Re:State’s proposals to reform the state

Posted byCambridge Town OwlPosted inUncategorized

The think tank had to rebrand after TeamNigel hijacked their name for the Brexit chief’s latest party political incarnation. To celebrate that rebrand, they have published a series of short pieces on what needs to be done. What’s new? And what have we heard before?

You can read the report here

TL/DR? The problem is The Treasury

“I have spent much of my career thinking about other nations’ economies, and many successful ones allow regional entities to choose tax regimes to suit their needs, including the United States. There, state and local city taxes, or in some cases the absence of them, are a long-standing feature, and the evidence shows that they can influence behaviour. I can’t think of a reason why we can’t do this.

Lord Jim O’Neill, former Commercial Secretary to The Treasury – Re:State (p39)

“it is time finally to admit that economic success will not be achieved while so much power is centralised in Whitehall, and not only in Whitehall but within the Treasury and the Cabinet Office. The list of both individual policy failures and systemic economic failure is now far too long.”

Paul Johnson of the Institute for Fiscal Studies – Re:State (p14)

“Aspects of the system which, just a few years ago, were deemed to be impossible to devolve are now the subject of active discussion in the policy world. Even some of the great white whales of local government policy thinking – fiscal devolution for tax-raising powers, full devolution of employment support, or direct local control of health policy – are starting to seem attainable.”

Dr Simon Kaye of Re:State (p29)

…to pick just a trio.

I also like Andy Burnham’s quintet of themes – pillars on which local government – and city-regions could be built on. He takes broad themes and applies them to Greater Manchester.

  • Housing
  • Police/Crime
  • Transport
  • Education
  • Health

With each of these he applies them to the conditions specific to his part of the country. For housing and crime, he states:

“We advocate adopting the Finnish philosophy of Housing First [the highly successful housing policies of Finland], which emphasises good, secure homes as the best public investment that can be made.”

“Ensuring people feel safe in their homes, and when they walk out of them, is a critical
enabler of personal development and wellbeing as well as wider economic growth.”

On mobility, his expansion of the Bee network (the Manchester Worker Bee reflecting the civic history) recognising the importance of an integrated public transport network – something that the late John Prescott was never able to deliver.

On education, Mayor Burnham is far more radical than any of his counterparts with the establishment of the Manchester Baccalaureate. I had a look at what the NBT proposed for the rest of England in this blogpost. I still wonder what might have been if it had been brought in when I was at secondary school!

Finally on health, the more noble challenge of designing a system that helps people out rather than looking for opportunities to trip them up and strip them of much-needed support marks an ethical and philosophical switch that is long overdue.

The institutional challenge ahead – transformation while fire-fighting

Easier said than done. Because when you are in firefighting mode, you do not have the time to think. It’s one of the reasons I found myself out of my depth nearly 20 years ago in housing policy. We were trying to deliver a transformation in the construction industry to prepare for the climate emergency while at the same time:

  • dealing with inevitable headcount cuts
  • facing an industry lobby with vastly more resources than the civil service – all too often I felt they were running rings around us (something that was later exposed in the Grenfell Inquiry – the policy area being a classic case study of regulatory capture)
  • in the time I was there, trying to figure out what the policy response should be in the face of Northern Rock’s troubles and the start of the banking crisis – and lots of recently-built houses suddenly unsellable (at a time then as now, of chronic housing problems)
The Treasury as the blocker

Senior ministers of both parties have been all too happy to blame other institutions for the woes of the UK, but very few have been willing to identify their own political class, and their own very powerful ministries as significant barriers to progress themselves.

Ultimately Whitehall is going to have to decide for how much longer it wants to micromanage local areas via The Treasury. In the grand scheme of things, the ‘capping’ of local councils is a relatively recent phenomenon. For those of you who want to know how we got to here, have a browse through this history of local government finance.

Above – the decline and fall of local democracy (Travers, Esposito) from 2003

As I mentioned in a post elsewhere, the problems of Cambridgeshire and Peterborough are a microcosm of national problems.

Cambridgeshire and Peterborough – two contrasting local economies

From my vantage-point, Cambridgeshire and Peterborough are two different economic sub-regions squished together as one for party-political reasons by George Osborne when he was Chancellor. If this wasn’t obvious in the second mayoral and county council elections in 2021, it was more than obvious three weeks ago.

