Professionals engaging with the community, helping people who receive services to steer them, bringing people together in new and innovative ways, these are the essence of powerful new ways to pursue social justice and ensure that people have a better quality of life. The digital revolution supports these changes as it becomes easier to reach people, bring them together, provide more access to data, knowledge, ideas and tools of organisation. But it is the energy and commitment of people that turn this infrastructure into real change.

There is now an argument for going much further. Many have argued for an increased "voice" for consumers. That is fine and important. But "voice" is only really powerful if it always has some control over resources. Person-to-person social justice relies on new citizen budgets in social care, healthcare, education, welfare, and in communities.

Place is crucial to well-being. But new forms of power need to have an economic impact too.

New Power and the Economy—opportunity, jobs, learning and finance

Sometimes we will have to look elsewhere for inspiration. And the greatest example of what smart local initiatives can do when combined with new forms of people-led initiatives comes from Cleveland in the United States, where a number of key local institutions ("anchor institutions") such as the local housing associations, university, hospitals and the city administration got together. They decided to ensure that the money they spent would contract services from local, living wage employers with a special focus on a local co-operative called Evergreen. It manages a food grower and supplier, renewable energy company, and laundry service. Evergreen has created not just jobs but good jobs and has helped improve the locality, provide good affordable, shared-ownership homes and benefits the environment.

This is yet another example of what can be achieved by enlightened public institutions working with people-power. There are some examples of this approach emerging in the UK.

In 2011, Preston City Council, like Cleveland, decided to act as an anchor institution acting in support of co-operatives by leveraging public sector buying power. It is not doing this by providing grants, but through establishing networks of support. They call it a "community wealth building initiative."

Nottingham University Hospitals NHS Trust has committed to buy local, high-quality produce. It was given a Soil Association award as a result. It has been cost neutral for the hospital but now means that an extra £2m is invested in local sustainable businesses.

There has to be a focus on economic opportunities for the young, especially. That’s why the work of social enterprises such as Livity in Brixton is so impressive. There is a deal at the centre of its work: companies need to understand what drives young people so Livity engages them in its work—it is a youth audience-focused marketing company. But Livity gives back, making grants, mentoring young people and making sure they have opportunities to come into their office and gain experience as well as running an ongoing apprenticeship programme.

Hackney Community College has set up a new company, Tech City Apprentices, which has placed apprentices with tech companies such as Thomson Reuters, Credit Suisse, the advertising agency, Mother, digital developers, Poke, and leading online printing firm, Moo. Both Livity and Tech City Apprentices show what can be done when public infrastructure such as the apprenticeship system is applied creatively to get many young people who are less advantaged into inspirational opportunities. Anchor institutions can be bridging institutions too and create new forms of social and economic power in the process.

And learning is such an important part of the future: social justice requires both social mobility and social cohesion. Learning is changing in ways we have barely begun to comprehend. There is a quiet revolution going on with literally millions of people globally sharing their knowledge and skills and people learning from them to improve their knowledge and capabilities. At the RSA we have termed this the "spontaneous shared learning economy." Some of this learning happens through local on and offline networks. Some is more formal, through learning networks like Udemy or simply through YouTube.

This open learning surge gave Chicago’s Mayor, Rahm Emmanuel, an opportunity to establish a new city-wide mission, the "City of Learning". He encouraged young people to attend short courses in the city’s colleges, parks and community groups so they could learn new skills instead of idling away the summer break. The project is now year-round and has been copied in Pittsburgh, Dallas and Washington DC. Public, voluntary and private organisations provide opportunities, kids and young adults pursue their interests and support each other in their learning. This is what smart power and social justice in a modern setting look like. Why can’t we try cities of learning here?

