Why Public Services are Like a Fat Lady in a Corset

I think there may be a General Election coming up soon.

This has got me thinking even more than usual about political parties’ manifestos and the policies that they all feel sure will make the country a better place.

The trouble is, that all these policies are based on ideologies that do not reflect the reality of life in this country, and take no account of the long term consequences of those policies.

To be blunt, governments and political parties continually fail to grasp the basics of joined up planning for managing Society as a whole.

You’d have thought that setting a fixed five year term of office would have obviated the political need for short term policy, and facilitated longer term rational planning. But not being a politician, I suppose I’m hopelessly naïve to think this.

One thing all the major parties seem to have in common is the belief that it is necessary to make cutbacks in public spending. But none of them stand back and take a long, hard look at what would actually happen if and when these cutbacks are implemented.

Because Big Society is like a fat lady in a corset: you can try squeezing in one place, but all that will happen is that there will be a bulge in another place. The whole remains the same. In fact, squeezing too much might simply end up in asphyxiating the body you’re trying to manage.

I’m not going to make an ideological argument based on airy fairy social work concepts of social equity and fairness. I’m simply going to try and show that cutting certain services, or throwing money at the political ideology of the day, may not actually result in an overall reduction in the costs of all services in general, and can even result in greater expenditure for less social benefit.

Let’s take housing policy as an example. The Government appears to regard home ownership as an innately good and desirable thing. To this end, the current Conservative Party Manifesto says that it will extend the “right to buy” to people living in housing association homes.

Here’s another way of looking at this policy.

·       The Government gives money, either directly or via local authorities, to housing associations in order to build houses for people who do not have the income or ability to buy their own houses.

·       The Government then sells these houses at a large discount to people who are probably able to afford to buy a home of their own in any case.

·       The Government makes an immediate loss on its investment.

·       The people who buy these houses may then quite possibly decide to sell them in order to realise a considerable profit, only some of which will return to the Government in Stamp Duty.

·       The people who buy these houses then let them privately at larger rents than the housing associations were charging when they owned them.

·       Because this social housing has been sold off without the necessary investment to replace them, there is then a shortage of rented housing, which pushes up the rents of these now privately owned properties.

·       People renting these properties, whether “hard working families” on low incomes or those unable to work because of age or disability, then claim housing benefit to cover these increases.

·       The Government’s costs for housing benefit then increase.

·       So the policy costs the Government not once but twice – and it still hasn’t solved the underlying problem of the national shortage of housing which continues to drive up the value of houses and makes it even harder for “hard working people” to afford to buy in the first place.

Then there’s that policy of allowing people to withdraw and spend their pension funds.

·       The Government makes an initial killing by taxing the money that is withdrawn.

·       A significant number of those pensioners use that money to buy property in order to let it out.

·       The increased demand in property inflates house prices.

·       This makes housing even less affordable, driving demand in renting.

·       Increased demand for private rented property inflates rents.

·       This leads to an increase in people’s claims for housing benefit.

·       This costs the Government more money.

·       And let’s not forget that years in the future, those people who drew their money out of their pension funds then spent it, will be making claims on the welfare benefits system in the form of housing benefit and pension tax credit.

·       And this costs the Government even more money.

And as for that policy known, to the annoyance of the Coalition Government, as the “bedroom tax”?

·       Well, it will continue to cost housing associations money in lost revenue because people are not able to afford the higher rent.

·       They fall into arrears and the housing associations then incur further expense taking them to court to evict them.

·       Housing associations are generally funded through central or local government grants.

·       Vulnerable homeless people have to be accommodated by the local authorities.

·       These people may then end up in those privately rented houses, which had previously belonged to the housing associations until sold off, with inflated rents, and have to claim higher rates of housing benefit than they would have been claiming before the “bedroom tax” was introduced.

And one final example close to my heart – cuts in funding for mental health services:

·       Despite Coalition claims that funding to the NHS has increased, the reality is that, according to Andy McNicoll’s excellent report in Community Care on 20.03.15., there has been a cut in real terms of over 8% to funding for mental health trusts.

·       Community mental health teams have been cut by 5% despite an increase in referrals of 20%.

·       At the same time as there have been cuts to these community services, psychiatric beds have been reduced by 2,100 since 2011.

·       This is during a period of recession when one of the inevitable consequences of high unemployment and low wages was an increase in mental ill health.

·       Trusts attempted to save money by closing hospital beds, but understaffing of community services meant that people could be less efficiently managed in the community, leading to an increase in demand for the available beds, and an increase in requests for assessments under the Mental Health Act.

·       This led to an increase in the use of leave beds, beds nominally occupied by a patient who was on leave as part of discharge care planning, and by the wards being under increased pressure to discharge too early.

·       The consequence of all this was that people were more likely to relapse, and need an acute bed.

·       This inexorable pressure on beds led to increased use of beds out of trust areas, trusts frequently having to use private hospitals.

·       These beds are far more expensive than “in house” beds.

·       There are also increased costs in transporting these patients long distances, often having to use a private ambulance service, because local ambulance trusts would refuse to provide transport.

·       Holes in service provision for crisis intervention also leads to increased use of police emergency powers under Sec.136, and then associated delays in completing the Sec.136 assessment because of delays in finding a bed. This puts increased pressure on police time and resources.

·       And of course there have been huge cuts in funding for local authorities, who among other things are responsible for providing police services, so policing levels have been cut at the same time.

·       Another consequence of cuts to local authorities is that funding for services that have the effect of providing alternatives to hospital admission, such as respite care, or reducing demand on mental health services, such as support services and personal budgets for vulnerable service users, have also been cut, adding even more pressure on NHS mental health services.

As I said at the beginning, you can squeeze as much as you like in one place, it will simply increase pressure on the system in another place.

Regardless of doctrine or ideology, sometimes you have to spend money in order to save money.