Policy & Politics

This page contains posts on politics and policy relating to Urbanism, Austerity and other issues that are of interest to CURA, in the UK and internationally.

Disability and the Bedroom Tax: Discretionary Payments Violate Statutory Rights

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The Guardian reported today that the Appeal Court have ruled the Bedroom Tax unlawful with respect to two cases – a victim of domestic violence “A”, and a severely disabled teenager, Warren Todd.   The outcome is an important stepping-stone in the campaign against the Bedroom Tax, but the government has been given leave to appeal to the Supreme Court.

The Bedroom Tax is a benefit sanction against those deemed by the Department of Work and Pensions to have a spare bedroom. Those affected have either to move to a smaller property, face housing benefit deductions or rely on a local authority subsidy to make up the difference. There have been a number of cases of disabled people being threatened with the loss of their homes. In the case of Warren Todd, the DWP argued that his family’s challenge to the Bedroom Tax on grounds of discrimination lacked credibility, because local authorities can make Discretionary Housing Payments (DHPs) to anyone sanctioned if they see merit in the case. An earlier High Court ruling accepted this logic, finding that the responsible authority, Pembrokeshire County Council, had covered the rental shortfall through a DHP, and there was no evidence to suggest it would stop doing so in future.

The reasons for the Court of Appeal decision are not yet completely clear – it ruled that the Secretary of State had failed to justify “admitted discrimination”. However, the ruling does suggest that the argument over DHPs is vitally important. Does the UK Government have a duty to recognize the rights of disabled people, or can it be left to the “discretion” of local authorities? How, logically, can a “discretionary” payment be construed as upholding statutory rights of disabled people not to suffer discrimination?

It is plainly wrong in principle to suggest – as the High Court did – that statutory rights can ever be upheld on a “discretionary” basis. Moreover, the High Court ruling ignored two important facts about DHPs, highlighted by our ESRC funded austerity research. First, there is no guarantee from Government that discretionary grants to help councils manage the transition to new benefit regimes will be retained long-term – local officials certainly think of them as bridging funds. Second, we know that some authorities attach conditions to DHP, meaning that a “spare room” is subsidized only if the recipient shows willing to move to a smaller property. The bedroom tax remains a looming threat for anyone in these circumstances.

DHPs cannot substitute for statutory rights in theory, and our research shows that they cannot do so in practice either. The Court of Appeal appears to recognize this, and if the government launches a challenge, disability rights in this country will depend on the Supreme Court upholding its eminently sensible ruling.

Professor Jonathan Davies is Director of the Centre for the Urban Research on Austerity

 

Learning lessons: we need to encourage more policy sharing and less innovation

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Sophie Wilson from the Institute for Government argues that there is too much focus on innovation in public services, and the we should focus more on learning from, and expanding, ‘what works’.

We all like new things. Whether it’s the latest gadget or an app to switch your heating on remotely, innovations are exciting. And this is no different in public services. Countless innovation funds and piloting programmes encourage local areas to develop and test ideas ranging from government initiatives such as the Transformation Challenge Awards through to programmes led by the voluntary sector like those available to social entrepreneurs from UnLtd. Without funding for early stage ideas you don’t get things off the ground.

So while there’s no denying the importance of trying and testing new approaches to public services; the emphasis on innovation over duplication means local areas may risk repeating the same mistakes or focusing resources on challenges that have already been solved elsewhere. This is something picked up on in the Institute for Government’s paper Joining up public services around local, citizen needs  which highlighted how a limited sharing of ‘what works’ in different circumstances can mean that the lessons from effective practices are rarely built upon (see p.12). Barbara Young, formerly chief executive of Diabetes UK, has also consistently argued the need for more plagiarism in the voluntary sector. In this way, encouraging more areas to copy instead of create could be a route to efficiency savings as well as better services for citizens.

Blunt replication of programmes or strategies from one local area into another is unlikely to be the solution to the challenges facing public services today. However, there are opportunities in increasing the diffusion of effective programmes through the sharing of innovations, ideas and practice, and the subsequent adoption or adaption of these ideas in a new local area. It is unlikely that a programme can, or should, be scaled up and rolled out across the country in exactly the same way. Local areas are different and public services should be able to cater for this diversity as recognised by the Government and its devolution agenda. But, greater sharing between local areas around how they can implement a new programme, the barriers and enablers to doing this, the resources and capabilities needed, as well as links to useful contacts could help areas to shortcut parts of their design process and help to save time and money. Context matters. Nevertheless, applying what we already know and adapting this with a new environment in mind can support local areas to build upon existing practice and avoid reinventing the wheel.

In fact, local areas are already doing this; whether getting ideas from conferences, participating in professional networks like SOLACE, or independently setting up visits to areas that appear to be doing something interesting. But, this is not yet something that systematically occurs across local government; whether because of a distinct professional culture or cultures, transport links, misaligned incentives, a lack of time or one of a myriad of other factors.

