Monday 29 October 2018 8:12 am

Today’s Budget is a chance to reinvigorate domestic policy


It has been a year of momentous change for department titles.

The Department for Health has added Social Care to its name, while the Department for Communities and Local Government has recently become a Ministry of Housing, Communities and Local Government.

So far, those changes have not been accompanied by a new and much-needed domestic reform agenda.

Today, the chancellor is due to announce the “end of austerity” – and this is his moment to provide those new ideas.

Since the referendum in 2016, the government has focused on negotiating a good Brexit deal and has lost sight of issues closer to home.

From schools to the NHS, public service reform has stalled – and as a result, issues such as poor social mobility, our ageing population, and low productivity remain unaddressed and unresolved.

If this Budget is really about ending austerity, it provides the government with the perfect opportunity to get back to domestic policy, reform public services, and find some answers to these burning issues.

Let’s start with health. The government has already announced £20bn of extra money for the NHS. Before the end of the year, it will announce options to increase funding for social care, including a compulsory insurance plan – which we at Reform think tank have advocated.

But without ideas to create a joined-up NHS, these cash injections may not bring about the anticipated improvements.

Plans to integrate health and social care through the 44 Sustainable Transformation Plans, set up in 2016 to join up local care services, have not come to fruition. To date, only 14 have now become integrated care systems.

There is mounting evidence that cuts to social care have had severe effects on the NHS, and A&E departments in particular. Last October alone saw more than 60,000 hospital beds taken up by patients due to lack of social care provision.

What is important is that the solution to social care provision reflects the changing needs of our population, and leads to a more sustainable, integrated system.

If that’s a policy aimed at the oldest in society, we also need to look at the youngest, and improve childcare provision – for the sake of both social mobility and productivity.

This can help parents (particular mothers) get back into work and invested in the economy, and most importantly ensures that children have the best possible start in life.

A Treasury report published in March this year found that the 2017 reforms created to do exactly this were “underperforming”. Poor design and implementation mean that the money spent is not getting through.

For example, currently subsidies are reimbursed to parents after they’ve used the service – meaning that parents bear the burden of upfront costs, while service providers may not receive enough cash to stay open.

The UK is one of the most expensive countries in the world for childcare – in England, costs for couples are on average 40 per cent of a household’s combined income.

Better policy design for childcare would encourage more parents to re-enter the workforce, and ease low-income families’ reliance on child benefits. Both of these would also help improve the UK’s flagging productivity.

And since we’re talking about the productivity crisis, Brexit deal or no deal, without fundamental reform we can expect it to continue.

A big push towards devolution could ensure that public services receiving more cash spend it efficiently. Research from Reform has consistently shown that such a policy could achieve better value for money than the current system, as local governments would be able to more efficiently commission services tailored to the needs of the local population.

The timing of this is perfect: leaving the EU is an opportunity to reform power structures and place more control in the hands of local government

Manchester mayor Andy Burnham and many other city leaders have argued that a more radical devolution package from Westminster is critical to ensuring healthy regional and local economies after Brexit.

Establishing globally competitive specialisms, such as chemical manufacturing in Leeds and advanced engineering in Sheffield, can boost both regional and national economic growth, as well as taking some of the housing pressure off London.

Public services provide the bedrock to a healthy economy and society. With the end of the Brexit negotiations in sight and a Spending Review due next year, this Budget could not be a better moment for the government to reinvigorate its domestic agenda.

The “end of austerity” must bring the focus back to reforming public services, and start to solve some of society’s biggest challenges.