ales should follow the lead of Transport for London and produce its own equivalent of the Oyster card, allowing people greater flexibility in the use of buses and trains. This idea, which would involve the injection of greater private finance into Welsh public transport, is put forward by the economist Will Hutton in a new IWA publication launched today Unpacking the Progressive Consensus.
The aim of a ‘progressive consensus’ which rejects the use of private finance in funding public services, was claimed by the First Minister Rhodri Morgan and the Deputy First Minister Ieuan Wyn Jones in their ‘One Wales’ coalition agreement in July 2007.
However, Will Hutton, chief executive of the Work Foundation, argues that it takes a too restrictive view of the potential for private finance to improve public services. “Why shouldn’t a Transport for Wales produce its own equivalent of the Oyster card?”
“Why shouldn’t a Transport for Wales collect the fares and, like Transport for London, have borrowing capacity against that publicly owned, but independently gathered, revenue base? We would have a non-state institution that would drive a coach and horses through Rhodri Morgan’s progressive consensus. However, within ten years we would have a much more interesting transport infrastructure in Wales, than if we had continued with the current policies.”
In fact, the Assembly Government has already taken a step towards an Oyster-style solution with the development of the Smartcard. This is intended to replace all concessionary travel passes. It contains a small electronic chip which will be used to check concessionary entitlement. Of course, this is a long way from the London Oyster card which is available to all. Although it was perhaps revealing that in response to the Oyster card suggestion, an Assembly Government spokesperson said:
“We are rolling out our Smartcard scheme across Wales and are actively looking at ways in which this can be developed further. The technology exists for this to be turned into a version of the Oyster card if we want to go down that route in due course.”
Hutton argues that spending on health and education will inevitably grow beyond their present 8.5 and 6.5 per cent of GPD over the next 20 years. ”The only question is, is it going to be purely tax financed or co-financed through some form of private payments? And if you believe, with most economists, that there is a cap of around 40 per cent of GDP on taxation, then we have to start thinking of private co-financing of health and education.
“In turn this means that Wales will have no alternative but to start a debate on the Private Finance Initiative. To think otherwise will be to behave like King Canute in face of the rising tide.”
Will Hutton argues that the ‘progressive consensus’ advocated by the Assembly Government is mistaken in giving primacy to civil society institutions over the needs of the individual. He says it should be arguing for a public service model in which hospitals engage first with individual citizens as patients, and education colleges with individual citizens as students. Instead the government is guided more by the collective voice of civil society institutions than individual choice. This, he argues is leading the government in the wrong direction.
The philosophy underlying the ‘progressive consensus’ has been articulated by Mark Drakeford, Rhodri Morgan’s Cabinet health and social policy adviser. In an article in the Winter 2006-07 edition of the IWA’s journal Agenda, reprinted as an Appendix to this publication, he described six principles which embraced an idea of ‘progressive universalism’. These, he said, underpinned the Assembly Government’s approach to policy:
1. Government is the best vehicle for achieving social improvement.
2. Universal rather than means tested services.
3. Co-operation is better than competition in the design, delivery and improvement of public services.
4. Policy should be guided more by the collective voice of civil society institutions than individual choice.
5. Delivery and receipt of public services should be regarded as a collaborative rather than quasi-commercial transaction.
6. Equality of outcome rather than equality of opportunity in public service provision.
Each of these principles can be contested in terms of the effectiveness and efficiency of their application. Nevertheless, they seem likely to be reinforced rather than weakened by the third-term One Wales government. Indeed, First Minister Rhodri Morgan re-iterated the philosophy in a wide-ranging address on his Government’s approach to universal entitlement in a speech to a Welfare Reform conference in Cardiff in April 2008:
“Amongst some of the weaker-minded members of the commentariat we are sometimes accused of government-by-gimmick or even of give-away-government. The real give away is in the attack itself. It gives away the failure to recognise that the clearest linking purpose between a wide range of our most imaginative policies – free prescriptions, free breakfasts in primary schools, reduced bus travel for 16 – 18 year olds to name just three – is the way in which they all contribute directly to making work pay. As many in this audience will know, one of the major stumbling blocks for anyone who has had to settle for a life on welfare benefits is the anxiety that, on taking up work, new expenses will erode the differential between what can be earned in employment and what can be obtained through the social security system.”
The IWA’s Unpacking the Progressive Consensus explores what the Assembly Government’s ‘progressive consensus’ means in terms of the philosophy it represents and its impact on key policy areas such as the economy, health, housing, education, social justice, the environment, and culture. A joint publication with the Wales Governance Centre at Cardiff University it has four contributors:
• A columnist with the Financial Times, John Kay’s interests focus on the relationships between economics and business. His work spans universities, think tanks, business schools, company directorships, consultancies and investment companies. His The Truth About Markets was published in 2003.
• Peter Stead taught history at Swansea University for many years. A Fulbright scholar, he was Labour candidate for Barry in 1979. He has written critical studies of Denis Potter and Richard Burton and has jointly edited four volumes of essays on aspects of popular culture in Wales.
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