In response, the Institute for Government are starting to think about how to encourage greater sharing of practice between local areas. This has begun with a look at some of the intermediary programmes and organisations that connect local areas with each other or with interesting practice and ideas such as the LGA peer challenges, the Audit Commission or the seven What Works Centres. We want to understand what limits local areas from sharing more frequently, and increase attention on the diffusion process itself as an important, under recognised means of supporting areas as they redesign or recommission services.

As is often pointed out, devolution provides an opportunity to innovate by designing services around local, citizen needs. But increasing localisation also increases the importance of finding effective ways of sharing practice between local areas to make sure learning spreads throughout the country. This is especially important in the context of tightening budgets and increasing demands. Copying from your neighbour may have been frowned upon in the classroom, but it is an essential part of designing a smarter state.

Sophie Wilson is a researcher at the Institute for Government. If you’re interested in hearing more or contributing to the research she is involved in, take a look at the IfG’s project page or get in touch with her at sophie.wilson@instituteforgovernment.org.uk

Making the most of the devolution revolution

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In his budget statement last week, the Chancellor spoke again of a ‘devolution revolution’. Other areas beyond Greater Manchester will receive new powers and responsibilities previously held in Whitehall. Agreements with Sheffield, Cornwall and Yorkshire are underway, with more to follow. It can be hard to keep abreast of these developments, as each agreement contains a unique pattern of policies to be devolved, resulting in varying degrees of local control. We are supposed to see the agreements as great successes, but with little sense of what it all amounts to.

What is devolution for? New Economics Foundation (NEF) has been working with the Crick Centre at the University of Sheffield to map the arguments made for devolution, in order to address this crucial question.

We recently released the findings of this research which can be found here. A summary is shown in Figure 1 (click on the image to enlarge)

FIG1

Advocates of devolution point to economic growth as the main motivation, above all other concerns. On average, just under half of all arguments for devolution refer to its role in creating economic growth. Improving the effectiveness of public services came second with 23.7% of arguments, and strengthening democracy third at 12.9%.

From the perspective of central government departments, local governments and think-tanks alike the focus is economic growth. Creating growth in parts of the country which have struggled economically is a laudable ambition, and one that merits discussion, but it also matters how growth is discussed and what it is taken to mean.

We found that economic growth arguments are weak on explaining how growth would be achieved and focus primarily on benefits to the national purse. How income-to-cost-of-living ratios, which affect everyone’s day to day economic reality, would be affected by devolution is seldom mentioned. Reducing poverty through economic growth is mentioned only four times in a total of 1,129 arguments. Numbers of jobs created are discussed far more than the quality of jobs.

Devolving economic powers over skills, housing, business rates and enterprise could in theory improve how the local economy works for its residents and local stakeholders. Yet the current focus pays little attention to how devolution would improve the lives of local people.

A s Figure 2 shows (click on the image to enlarge) Creating a more democratic country seems an obvious aim for devolution but in fact is neglected by advocates of devolution, particularly advocates in local government.

Figure-2_devo

On average local governments refer to strengthening democracy in only 9% of the arguments they make for devolving power. They neglect the expanded role citizens could play in decision-making if decisions are made closer to home and rarely discuss the ways in which devolution could increase the accountability of elected leaders to the public. Simply creating elected mayors is not enough to revive an ailing democracy. This is why local governments should also be considering the mechanisms for citizen participation which could make devolution worthwhile.

One change could make all the difference as the devolution revolution progresses. This is to bring the debate into the open for public discussion, locally and nationally, so that everyday economic concerns feature strongly in discussion of economic growth and establish a model for more accountable, deliberative democracy. The debate has so far been conducted in the backrooms of Westminster rather than in public forums.

Several parties in government have proposed a Constitutional Convention, but are yet to act on the proposal. The convention model is a citizen forum bringing together a representative sample of people to discuss changes underway in the governance of the country. In the meantime, a group of academics and civil society groups have piloted this model in Sheffield and Southampton, showing how it would work. Drawing on examples from countries including Iceland, Canada, the Netherlands and Scotland, they show that the direct participation of local people in decision-making improves not only the democratic quality of decisions, but their effectiveness. It’s a match made in heaven for the devolution revolution.

‘The briefing Democracy: the missing link in the devolution debate’ is available for download from New Economics Foundation website here.

This post was originally published on the University of Sheffield’s Crick Centre Webpage

Sarah Lyall is a researcher and policy analyst at the New Economics Foundation. She tweets @sarahglyall and @nefSocialPolicy.

The Autumn Spending Review: A Political but not an Economic Fix?

