Importance of Reform of the UK Public Services - Assignment Example

Why has the reform of the public services been so important an issue in UK politics over the last two decades? The population in UK through the last two decades has experienced a wide range of reforms in public services. These kinds of reforms have had an enormous effect on the political sector of the country. UK government under the leadership of both Conservatives and Labour Party has brought about a considerable change in the history of public services through increased expenditure in the health and education sector. To discuss the importance of such reforms on the UK politics we first need to discuss transition of public services in the history of and politics in UK. Welfare of the citizens is concerned with the rights of the citizens. This idea was developed through last three centuries and gained importance similar to civil and political rights1. The concept of ‘welfare state’ developed in 1934 though provision of National Health Service (NHS) took place only after the Second World War2. The state was not involved in the public services like health, education, housing and income securities in the nineteenth century and the system was run by market services mainly. The failure of such systems led the state to get involved in public services in the form of the ‘Poor Law’. But it increased the expenditure tremendously after industrialization due to low wage working conditions and forced the state to impose restrictions for cost curtailment3. The law left behind the problems of cost control, determination of entitlement and perverse incentives for the British society to face quite long time. For the greater part of nineteenth century the state had restricted itself in mere regulation in working conditions but towards the later half of the century it started working for health, housing and education through the introduction of ‘Boards of Health’, ‘Housing Acts’ and ‘Education Acts’4. But the reforms were not much welcome even among the poor due to the undesirable effects of some laws on their lives. The Liberal Government from 1906-1914 is said to be the pioneer of modern welfare state. They introduced old age pension, selective compulsory sickness and unemployment insurance, school meals, etc. But these reforms failed to earn popularity due to various limitations and drawbacks. The First World War had a significant effect on the social reforms as the post war revolutions in several other countries made the British Government realize that the war stricken community needed state assistance for survival5. To ensure that the nation did not fall back on the state it imposed ‘means test’ and ‘genuinely seeking work condition’ which made securing aid quite difficult and did not help the poor much. ‘Unemployment Assistance Board’ set up by Ramsay MacDonald’s National Government in 1934 eventually introduced some respite. By the onset of the Second World War Britain had already introduced a number of welfare schemes though they failed to address the basic problems effectively. National Insurance Act 1946 was able to bring all kinds of insurance like unemployment, retirement, sickness and maternity under a single system and ensured a minimum safety net at a flat insurance payment rate. The Labour Government introduced Housing Act 1949 which made local authorities build houses for all social classes irrespective of proven need. It was more common than private sector building up to 1958. Education Act 1944 introduced tripartite school education system of grammar, technical and modern schools and fixed the school leaving age at fifteen. This system helped many but the class discrimination it implicated led to the introduction of secondary schooling by mid sixties. The most significant of all was the introduction of National Health Service Act 1946 which made all kind of health related services completely free. The services were made based on tax payments. But this increased expenditure at a havoc rate as everybody wanted to be benefited whether needed or not and forced the government to impose charges on medicines and appliances. This led to political turmoil resulting in resignation of ministers. The welfare system in Britain was based on National insurance and General taxation which were fused in later years to be able to provide services continuously at a lesser cost. Both Conservatives and Labour Party agreed on this system to quite some extent until they were disillusioned about its effectiveness. The leftists found the system ineffective as it could not eradicate poverty and ultimately helped the capitalist policies only6. It was found that a fair amount of British population failed to maintain a certain standard of living. An increase in the number of people dependent on the non-contributory cash benefits was also seen between 1948 and 1978. This led to the demands for increased taxation and radical redistributive measures. The Conservatives argued that the country would not be able to afford so much cost of welfare state with reduced profitability. Thus in their tenure starting from 1979 they concentrated on reducing social expenditure both to reduce cost and public dependence on the state7. According to them, perverse incentive, tendency to