Andrew Curry writes:
It’s hard to add to the volume of commentary that has followed Wednesday’s Comprehensive Spending Review, but there are relevant observations from some of The Futures Company’s recent research. It is somewhere between a gamble and a large-scale economic experiment, as pundits observed almost immediately, largely regressive (opens pdf), and despite the denials it will increase inequality (from the current historically high levels). If I was the government I’d be most concerned about the likely rise in unemployment, currently nudging the 2.5m mark, and with the government’s own estimates suggesting that 500,000 public sector workers could lose their jobs as a result of the public spending cuts. If the rush of private investment anticipated by some business leaders does not materialise, unemployment could quickly climb through the 3 million mark, which seems to have been the threshold of popular discontent in recent British history (if we think back to the early eighties and again to the early 90s).
Our recent wave of Feeling the Pinch research, which we blogged about earlier this week, also gives us a useful picture of public perspectives on the economy. The research was done in September, and 75% thought the economy was going ‘badly’ or ‘very badly’ – down from 85% in November last year. 39% thought they’d be worse off in 12 months time, and 10% better off – both figures almost unchanged since last year.
The groups who were more anxious about the economic prospects (“Choppy Waters” and “All hands on deck”) were similar to each other (and fairly different from the “Plain Sailing” group). They were likely to have a mortgage, or be renting; they were more likely to have dependent children; and they were likely to be working rather than retired. They are also much more likely to have been affected by debt, and have already changed their spending habits as a result of the recession. These are groups whose attitudes could change quite sharply if people they know start losing their jobs. And there are some clues here as to why the child benefits caused such a sharp public response.
The other relevant analysis was by our public sector team, which produced a short paper, “The Effectiveness Agenda” after the election on how to improve public outcomes in an environment of austerity. We believed that savings could be found in public expenditure, but not the fabled ‘efficiency savings’ which critics always talk about. Instead, there were savings to be found from ‘effectiveness’, which involves looking at the desired public outcomes in a holistic way, and probably across departments. The Total Place agenda is a good example of this at a local level. Nationally, Kenneth Clarke’s plan to reduce the number of short-term jail sentences improves social and public outcomes while reducing expenditure hugely (although cutting the budget of the National Offender Management Scheme at the same time is not particularly holistic). But such thinking needs some time for reflection – and some leadership.
There are still a few places available at our next Feeling The Pinch breakfast seminar on November 9th; if you’re interested in attending, please contact Karen Kidson. The Effectiveness Agenda paper can be downloaded as a pdf from the link below; for more on this, speak to Andrew Curry or Alex Oliver. The icons at the top of the post were designed by Gus Newsam, of the Futures Company’s design team. They are © The Futures Company, 2010.
The Futures Company Effectiveness Agenda 2010 [downloads as pdf]