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After the Government’s spending review on 25th November, I was struck by how experienced political commentators were fumbling to get a grip on the detail of its plans and forecasts. What lies beneath the headlines and soundbytes will become clear with time, but some general contours and contradictions are already emerging from the Chancellor’s “smoke and mirrors”.

The headlines will say that George Osborne reversed controversial proposals to cut tax credits – a U-turn for which shadow Chancellor John McDonnell quickly claimed credit for the Labour Party. But, they have not been reversed for people on the new Universal Credit system – a reform critics see as a serious benefits cut in itself. Moreover, tax credits will remain frozen and diminish in value. Osborne devolved some control over elements of local government finance, but with multiple strings attached. Council tax rises are permissible, but must be ring-fenced to adult care. Business rate rises are permissible, and local authorities will retain the returns. However, additional rate levies will depend on the consent of local business elites. Councils will have the same to spend in “cash terms” in 2020 as they do now. This announcement foreshadows major public service reductions, but on a scale impossible to anticipate without knowing other volatile variables in advance. The government, and councils, are investing hope in the integration of health and adult social care as a way of delivering austerity without outright retrenchment. Yet according to Lord Porter, Chair of the Local Government Association, a new round of cuts is likely to push councils to the edge of collapse. Osborne has spoken frequently of Britain moving from high welfare-high tax to a high wage-low welfare economy, predicated on increases to the minimum wage. Yet, an hourly living wage is only a real living wage for people working enough hours in the week to surpass income poverty thresholds. It will not be a living wage for those on part-time or zero hours contracts – or those in precarious self-employment.

Whatever the merits and drawbacks of specific cuts and measures, the holy grail of Osborne’s Chancellorship is delivering a budget surplus in 2020. The Office for Budget Responsibility suggested he will be boosted by an unexpected increase in tax receipts through the middle of this parliament, a claim immediately qualified by Chairman Robert Chote. Even if he enjoys good fortune with the tax receipt numbers, Osborne faces formidable barriers. Responding to the spending review, John McDonnell was quick to remind us of the Chancellor’s poor forecasting record. In 2010, the government said it would eliminate the budget deficit by 2015. Now, we are told this will occur in 2020. With the support of the Labour Party, the media and much of the public, the last government set a welfare-spending cap. Today, we were told the cap has been breached and will not be met until 2019. Ultimately, all depends on forecasts for sustained GDP growth at rates of 2.3 or 2.4% for each of the next five years. But such a stable pattern would be exceptional. In the best-case scenario, GDP growth will fluctuate in an upward direction. In the worst-case scenario, underlying weaknesses in the economic recovery will soon trigger another recession.

In short, it is plausible that before long, the government will have to revise its forecasts again and come back for more. If a budget surplus remains the primary goal of British economic policy, further attrition of the welfare state and corrosion of the public realm is the price we will be asked to pay. Even then, the goal could be elusive.

Jonathan Davies – Director, Centre for Urban Research on Austerity

Devolution deals: three risks

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Devolution to city regions is a central pillar of the conservative government’s industrial strategy. The ‘Northern Powerhouse’ model developed in the Greater Manchester Combined Authority (GMCA) is being rolled out through ‘Devolution Deals’ and the Cities and Local Government Devolution Bill. Advocates of devolution argue that it can close regional disparities in economic output by boosting growth in city regions. It is also argued that closer proximity of devolved administrations allows policy to be tailored to local needs; that devolution contributes to increased dynamism by creating opportunities for local innovation and increases local participation and accountability. As recently summarised by the Local Government Association these are points of consensus in British policy circles.

However, the evidence of devolution as a driver of economic growth, convergence in social and regional inequalities and is pretty thin.  For example, one analysis of devolution concluded that the evidence in favour of such links is very weak and another found a moderately negative relationship. It seems that this evidence is overlooked by the general consensus in favour of devolution amongst policy makers.  In this blog, I will set out three key ‘risks’ that explain failure to deliver on the ‘economic dividend’ argued for by so many proponents of devolution.

The balance between the transfer of resource and responsibility

It is often argued that the ‘litmus test’ of devolution is the balance between the transfer of policy responsibility and resource capacity. On this test, it can be said devolution in the UK has been non-existent in recent history – the purse strings have remained under tight Whitehall control. Research on the coalition government’s devolution reforms found that the scale of devolved functions heavily outweigh the devolution of resources to carry these out effectively. In order for local units to exercise devolved responsibilities effectively, resources and resource raising powers need to be commensurate with responsibilities. The Conservative government’s devolution deals are being pursued in a context of even harsher projected public spending cuts. It is therefore difficult to avoid the cynical conclusion that devolution forms part of a broader agenda to transfer the responsibilities of managing cuts to lower government tiers, rather than a genuine attempt to construct a more decentralised political economy.

