Updated: Sep 4
As policymakers try to cope with soaring living costs, most efforts are focused on disposable income. How to get higher wages, tighter price-caps, more generous income support, bigger handouts for the poorest – and so on. Important questions, but why are so few people talking about services?
Services are in-kind benefits that are hugely valuable. They deliver life’s essentials and you don’t have to pay for them directly. They are worth much more to people on low-incomes and they can help safeguard the natural environment. They have a key role to play in tackling not just one crisis but three: cost of living, widening inequalities and the climate emergency. All three crises are bound together by a failing economic system and powerfully influence one another.
It’s not hard to envisage how much poorer – even destitute - most of us would be if we had to pay directly for schooling or healthcare. On the flipside, it’s easy to imagine how much better off and more secure we would be if we could rely on our democratic institutions to ensure we all had access, according to need not ability to pay, to decent housing, childcare, adult social care, transport and household utilities.
But there is a curious void where a coherent policy on public services should be. It is hardly controversial to say that the NHS is a national treasure that must be saved from disaster, that social care urgently needs fixing, that schools are in jeopardy, that public transport is not fit for purpose, that privatised utilities are a disgrace and that housing and childcare are increasingly unaffordable. But these are treated as separate issues and, if politicians address them at all, it’s in a piecemeal fashion that takes little or no account of their combined significance or value. The main thrust of government efforts over the last decade has been to starve public services of funds so that, instead of being improved and extended, they’ve been hugely diminished and some have disappeared altogether.
Boosting services that deliver everyday necessities should be an urgent priority for public policy. This is both an immediate response to the current crises, and a long-term term strategy for sustainable social justice.
Mercifully, there are signs that this view is gaining traction. For the first time this year, the International Panel on Climate Change (IPCC) records ‘high levels of agreement’ that ‘development targeted to basic needs and well-being for all entails less carbon-intensity than GDP-focused growth’. It highlights the role of government actions to support
‘services for provision of public goods’ and acknowledges the importance of changes that ‘reinforce sufficiency and emphasis on solidarity, economies built around care, livelihood protection, collective action, and basic service provision, linked to reduced emissions’.
The Social Guarantee can begin to narrow the gap between rich and poor, and to change hearts and minds by fostering solidarity and mutual support, since it involves pooling resources, sharing risks and working together to make sure everyone has enough to meet their needs. It can shift some kinds of consumption from the private to the public sphere – for example, by replacing individual travel in private vehicles with public transport. And collectively-provided services typically have a smaller ecological footprint than privately funded alternatives.
If the SG has so much going for it, will policymakers take it on board?
Some balk at the prospect of how much it could cost and where the money will come from to pay for it. Of course, costs will depend on the quality and scope of services, as well as on the impact of rising prices on the services themselves. Estimates currently range between 5% and 7% of GDP.
Spending on infrastructure could be funded through borrowing. Delivery costs would have to come out of tax revenues. There’s no shortage of suggestions here. Taxes could be raised through a windfall tax on energy companies and through taxes on wealth, land, data, inheritance, unhealthy consumption, financial transactions and pollution. Any or all of these would help make the economy more stable, fair, and sustainable. For the short term, there’s the option of a renewed quantitative easing (QE) programme. And it’s important to bear in mind that this is a sound investment likely to yield substantial returns in the longer term – for society, the economy and the environment.
Investing now for gains in the future, especially where benefits accrue to parts of the system that didn’t make the original investment, calls for the kind of joined-up, long-term thinking that gets trampled in the rush of crisis management. It takes political imagination and courage to hold the line.
Coping with Covid-19 has laid bare - and greatly accentuated – conflicting attitudes towards public services. On the one hand, most people greatly appreciate all those public service workers who helped us through the dark days of lockdown. On the other hand, just as many are clamouring to cut taxes, without much thought for how
else to fund the very services they value so highly. And there’s a queasiness about government intervention left by several decades of transcendent neoliberalism. The ideology that favours free markets and small states may be grasping for the last straws of credibility, but it still stirs up doubt and defensiveness among some progressive politicians.
The Social Guarantee is unashamedly about more collective action, but this certainly doesn’t mean central government controlling every detail of public service. It promotes a plural economy of providers, as well as devolution and citizen engagement, with a system of social licensing for all providers to ensure that the public interest is paramount.
It can be realised in small ways initially, while establishing a clear, principled route to more substantial changes over time. That means it can shape immediate responses to the crises and lay down solid foundations for longer term development. It is not the answer. But it can fill that void where there should be coherent, joined-up policy to build public services that ensure access to life’s essentials within ecological limits.
Anna Coote is the Director of the Social Guarantee