Open learning is crucial, but so is opening up access to finance. There is some good news here too. Goldsmiths, University of London has found that the number of people becoming members of credit unions has doubled in the last decade. Credit unions are increasingly becoming alternatives to pay-day lending firms that charge crippling rates of interest. However, that creates financial sustainability challenges. The Archbishop of Canterbury has committed the Church of England to supporting the sector. Is there more that banks can do—or be compelled to do—to help underwrite credit unions as a commitment to local communities in which they operate? That’s what happens in the US through the Community Reinvestment Act. The result is that the credit union sector in the US dwarfs that of the UK.

We are increasingly seeing new forms of finance emerging, whether it’s peer-to-peer funders for business such as Funding Circle or for individuals such as Zopa. Crowd-funding platforms such as Kickstarter and Crowdcube create new sources of finance for social enterprises and community initiatives. The question for us is what can be done to provide even more support to these sectors? Sometimes public bodies might be able to provide the role of guarantor and accelerator for vital initiatives of the type we have been discussing.

There is also crossover between finance and wider goals such as combating climate change. A partnership between the village of Fintry in Scotland and Energy4All, financed by Falck Renewables has enabled the village to own a wind turbine. That means that the village is receiving between £50,000 and £100,000 a year, which is expected to rise to £400,000. With the money, the village trust is insulating properties and improving the energy efficiency of its public buildings. This is great. We need more Fintrys. Local and national government can pull together its planning powers, regulatory powers, and financial heft to support more Fintrys.

All these possibilities are ripe for large-scale acceleration and dispersal. But there's still a blockage—our politics.

New political form and purpose—a different way of governing

Can old-style parties make a real contribution to change? The answer is yes, but only if they change radically.

Parties must become part of wider social movements. Too often they either stand apart from others or else co-opt them. Parties must seek to work with others and let them lead, working out where they add value and where they don’t.

Take the living wage campaign. There have been few more successful social justice campaigns in the last few years. It happened through civic action linked to trade unions, churches and other groups and institutions. Both major parties have been heavily influenced by the campaign (though the adoption of its name by George Osborne for a policy that isn't actually a living wage has gone down very well with campaigners). Sometimes parties must be participants in person-to-person change led by others and be comfortable with that. This requires a very different mindset.

At their best, parties are community agitators for change as well. Such an approach has been taken be Paul Cotterill, who won a challenging seat for Labour on West Lancashire Borough Council. He has quite a unique take on things. “All politics is local, even at constituency scale," he says. "Just do stuff. Throw away the Labour stickers. Stick the Voter ID sheets in the shredder. Come election time, if people know what you’ve been up to, they’ll vote for you. If not, they won’t.”

Coterill's local record is formidable. That’s what the parties should be about: doing stuff, not taking stuff over. Doing it with people who have the ideas, skills, passion and resilience to make a real difference.

And what about the role of government? That has to fundamentally change too.

You’ll notice there’s not a traditional ten-point policy plan here. That’s the old power approach. Pull the levers and the change will happen. But it often doesn’t. Just take the failure of the New Deal for Communities established by the last Labour government. A significant investment that promised a lot. It was consultative and it was run by people with passion—the absence of "voice" wasn't an issue. But it ended up being too formulaic, inflexible and tied up in bureaucratic knots. We need to learn the lessons. The Big Society was too empty and too naïve. Instead, we need a smart set of governing institutions that looks to go with the grain of the changes we are seeing. It will need to be a bit more like an investment fund, providing seed capital and building capacity, looking to support the best while identifying realistic ways of plugging gaps.

But most important of all, government needs to know when to step back and when to step in. It has to combine its resources and power throughout all public institutions, local and national, and seek allies for change. It will motivate and cajole from time to time. It has to have clear social justice goals and it has to balance economic and personal well-being with quality of life and support for great places where people can thrive, not just survive.

This is a different way of thinking about governing. We can’t go back to the inflexible models of the past. Nor should we accept that government should just get out of the way. Smart government, the energy and passion of people who want to initiate change together, is the route to greater social creativity, productivity and justice. The opportunity is right here, right now.

An earlier version of this piece appeared on the RSA blog. Anthony Painter writes here in a personal capacity