producer capture, creation of dependency and support for those who did not need led to the ineffectiveness of welfare state. As a solution to this problem the Conservatives reduced welfare state support as well as the tax so that people can pay themselves for their requirements. They also made welfare systems to ensure savings for the non-working periods of life. The conservatives renewed the concept of voluntary organizations but still the poor remained as such and a number of proposals like education voucher, negative income tax or schemes for employment etc. had been made. The widening gap between public expenditure and taxes earned forced the governments to borrow during 1970s and needed them to cut the expenditure. The Conservatives during their tenure tried to reduce borrowing by making minor changes in social expenditure, e.g., health and education, social security, etc. In spite of all these the Thatcher Government failed in cost curtailment and ended up claiming more taxes contrary to their promises8. In its third term the Conservatives tried to marketize welfare state. In housing sector they introduced Housing Act 1980 encouraging tenants to buy their houses. Marketization in proper way took place after the rate decreased in 1988 the government further introduced an act encouraging private companies and housing associations to buy whole estates from local authorities. A number of whole estates had been passed to voluntary housing societies from the council though only few private companies showed interest to but such societies. New council house building was stopped simultaneously reducing thereby the size of the public sector housing. A number of changes were also introduced in education sector by 1988 Education Act which shifted the power from local authorities and teachers towards parents and governing body. Parents were given options to choose school for their children. The parents in the governing body failed to do much for the benefit of the general parents. Moreover the introduction of national curriculum and standardized test led to homogenized education instead of diversified one. Private schooling was encouraged rather than state schooling. Parents were given voting power to take the schools out of the control of local authority and it was found that more than 1200 schools chose to opt out. The voucher system earned a lot of rage from teachers as the system would transfer the fund from the local authorities and thereby schools to the parents, the consumers. It was introduced in 1996 by the Major Government but did not take off fruitfully and was terminated by the Labor Government in 1997. In health sector government introduced internal market where District Health Authority or GP would pay on behalf of patients to self-governing hospitals. The government expected competition between hospitals to improve service but instead the GPs started to make choice for the patients at cheaper hospitals and were reluctant to prescribe drugs for patients to avoid payments. The government tried to introduce choice to the public but ultimately kept the power of choosing to itself through GPs. At the end of the tenure of Conservatives it was clear that the reforms in NHS were not able to reduce expenditure in health sector. The reforms made during the tenure of Conservatives did ensure some improved service quality but it could not do much to eradicate poverty. The unemployed people dependent on benefits were poorer, the number of state dependents increased, and inequality in standard of living increased. But still it can be said that the poor did receive benefits during this period though at a slower and trimmed rate. The Conservatives tried to encourage people to opt out of state benefits and thus tried to help those who were unable to look after themselves. The Labor Party under Tony Blair introduced new concept of Communitarianism and Stake holding related to welfare state9. This concept shifted some responsibility towards the citizen also. It emphasized on increased opportunity for individuals and cooperation between state, voluntary and private sectors. The new government did not nullify the works of previous Conservative government but tried to carry them forward with the notion of ‘citizenship’. They concentrated more in avoiding social divisions and tried to ensure participation from the bottom-line people to the mainstream society. The policies of Blair had more in common with that of Conservatives. This government did not attempt to move back from price index to earning index and reduced single parent benefit. The government intended to keep Conservative spending plans but increased expenditure health, education and social security within one year. This government did not make any major change in health and education sector, though it turned all GPs to fund holders through introduction of Primary Care Groups. Here it supported Private Provision but with changed taxation system it had been difficult. This government also encouraged savings for old age. It retained the national curriculum and standardized test systems in education10 (Lublam & Smith 2004). The Blair government showed innovation in setting up ‘Social Exclusion Unit’ to coordinate the activities of government departments dealing