Exacerbating inequality

‘Devolution deals’ seem to involve a more fundamental shift of power away from central government than previous attempts at devolution. However, these deals are struck on a case by case basis. Some resource raising powers are on the table, but some regions receive more powers that others – leading to an asymmetric distribution of powers that could exacerbate existing inequalities. Even if these were uniformly devolved, the ability to capitalise upon these is likely to differ across city-regions.  It is also noteworthy that many of the policies that previously distributed the proceeds of the UK’s London and finance-centric economic model are being discontinued by the austerity agenda. Recent research by the Institute for Fiscal Studies makes it clear that measures such as the ‘Living Wage’, which is presented as mitigating these impacts, will do little to compensate for those at the cutting edge of these reforms. Compounded by the imbalance between the devolution of functions and resources noted above, heed should be taken of the possibility devolution to city regions serves as a model for the shrinking the welfare state.

Collaboration and co-ordination between regions and governance tiers

Devolution deals are concerned with arrangements for individual cities and city-regions. Beyond the aspiration for a larger collective contribution to national economic output, there is little focus on the relationships between regions and the impact on devolution deals upon the overall functioning of the economy. Because of this, analysts of devolution have raised the possibility that rather than leading to an “effective and coherent yet more locally autonomous system of government”, devolution policy in the UK might deliver “a disconnected set of governance fiefdoms pursuing more or less strategic ends with varying degrees of competence”.  A related likelihood is the devolution deal model will encourage competition over collaboration between city-regions. As economist James Meadway argues “by granting large cities more powers on the allocation of spending, but leaving the level of taxation, spending and borrowing under tight Treasury control, regions will be forced into competitions with each other to attract business expenditure and therefore extra tax revenues”. This could lead to a regulatory ‘race to the bottom’ that would substantially undermine the collective potential of city-regions to deliver improved economic and social outcomes.

In conclusion, a viable model for a more decentralised political economy should:

  • transfer ‘effective’ policy autonomy by providing adequate resourcing opportunities for devolved units;
  • reduce inequality within and between regions and social groups;
  • provide effective co-ordination between regions and governance tiers.

Although devolution deals are an emergent approach whose outcomes are not yet evident, the ad-hoc and case by case nature of the devolution deals, and the context of harsh public spending cuts within which they are taking place, are likely to lead to negative outcomes regarding the three areas above. It is therefore quite doubtful that devolution deals can constitute a viably generalisable model to deliver a more decentralised and effective political economy.

Adrian Bua is Research Assistant at the Centre for Urban Research on Austerity, as well as at the New Economics Foundation

After The Corbyn Surge

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The election of Jeremy Corbyn to the Labour Party leadership is a seismic event in British politics – perhaps even more so than the SNP landslide in May 2015. For the first time, a committed socialist and anti-austerity activist leads the Labour Party at Westminster.  Many commentators were busy writing his obituary long before he became leader. Yet, serious thinkers on the right aren’t fooled. They know Corbyn taps into a popular mood, the desire for authentic opposition to the Tories, and an alternative to the right wing populism of UKIP. They fear that he really could threaten the enervating austerity consensus.  Making that threat a reality is his only chance.

Corbyn faces formidable opponents in the state, business, media and the Labour machine itself.  Can he survive as leader?  Is it remotely plausible that he could become PM?  It will be extraordinarily difficult, but it is possible whatever the psephologists might say.  Politics can change. Political activists can be agents of change.  The challenge, simply, is to make the “Corbyn surge” infectious: translate his campaigning energies to the national stage and use his position as Labour Leader to win credibility for his socialist worldview. In practice, that means he must mobilise a movement capable of stopping austerity in its tracks. To win credibility, the Corbynistas must find a way of making austerity ungovernable. Accomplish that, and they might regain credibility for socialist politics and bring millions of working class people alienated by the Blairite era back into the political and electoral fold.  Since Corbyn’s astonishing victory on Saturday, there have been stirrings within the leadership of the trade union movement – even threats of “civil disobedience”.  But we heard all that in the heady days of 2011. At the height of the Arab Spring and the Occupy Wall Street movement, we saw a trade union demonstration of more than half a million people in London, and mass strikes against cuts in public sector pensions. But the unions backed down and nothing came of it. Talking a good fight against austerity isn’t remotely the same as delivering. Jeremy Corbyn’s leadership is a huge gamble and the odds are stacked against him. If the Corbyn surge does not prove to be infectious, he will quickly be toast.  But by sticking his guns he could just lead a renaissance on the left and transform British politics.

We will be discussing this and many other issues at the inaugural conference of our Centre for Urban Research on Austerity on 18th and 19th November 2015. See http://www.dmu.ac.uk/CURA2015.

Jonathan Davies

Director – Centre for Urban Research on Austerity