Tag Archives: austerity

Securing the Future of the NHS. A Missed Opportunity? Or Dodging the Issue?

Dr Walter Beckert’s research examines patient choice and competition in healthcare. He reflects on the future of the NHS and the Tory Leadership candidates’ proposals to secure it.

The NHS is an almost universally revered institution in the UK. It is built on principles of social justice and equity, and arguably it embodies the nation’s social conscience.

But as the constraints under which the UK as a society and economy operates dynamically evolve — reflecting years of austerity, Brexit, the COVID pandemic, the cost-of-living crisis –, so do our experiences with the NHS, as a healthcare provider, as a system preventing people from poverty due to ill health, and as our collective capacity to care. It is difficult to make GP appointments, patients face long waiting lists for many elective and also urgent procedures, A&E units are often overwhelmed, and the system exhibits outcomes that are middling relative to health systems of similarly developed countries. There is also recent evidence of an accelerated drive of patients toward self-funding some of their medical treatments, as a means of bypassing the constraints in the system. The system’s public funding (10.2% of GDP in 2019) lags behind the levels seen in countries like France (11.1% of GDP in 2019) and Germany (11.7% of GDP in 2019), with austerity leading to cumulative underinvestment in the NHS and social care over decades.

This raises the question of whether this system in its current form is fit for purpose, constitutes value-for-money, and how it could gainfully be adapted and improved.

One avenue of ongoing gradual change has been the marketization of the system. That process introduced competition between NHS providers and also with private providers. It also decentralized the system, devolving budgetary and organisational powers to the local level. And it introduced an element of mixed public – private funding. Research (Beckert and Kelly, Health Economics, 2021) shows that publicly funded patients may benefit from privately provided capacity, albeit often in a less than equitable manner.

Mixed systems exist elsewhere, e.g. Australia and the Netherlands. And along some metrics their outcomes tend to outperform the NHS’s outcomes. However, the pre-pandemic performance within different funding models was more varied than performance across the models. The funding model itself is not the issue. What matters is the organisation of the system and the level of funding.

The contenders for the Tory leadership — and hence the next Prime Minister – so far have barely touched the NHS crisis, notwithstanding calls for an honest assessment by the head of the NHS Confederation and others, let alone have they advanced any concrete proposals for change that go beyond opaque elimination of bureaucracy. Liz Truss’s apparent commitment to reverse the recent National Insurance rise, intended to bolster the system’s funding position, appears to even aggravate the funding constraints.

But funding is just one element of a necessary national discussion of what we do and reasonably can expect from a healthcare system.  Healthcare systems only affect around 20% of our own health: The rest is due to a wider determinant set of health, including social determinants such as the level of poverty, unemployment, stress, etc. Short-term focussed policy debates typically offer headline grabbing quick fixes. They fail to acknowledge that healthcare – like education – is a long-term investment in health, the economy, and broader societal welfare.

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Final chapter for the public library?

MSc Public Policy and Management student Laurie Sanderson examines the future of the public library.

The slogan, “information wants to be free”, might have come from the 1980’s US hacking scene in the early days of the internet, but it could just as easily be applied to the UK’s 1850 Public Libraries Act, which gave local authorities powers to establish free public libraries in response to a rising wave of civic unrest and working class demands for social, political and economic rights.

Described by Andrew Carnegie as “cradle(s) of democracy”, public libraries were seen as institutions which would not just improve literacy, but foster a sense of citizenship.

In recent years, the UK’s public library system has seen a steady decline in visits. Between 2005 and 2018, the numbers of visitors to public libraries dropped from 48.2% to 32.7% (unlike museums and galleries, which overtook libraries in 2008 and have remained relatively stable since 2012).

Graph showing percentage of UK adults visiting public libraries and museums from 2005-2017

Whilst that decline predates austerity, cuts to local government funding since 2010 have inevitably led to tough choices about which services to prioritize. Between 2010 and 2019, around 773 libraries closed, and spending on the service declined from £1bn to £750 million according to CIPFA.

Around 65% of public libraries are located on, or near, high streets – giving them an undeniable presence at the heart of many of our communities. But so did Blockbuster, and that didn’t stop it being rendered obsolete by the internet. You can find almost any information you need online now. In 2004, the Economist wondered whether the public library would even be with us by 2020 – whilst that was premature, are we reaching the final chapter?

Graph showing library visits vs other UK attractions.We don’t know where the decline trajectory will lead, but libraries still have a sizeable audience. Before the coronavirus pandemic, in 2018/19, libraries had over 220 million visitors. That’s more people than visited all UK cinemas, the combined English and Scottish professional football leagues, and the UK’s top ten visitor attractions combined.[1] That isn’t an insignificant base to start from.

But are libraries still important? They certainly cater to a genuinely diverse audience. The latest DCMS figures show a broad cross-section of ethnicities visiting them (with people of Asian heritage the single largest group). Users are more likely to be women than men (36.7% of women visit, compared to 25% of men), and whilst employed users are more likely to be in higher managerial, administrative or professional than manual jobs (36.6% to 28%), they are also slightly more likely to be unemployed than employed (33.2% to 30.4%).

As a result, a growing school of thought has emerged stressing public libraries are essentialGraph showing library visits by ethnicity 2019-20. spaces within civil society for building cohesion between different groups.

They are places where people from all walks of life can come together and learn – from books and each other. In an age of fake news, culture wars and populism, that feels more important than ever.

So, if the public library isn’t dead yet, and there are powerful reasons for preserving it, what can we do to stem the decline?

A report carried out by Ipsos Mori and the Carnegie Trust in 2016 gives us some indications of improvements which would encourage more people to visit public libraries. Looking at England, the top three are better information about services, more events, and a café or coffee shop on site. Other popular measures include better online and IT services, longer opening hours, and a diversified range of activities and services.

Graph showing improvements that would encourage more users of libraries.

In other words, an improved (online and physical) offering, better facilities, and an increased emphasis on the library as a space for people to come together for events or to access services could revitalize the public library.

The good news is that we can find plenty of green shoots of innovation in the UK and beyond – from libraries digitizing services, merging with bookshops and cafes, and repurposing their spaces for everything from homeless shelters to film and karaoke clubs.[1] It’s too soon to write off the public library just yet.

[1] Public Libraries News, Ideas and innovations in public libraries, https://www.publiclibrariesnews.com/practitioners/ideas-and-innovations-in-public-libraries [Accessed 12 Jan 2022]

[1] Data – from various: https://www.espn.com/soccer/, https://www.statista.com/statistics/268598/premier-league-total-aggregate-attendance/, https://www.cipfa.org/about-cipfa/press-office/latest-press-releases/spend-on-british-libraries-drops-by-nearly-20m, https://www.cinemauk.org.uk/the-industry/facts-and-figures/uk-cinema-admissions-and-box-office/annual-admissions/, https://www.cinemauk.org.uk/the-industry/facts-and-figures/uk-cinema-admissions-and-box-office/annual-admissions/

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Austerity under Thatcher and the Coalition: the second time as tragedy

By Professor Deborah Mabbett, who will be delivering her inaugural lecture this evening, 8 November 2012.

In 1979, a new government came to power in Britain determined to rein in public spending and set the economy on a new path led by private innovation and enterprise. Sound familiar? There are certainly some parallels between the Thatcher government and the current Coalition, but there are also some puzzling differences. Take social security. Both tried, or are trying, to cut back this unloved area of government spending, but their cuts are quite different. Thatcher cut back the state pension, but more or less maintained the safety net of means-tested benefits. The Coalition has targeted many parts of the means-tested system for cuts, while the state pension is to be protected with a ‘triple lock’: indexed to the best of wages, prices or 2.5%. Thatcher’s policy was based on the philosophy that the state should provide a minimal, residual safety net, and the private sector would do the rest. But what philosophy guides the Coalition’s pattern of cuts?

The answer shows something important about the relationship between the government and the financial services sector. Under Thatcher, this sector was not only the great hope for the deindustrialised British economy; it also had a key role to play in privatising welfare. Council tenants exercising their right to buy would get their mortgages from the newly-liberalised building societies, while workers would entrust their pension contributions to investment funds which held out the promise of good returns, albeit reduced by large fees.  Twenty-five years on, the government was forced into a dramatic bailout of the financial system. Less noticed, it is also locked into supporting privatised welfare in expensive ways.

Problems with privatised pensions have been apparent: mis-selling, fraud and high fees have afflicted the sector. The government’s response has been to tighten the regulatory framework, while continuing to encourage contributions with generous tax incentives. Regulation was the price of making finance the agent of the government’s plans: private pensions had to be made to work, and if they didn’t, the government would step in to ‘correct’ the market.  Regulation was seen as a burden by the financial sector, but it could also be costly for the government, as the Equitable Life case showed. Equitable Life made commitments to its policyholders that it was unable to honour: the government ended up having to compensate policy-holders for ‘a decade of regulatory failure’. The failings of private sector agents could come back to bite the government.

Indexing the state pension only to prices meant that it failed to keep up with rising living standards. This was intentional: the idea was that private pension provision would expand to fill the gap. For those who lacked a private pension top-up, means-tested benefits were available. However, the rise of means-testing conflicted with the aim of expanding private provision, because workers can contribute to a pension scheme and then find that state benefits are reduced. While successive governments tried to mitigate the effects with various allowances and tapers, it remained the case that pension contributions could bring a very small return in increased retirement income.

The decision to adopt ‘automatic enrolment’ made it a necessity to do something to restrain means-testing. This policy aims to boost private pensions by relying on workers to accept ‘defaults’ in market transactions rather than actively evaluating their options. The problem with this type of ‘nudge’ is that the nudger must be quite sure that the default is in the interests of the worker. In short, the government must make private pensions pay. The triple lock on the state pension is one step towards this, as it should slow down the growth of means-testing.

Is there any alternative? A much larger compulsory state scheme would avoid many of the problems with private pensions, but apparently that is politically untenable. What makes it so is the continued power of the financial services sector. Privatisation does not stand for individual autonomy and choice – the contributing worker is a passive figure in pensions policy. Instead, privatisation stands for making policies for the financial services sector, protecting its role in provision. The result is inefficiency and expense, complex regulation and a high risk that the government picks up the tab in the end.

The Thatcher government sowed the seeds of a private welfare sector, and the Coalition has reaped an unwelcome harvest. Privatising welfare has locked government and finance into a tight embrace which neither desired but neither can bear to leave.

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