Universalism and the budget

Having spent some time pouring over the Scottish Budget, as is my less than joyous task at this time of year, I was left pondering how we are going to cope with what could be ten or more years of this. Then Johann Lamont‘s speech sparked a debate on this very issue.

My initial reaction was somewhat less hysterical than some. On the nationalist left this is death of all Scottish Labour used to stand for, Blairites taking over the party and such like. On the right it is class warfare alighting on “the poorest pay for tax breaks for the rich” elements of her speech. I am not convinced it is either and, unlike some commentators, I have also read the full speech.

The problem is relatively easy to define. If you talk to staff working in public services they will tell you that most public service organisations have struggled through the first few years of cuts by salami slicing services, avoiding difficult political decisions. The Scottish Government has done the same, with the added advantage of being able to dump all the tricky implementation decisions down the line to councils, health boards and quangos. And of course the biggest cut has been taken by public service workers through the pay freeze.

So something clearly has to happen, we cannot simply muddle along like this. Far from abandoning everything Scottish Labour supposedly stands for what she actually announced was a look at the budget to “develop a costed analysis of available policy options at this time of financial austerity”. It is also worth pointing out that Scottish Labour elected a leader not a dictator. Leaders have a duty to lead and to promote a strategy, but Scottish Labour’s policy is decided by a democratic process, so any debate has some time to run.

However, the speech does involve a clear attack on some aspects of universalism. Now I believe very firmly in universal services funded through progressive taxation. The Scandinavian model if you like. Labour has not been nearly radical enough in explaining that you cant have Scandinavian levels of service on US levels of taxation. But before we drift into fantasy politics, let’s remember that the SNP economic policy is rooted in Laffer curve economics.

The main advantage of universal services is that they can reach everyone on the same terms. The main objection to universal services is their cost. Targeting is often presented as being more efficient, less money is spent to better effect, or as Johann has argued, the poor pay for the rich. However, there are problems with targeting because recipients have to be identified; administration is complex and expensive to run. There are often boundary problems caused by trying to include some people while excluding others. Targeting and means testing sometimes fail to reach people in need.

I entirely agree with some of Johann’s examples. The Council Tax freeze is clearly regressive, and the police on the beat target is just political spin. But on prescription charges our members who work in health centres can describe how people asked them which prescription they can do without. Tuition fees can discourage students from working class families from going to university.

There is also a political trap here. The right hates universal services because they build a broad based support for public services. They favour targeting as the first stage in undermining middle class support for public services, so we end up with a US style small state. The NHS has broad support because we all use it, while social housing has lower levels of support because it is seen as a service for the poor and disadvantaged, and is often spatially segregated as well. Targeting services at low-income groups risks creating a two-tier system - services for poor people tend to become poor services. A better model harnesses the power of more affluent service users to maximise the quality of services while ensuring that they do not overly dominate access.

We should also remember that we don’t have universal services or a small state at present. We have a mixed economy and political judgements are made about universal and targeted on a case by case basis. So it is perfectly reasonable to examine this balance at any one time. As the Christie Commission report showed we haven’t got the outcomes right since devolution and there is a case for targeting services at the areas most at need. That doesn’t mean abandoning universalism, but it does mean making sensible judgements about resource allocation.

The political strategy therefore needs to be factored in. The risk with Johann’s approach is that Labour falls back into the managerialism that dominated the last Labour administration in Scotland - or being viewed as simply implementing ConDem policies, rather than campaigning against them. Differentiation is not enough. I fear political strategy is not always Scottish Labour’s strong point.

So I am not going to join in with the chorus of easy condemnation. But that doesn’t mean I accept all the analysis or the possible solutions. However, it is entirely reasonable to open a debate on these issues and for those who disagree to put forward credible alternatives.