with social exclusion. The government wanted to integrate all excluded people back to the society. The ‘Welfare-to-Work’ programme introduced by Blair made the youths to seek job and the employers were given subsidy for taking them. All single mothers, disabled or older people were made to meet advisers for possible job opportunities and benefits were cut for dropouts. Though these systems were introduced earlier also still these were significant for Blair Government as these systems differentiated the government from Conservatives and Old Labours and led to the concept of ‘Third Way’11. But these reforms made British public and activists not very happy as they were accustomed to state aids. Protests within the government also made the reforms slowly. Poverty also proved to be a nagging problem as low paid work created little better position than state benefit. Unlike US, Blair Government did not remove all benefits if a young man refused job search and this also made the system bit weak. Blair Government also saw increase in social welfare budget owing to increase in number of single parent, huge claim for disability benefits and longer retired life. The increase in expenditure in social sector was brought about during the second phase of Blair tenure mostly to avoid risk of losing votes12. The largest increase was made in health and education sectors implying to almost 6% increase per year. The government made plans for reforming health sector, which faced years of underinvestment. Categorization of NHS organizations had been done and fund had been supplied based on quality of service. Commitments were made to ensure availability of nursery education, increased number of childcare centers and neighborhood nurseries in disadvantaged areas13. Care had also been taken to reduce number of children per class. At secondary level the students in the age group of 13-14 were targeted for more vocational kind of education. Recruitment of teaching and support staff were also taken care of. Concept of Private Finance Initiative (PFI) had been introduced in both education and health sectors to ensure diversity14. Education Action Zone, Health Action Zone, etc. were made to improve services. Thus Blair Government had introduced a number of reforms to the welfare state sector. To assess the whole system of reforms, it can be said that the institutional diversity may be an element for creeping privatization15. The New Labour Government tried to introduce multi faceted reforms, which may be the evidence of their confusion, and contrary to their ‘Third Way’ notion they ended up showing the continuity only with the previous governments’ acts. Lack of proper address to fundamental issues by the Blair Government made this impossible to have a long term effect on public sector reforms, especially in education16. But Blair could surely achieve a significant shift in the approach to health sector. His health strategies left less impact on health inequalities and mental health. Though some lacking was there but it was Blair who could recognize the problem with Treasury Type outcome targeting and recognized the need for more resources. There are some complaints among health professionals to follow a target always. State monopoly may also be detrimental, as consumers used to huge number of choices may not tolerate to be directed to certain school or certain doctor17. But it can be said that judging a medical service may not be possible without high technical knowledge thus consumer may not be able to choose the right option. In education also children could not make choice of their education but their parents do keeping in mind the future opportunity and not the happiness of children. Thus it may not be true that increased choice ensures efficiency of service. So in these cases government’s assistance may be helpful18. The combination of market incentives in public service with more consumer power, higher public spending, work incentives and redistribution is quite a distinctive feature of Blair Government and the changes observed can be stated to be the “…result of a fundamental shift in policy-makers’ beliefs concerning human motivation and behaviour.”19. The politicians to win the working class frequently used the system of welfare state. It also helped in capitalist economy as most of the basic demands being met by the state the capitalist firms needed to pay lower wages. Their market also grew from supplying state aided systems. But it can be said that the working class always needed to place their demand first and worked towards its remittance, as the state would not have bent otherwise. References 1) Dearlove, J. & Saunders, P. 2000. Introduction to British Politics. 3rd Ed. U.K.: Polity Press 2) le Grand, J., 1997. Knights, knaves or pawns? Human behaviour and social policy. Journal of social policy, 26 (2). pp. 149-169 3) Lipsey, D., 2005. Too Much Choice.Prospect (117). [online]. Available at: http://www.prospect-magazine.co.uk/article_details.php?id=7128 (accessed on 23 June 2008) 4) Ludlam, S. & Smith, M.J., Eds. 2004. Governing as New Labour: Policy and Politics under Blair. U.K.: Palgrave Macmillan. 5) Seldon, A. & Kavanagh, D., 2005. The Blair Effect 2001-5: A Wasted Term? U.K.: Cambridge University Press Read More