Above – the Conservatives, once dominant on Cambridgeshire County Council now reduced to a rump of ten councillors – the same as TeamNigel, both of whom now face a Liberal Democrat majority whose powerbase is in the southern half of the county.

If anything, the light blue bits of the 2025 results tell its own story – much of Fenland District (75% Leave in 2016) against South Cambridgeshire District (60% Remain) and Cambridge City (74% Remain).

Much of the party-political change has been driven by the housing crisis. Just as with London and the Home Counties, Cambridge has become so unaffordable that many of the graduates working in the city have to commute in. With more liberal social values and not taking too kindly to the Conservative’s rhetoric on the EU given how scientific research is international by its nature, the electorate responded accordingly.

The policy options I believe ‘Greater Cambridge’ needs involve powers to tax those making their excessive fortunes from the local economy – in particular those that:

  • are of a speculative nature (Eg property through the changing of land development status, or in expectation of house price or rental rises)
  • are of a nature to reduce economic activities that have grown too great so as to have a detrimental impact on community stability – eg family homes bought up for Air BnB full time, through to housing designed for families bought up and converted into student flats for private colleges and language schools
  • are of a nature to help generate new revenue streams from sectors that have become so large so as to disrupt the day-to-day life of the city, and to reduce the wellbeing of existing residents (while at the same time not serving the visiting tourist well either) – such as a nighttime levy (assuming a much tougher line on Air BnB and aparthotels is brought in) on hotel rooms, through to a tourist coach ban once the light rail is in place.

This – along with other options should raise a critical mass of revenue to reduce the payouts and grants needed from central government – which can then divert funds to places that otherwise cannot generate the revenues. Such as Fenland.

Peterborough and Fenland need the sort of investment that only central government can provide for. If you want to read the impact that a really poor transport network has on the future hopes and aspirations of women in the 20th Century, have a browse through Fenwomen by Mary Chamberlain. Some of the testimony of the women of the time is utterly soul-destroying – and also damning of the politicians and politics of the area over the past 50-100 years who did not improve things for them.

The NHS and the bigger picture

This has come up repeatedly on my LinkedIn stream (which is sort of an alternative for political/policy Twitter these days!) In a nutshell, advances in fields such as neurosciences and urban design point to public policy solutions that are not even on the radar of party political circles. Every other day I seem to be learning something more about neurodiversity and my own mental ill-health. Things from years – decades ago even, and some traumatic ones at that, can now be explained due to new insights into neurodiverse functions. Rejection-Sensitive Dysphoria is one of those game-changers, whether in explaining why I didn’t go for specific job opportunities, life opportunities, or relationship opportunities. To a neuro-normal person my responses are utterly unexplainable. To someone who has or understand/empathises with RSD and its impact, the same situations make perfect sense.

As Rosie Beacon said:

“A health service designed to treat diphtheria and tuberculosis is not one designed to treat diabetes”

Rosie Beacon, Re:State (p42)

Furthermore, as Brent Toderian’s research on public transport shows, when you design cities for the automobile, it makes them worse for everyone – including the drivers.

Question: How do you deliver all of these at the same time?

I have not a clue. Furthermore, I don’t believe the current Labour Government has the courage to deliver it even if it wanted to. Not unless they make some magical change of direction, bring in some more competent senior advisers and stop being frightened of the shadow of TeamNigel and the print press pack that will never back them. (There’s a far greater danger to Labour – and also The Greens and LibDems from the alternative online media being produced by well-funded right wing operations both within the UK and abroad). The briefing paper from the New Political Communication Unit at Royal Holloway University for the Science, Technology and Innovation Select Committee breaks down the nature of some of those threats not just to the political parties, but to a functioning democracy. (See also the Turing Institute on AI and elections)

In our highly centralised state, one way to strengthen democracy is meaningful devolution from the centre. That way you don’t end up with such a high concentration of immense power and influence. The dissipation of that power in itself is a check and balance against an over-powerful executive.

Food for thought?

If you are interested in the longer term future of Cambridge, and on what happens at the local democracy meetings where decisions are made, feel free to: