Public service reform is going into retreat

Thursday, July 26, 2007

Initial decisions made by Brown's government will increase the tax burden, a think tank said.

A report published by the independent think tank, Reform, has said that recent policy announcements made by the government have increased public spending but reduced their efficiency.

The report, Retreat from Reform, notes that Chancellor Alistair Darling is in favour of competitive tax rates, but with the recent announcements, it is likely that future tax rises will be unavoidable.

Government policies on the NHS, education and housing are all being changed from policies that, the report said, were starting to have real benefits.

The report said that new city academies will no longer have freedom over their curriculum; the NHS year-long review threatens efforts to involve the private sector in the service; and an increase in government maintenance grants for students contradicts the principle of tuition fees.

All these decisions, the report said, are unfairly affecting the iPod generation; adults aged between 18 and 34. All the new decisions are likely to incur tax raises and, in particular, may reverse Gordon Brown's reduction in income tax in the last Budget.

Reform's director, Andrew Haldenby said the new government, in 30 days, has undone much of the progress made in the last 10 years.

"Alastair Darling has rightly argued that tax rates should be controlled in order to protect competitiveness, but his colleagues' spending plans will inevitably mean higher taxes or service reductions. If the new government wants to improve public services and keep taxes under control, it needs more reform, not less."

Nick Bosanquet, a consultant director at Reform and professor of health policy at Imperial College London, said the outlook for sensible discussion about the Comprehensive Spending Review is bleak.

"The UK must surely face up to the reality of new constraints on public spending yet we seem to be moving into a world of illusion, in which we can have public services without any specification of how they are going to be funded," he said.

"The last few weeks have seen a massive setback of any responsible handling of public spending issues. But there is still time to have a proper assessment of the options, in which people outside Whitehall have a voice as part of the CSR."