The cost of Labour to public services

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For some years after Labour came to
power even I, as someone who feels no empathy with Labour, could
admit that there was a clear set of policies at work in public
services. Put simply it was about structural change linked to
massively greater spending (or as Labour termed it “investment”).
The reality is that in those early years there were many, even on the
right, who were prepared to give this an experimental attempt.

Of course, what Labour did was link to
that investment targets, as many in the city do. What they did not
link that investment to was any form of efficiency, so as the
spending and the staffing increased the efficiency gains were lost in
what they hoped would be a flurry of improved services.

But the results have not been good.

Education has seen increased exam
results, but as we have heard recently, even the higher education
sector believes that is more about academics fiddling the systems to
please managers than it is about brighter children. The produce state
in education has ensured that more and more children continue their
education into their early twenties but are then tied to student
loans well into their 30's. I was more than a little shocked to hear
it said last week that there will be 2,000,000 people taking their
university finals this year.

In health we have seen a lot of
building, but even more system change, as Labour has fought to find a
way to manage the producer from the centre. We now have the NHS, one
of the biggest employers in the world, controlled almost like the
former soviet state controlled Russian industries of the past.

We have recently heard that there will
be an almost three-fold increasing in health funding by the year 2012
– in comparison with 1997 and providing the economy does not
totally collapse. Whilst this is to be welcome there is no doubt
going to be much debate as to where that money has gone. It must be
the case that in this there are huge inefficiencies. I wandered a
hospital recently and could not believe the state of wards and
waiting rooms. It is clear that money has not been spent where the
patient can see it.

It did not have to be this way. I
recently sat in on a presentation from Tim O'Toole (MD of London
Underground) who is clear that the investment of the past ten years
has been about hidden infrastructure and that only in the next few
years will London Underground passengers see visible benefits for
this investment. I can understand this argument in that tracks and
signals being renewed do not automatically register as investment by
train passengers. In education and health I am not sure the
investment can be hidden and although we hear a lot about increased
patient numbers and aging populations many of our hospitals look as
old and shabby as they did in the 1960's.

But where does this go now? Is the UK
coming full circle and returning, as we did towards the end of the
last Labour Government, to a period of roaring inflation, high oil
prices and strikes? Will economic failure lead to a decline in
available resources for both schools, public transport and hospitals?
If we are, what do we, as Conservatives - pledged to support these
services - do about this?

Given that a failing economy is as much
about human sentiment towards the economic future, as it is about
real numbers, will the public buy the idea of savings through
efficiencies, rather than cuts. Is it too simplistic to suggest that
we will spend the same just differently – or will Labour try and
dress that as cuts?

The fact is in a declining economy tax
receipts will fall and the funding difference will need to be made up
if Labour is to go into the next election on the basis of its current
funding commitments. Conservatives should be looking now at how we
can maintain the priority for our election commitments, as well as
reduce the overall burden on very hard pressed tax payers. Without
looking backwards maybe now, more than ever, we need the types of
review undertaken by both Gershon and James prior to the last General
Election?