This week, the LSE’s Centre for Analysis of Social Exclusion released a major report examining the last Labour government’s record on Social Policy. James Kempton finds three important messages from the report: that Labour’s increased social spending worked in that it changed outcomes, Labour’s record on market-based health reforms is a mixed one, and it helped to achieve a political consensus over the need to address social inequalities, especially in children.
As the battle lines start to form for the next general election, it is inevitable that politicians and commentators will look for evidence to support their respective positions in LSE’s powerful new report on Labour’s record in power: Labour’s Social Policy Record: Policy, Spending and Outcomes 1997-2010 by the LSE Centre for Analysis of Social Exclusion.
In addressing the myth that Labour spent a lot and achieved nothing, the report allows readers to extract evidence that: “Economic and social outcomes got better and differences between social groups narrowed’. But equally it finds: “This was an expensive agenda” and “there remained a long way still to go towards a more equal society after all the spending”
Both are important (and compatible) conclusions. However, what is striking is the way the report reminds us that there is a case to be made for higher public spending. It feels a long time since anyone was brave enough to do that and in many ways this may be the report’s most important contribution to the public policy debate.
After three years of austerity and hard on the heels of last week’s Spending Review, offering a description of how Labour raised total public spending by over 60% in real terms now seems like something from a totally different political era. But as the report reminds us, Labour’s increase was not just supported by a majority of the public back in 1997, their baseline was a public spending low point in both historic and international standards. People will argue whether anything should have been done sooner to reduce spending after GDP fell so dramatically with the economic crisis, but the report is clear that up until that point spending remained by all measures at an unexceptional level.
I draw three broader messages from this research about Labour’s period in office that seem to impact on public policy today. Perhaps the most important message to draw is not that Labour’s social programme was “an expensive agenda”, but the authors’ conclusion that “spending works”. As the report clearly states, “where Labour spent money, outcomes shifted, while on areas on which no policy effort or extra money was expended outcomes remained unchanged”.
This is a reassuring message for all politicians, not least the coalition government which despite it austerity agenda of public spending restraint, is continuing to pump huge sums of cash into ‘good public spending’: the NHS and schools and the third protected budget area, International Development. Evidence on the impact of public spending may become even more important if tax rises become the only way to protect these budgets going forward.
The second powerful conclusion from the report may also help to shed light on why NHS reform has been so much more controversial within the coalition than the equally big changes in education. In looking at the legacy of public sector reform left by Labour in 2010, the report concludes, “evidence about whether Labour’s model for market reforms and strong central performance management drove up quality is currently mixed, perhaps with more positive evidence for health than education”. It is not unreasonable to suggest that this may go some way towards explaining the tremendous amount of opposition generated towards Andrew Lansley’s NHS reforms – where according to this report the policy inherited form Labour was delivering – compared to education policy where both coalition partners have got behind the need for more radical change.
Thirdly, the report looks at inequality and concludes, “one of labour’s key legacies may have been to move all parties to a position of concern with the reduction of social inequalities, particularly in childhood”. The cross party support for legislation on child poverty is a good example of what had been achieved to build a sense of political consensus. Equally notable has been the way that even in a time of austerity, the Coalition has funded the pupil premium and built on the idea that the scope of the welfare state should be expanded to encompass substantial spending on childcare and early years’ education. While this has been politically attractive as a way to support working parents, it has also been promoted as an intervention to support social mobility and equity.
LSE has produced a very interesting and useful paper on Labour’s 1997-2010. But this is but a curtain-raiser for their subsequent report timed for early 2015 which just ahead of the general election, will do a similar job in reviewing the coalition’s social policy over 2010-2014. I for one cannot wait!
Note: This article gives the views of the author, and not the position of the British Politics and Policy blog, nor of the London School of Economics. Please read our comments policy before posting.
James Kempton is Associate Director of Social Policy at CentreForum.