The Autumn Statement will push public services over their tipping point

Adam Lent argues that without a much smarter approach, the quality of public services will continue to deteriorate rapidly. The consequences will be profound.

The quality of our most important public services are now in a sudden and steep decline. For a number of years, the public sector has soldiered on in a very challenging context managing to provide an acceptable if severely weakened set of services. That has now changed. The pressures have become so great that we are genuinely at crisis point. Ideally, the Government would be alert to the situation and responding accordingly but instead the Chancellor has chosen to exacerbate this extremely dangerous moment with the announcement of further spending cuts totalling £30bn according to the OBR. The consequences will fundamentally change the nature of the country for the worse – unless an alternative course of action is taken.

The depth of the crisis can be seen in the excellent public services performance tracker produced by the Institute for Government each year with the latest published in October. Based on detailed analysis, the IfG rated every one of nine core services using a RAG system. This compared performance on the eve of the pandemic against performance in 2010; as well as performance now compared to performance just before the pandemic.

Public Service	Performance 2019/20 cf. 2009/2010	Current performance cf. 2019/2020
General Practice	RED	AMBER
Hospitals	RED	RED
Adult Social Care	RED	AMBER
Children’s Social Care	AMBER	GREEN
Neighbourhood Services	AMBER	AMBER
Schools	GREEN	AMBER
Police	AMBER	AMBER
Criminal Courts	AMBER	RED
Prisons	RED	RED

What is immediately striking is that only one service was performing as well as it was in 2010 just before the pandemic struck and four were performing “much worse” to use the IfG’s own terminology. But the most notable aspect is that every single service, bar one, is now performing worse than it was in 2019/20 and three of those are performing “much worse”. The implication is clear – service quality declined significantly between 2010 and 2019 but has declined significantly once again in the last two years. As the report points out, very loud alarm bells are now ringing about the quality and accessibility of service in the NHS, adult social care and the criminal justice system.

The real world consequences of this speedy deterioration are not difficult to find. Backlogs in hospital treatments rapidly spiralling out of control even before winter pressures have hit. Waits for ambulances lengthening at pace. Social care provision shrinking alarmingly. And the courts system overwhelmed with unheard cases. It’s clear that, during 2022, something fundamental began to break in our ability as a country to care for ourselves.

The Quadruple Whammy

How we got to this state of affairs is relatively clear. Public services have been hit by a triple whammy. Firstly, there are the cuts initiated in 2010 – many of which are far from being reversed despite the last but one prime minister’s rhetoric about an end to austerity. Then there is rising demand for services which has been a phenomenon for many years but which was boosted further when the pandemic ended. Then inflation went through the roof this year putting extra financial pressure on public services which tend to buy a heck of a lot of stuff and pay salaries to a lot of people. By one estimate this has meant the public sector facing a real terms cut of £43 billion. It is this spike in prices combined with an extra boost to demand that has pushed already struggling services over the edge in 2022.

Is there an alternative to this desultory vision of the future? There is but it will take some very smart, visionary and courageous moves from the Government.

And that triple whammy has now become a quadruple whammy with Jeremy Hunt’s announcement of a new round of spending cuts. The extra cash announced for the NHS and social care are little more than stop-gaps for services facing huge funding and demand problems. As a result, the severe deterioration in services seen this year will become a new normal.

The long-term consequences of this are profound. At a human level, it means millions of people dealing with illness, pain, incapacitation, stress and anxiety for far longer and in a greater intensity than they were even a few months ago. Tragically, it will also mean many more early and unnecessary deaths and more anguish and grief for relatives. Economically, it means less people healthy and able to work and it means crime and anti-social behaviour acting as a bigger drag on economic activity.

But more generally, it will just add to the sense of Britain as a nation that is slipping into irreversible decline – a place where things just do not work in the way they are supposed to and where individuals and their families are left to struggle without adequate support from their government. This will damage the confidence of investors, overseas partners and ultimately the country as a whole.

The Alternative

Is there an alternative to this desultory vision of the future? There is but it will take some very smart, visionary and courageous moves from the Government. This is not an easy option but we are all out of easy options: I’m afraid I don’t buy the arguments of those who say that public debt is an accounting fiction that can be resolved with a flick of the Chancellor’s pen. Interest rates and inflation are high and we have just had very clear confirmation of what that can mean when markets think the Government is not serious about fiscal responsibility – millions of families left in terrible financial straits and the Government having to pay even more to keep borrowing, thus compounding the problem.

Firstly, the Government needs to acknowledge that core services are in crisis. This is vital because it then means the next step can be taken which is to develop and implement a crisis-response strategy. This would aim to get on top of the very worst backlogs by working across government departments rather than in siloes, empowering local services to work together and do whatever it takes to solve their most pressing problems. This really needs to be treated as a civic emergency akin to the pandemic and requiring the same boundary-busting, fast-acting solutions. Indeed, the NHS in particular is in such a bad state that there could well be a case for putting the Civil Contingencies Act into operation before too long.

Overlaying this short-term response, the Government needs to urgently develop a long-term transformation plan for the public sector. This should be on an invest-to-save model, as I discussed in a previous post. The goal would be to do what governments have repeatedly failed to do which is shift the public sector towards prevention and away from acute care. This is the only meaningful way to get on top of rising demand and start reducing the cost of public services in a humane and effective fashion.

The quality of our most important public services are now in a sudden and steep decline.

Both of these measures will limit or even reverse the rising costs of public services but both will also require extra funds up front. Given sensitivities on the money markets (and the general ignorance there about the way public services work), it is probably not realistic to borrow the funds. They will have to be paid for by extra taxes ideally levied on the wealthiest at least for a limited period of time to get through the immediate crisis and invest up front in prevention to save over the longer term.

This is ultimately the work of years to put right bad decisions over public service reform and spending that stretch back well beyond the last few weeks. Sadly, the Government has chosen another route that simply replicates those bad decisions and thus will compound the current crisis.

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