The New Serfdom

by Angela Eagle

  The incoming coalition government, however, decided to abolish RDAs to save money, preferring to dismantle regional structures and begin from scratch at the even more geographically fragmented and confusing sub-regional level. This terrible decision set back the chance of any economic rebalancing for many years. It caused planning blight and a sudden standstill in those regeneration projects which were far advanced in the planning stage. By the time they were abolished, the RDAs had made strategic decisions on the spending of £17 billion over their twelve-year lifetime and still had projects worth £1.86 billion in hand.64 They owned £512 million of key strategic development sites and property blighted by the sudden uncertainty. Perhaps it gradually dawned on the new government that they had destroyed perfectly viable and useful mechanisms for assisting with regional economic initiatives, meaning that it was nearly impossible for them even to evaluate the bids for their hugely diminished regional funds, let alone distribute the money effectively. It is hard to believe that the Conservatives’ inherent belief in the efficacy of the ‘free market’ did not have a bearing on the decision to abolish the RDAs. What is more surprising, though, is that the Liberal Democrats, who are supposed to believe in devolution, went along with it so readily. Certainly, it was the more free-market-orientated, ‘orange book’ Liberal Democrats who found themselves in the more powerful economics portfolios making these decisions but that does not excuse their complicity in the setback to genuine political and economic devolution that abolition of the RDAs represented.

  In the end, however, the RDA initiative was simply not radical enough to accomplish the geographical rebalancing of economic activity which was a part of the last Labour government’s aim. Nor was it radical enough to be an effective counterpoint to the increasing economic pull of London and the south-east, which will continue to get even more out of kilter in the absence of a commitment to meaningful devolution and an inclusive growth strategy. There were other regeneration initiatives both for the coalfield communities and some major UK cities which were very successful in transforming economic opportunity, but this progress could not be sustained when the coalition government drastically cut the funding available for economic regeneration in their ludicrously named ‘Emergency Budget’ in 2010. The prospects for effective regional economic development went rapidly backwards as a result.

  The ad hoc patchwork quilt of thirty-eight Local Enterprise Partnerships (LEPs) which operate at a sub-regional level has proved a feeble replacement for the lost RDAs. And the government’s devolution deals are very minor too, offering tiny amounts of funding as an incentive to adopt a combined authority mayoral model. For example, the government boasts about devolving £900 million down to the combined Merseyside Authority over the next thirty years. But, according to the 2017 budgets of the five local authorities, the government have taken £859 million from them in cuts in the past seven years. By the end of the 2017/18 financial year, more than £900 million will have been lost.65 Without a more robust and independent devolved structure, there will not be a strong enough local framework to build success upon.

  FAILING TO USE THE POWER OF PUBLIC PROCUREMENT

  Few government budgets which are available to assist in boosting the ‘demand side’ of the economy can match the potential of that for public procurement. ONS figures show that currently the UK’s public procurement budget stands at £268 billion a year, which is one third of all public expenditure. As democratic socialists, we should remember that this level would be reduced by an incoming Labour government. Labour would cut the levels of outsourcing of public services by returning to direct provision in key areas, because it is more efficient and democratically accountable. This is especially obvious in the aftermath of the collapse into liquidation of outsourcing giant Carillion. However, it remains the case that even a reduced procurement budget offers great opportunities for leveraging more social value, and it therefore must form a key part of any integrated industrial strategy. The era of austerity and cuts to public expenditure has tended to entrench public procurement professionals ever more deeply into the use of low price as the dominant criteria by which to judge those bidding for contracts. As anyone who has worked in public services will tell you, the cost savings are more often than not achieved at the expense of the terms and conditions of employment for the staff currently providing the service. It is not unusual to find public service workers who have been ‘TUPEd’ over from one employer to another multiple times while doing the same job in the same workplace.

  Much anger is expressed when public procurement is seen to benefit non-UK companies, as this is regarded as a lost opportunity to gain added benefits from a specific amount of public expenditure. Likewise, the frequent use of labour from outside the area on development projects in places of high unemployment is rightly regarded as another missed opportunity. The general response to this criticism by government procurement officers has been to hide behind EU procurement rules, which mandate full transparency and non-discrimination between EU providers as part of the requirements of the single market. After eight years as a minister, however, Angela believes that the real reason is that procurement officers tend to be risk averse and conservative in the way in which they run contracting processes. They simply do not want to mess up so badly that they cause their Permanent Secretary to have to appear before the Public Accounts Committee after a procurement disaster. This might be career-ending for them, so most of them do not really seek out innovation or creativity since they are not rewarded for doing so. When Angela was Exchequer Secretary to the Treasury, she found herself responsible for the Office of Government Commerce (OGC; now merged into the efficiency and reform group and situated in the Cabinet Office). The OGC was a novel cross-government agency which sought to improve value for money in public procurement and improve the standard of contracts by having the power to approve or stop the largest procurements from proceeding. It monitored their progress and mandated the adoption of new and best practice. Angela was astonished at the unco-ordinated procurement processes she discovered operating both within and across government departments. It was clear that the largest private contractors, such as those providing computer services, had a far more up-to-date picture of the contracts they ran and were bidding for than the departments wishing to contract. Ministerial responsibility was ad hoc and unco-ordinated too. It took her months even to establish which government ministers were formally responsible for procurement in each department and even longer to organise a cross-departmental meeting to attempt some co-ordination with them. In such circumstances, pursuing a cross-government strategy was nigh-on impossible. The departmental silos were just too entrenched. The OGC was able to change that and put in place a capacity to monitor and improve practice, which was responsible for driving much-needed improvements and savings. Angela was also able to change the procurement guidelines to emphasise that social requirements – such as insisting on local labour – were not illegal under EU rules, thereby challenging procurement professionals to achieve better value for money from their contract deals.

  The big general unions – Unite and the GMB – both point out the potential for supporting UK manufacturing and furthering other social and environmental policy aims by innovative use of the UK’s massive public procurement budget.66 Public-sector union Unison notes the potential to use changes to the EU procurement regulations that make it easier for those inviting bids for public contracts to take into account social and environmental aspects in choosing the winning contractors. In theory, this allows for the possibility of requiring ‘fair trade’ standards of potential contractors, specifying certain levels of local labour be employed, paying the living wage, specifying labour standards and diversity and equality expectations, and requiring skills training and apprenticeships be offered as a legitimate part of the tendering process. While an explicit policy of buying British may not be allowed under EU law (because the tendering documents have to be non-discriminatory), the explicit expansion of allowable social c
riteria certainly makes it easier to justify such decisions when they are made. In fact, the adoption of such added-value criteria should be encouraged and incentivised as part of best practice for procurement professionals.

  There have been positive changes to EU procurement rules which were agreed in a new directive in 2014. The modest Public Services (Social Value) Act 2012 has also made it more explicit that social criteria can form part of the decision-making processes for procurement. These welcome changes are in the process of being transcribed fully into UK law, something which may be completed in time for the UK to leave the European Union. However, much as Tory Eurosceptics like to claim that ‘taking back control’ will allow the UK to set its own procurement rules, the reality is that even the WTO has its General Procurement Agreement, which applies to government contracts for certain goods and services. Any future trade negotiations are likely to wish to replicate the rules that the EU has just adopted in its 2014 directive and so the scope for going further than the explicit mention of social and environmental criteria is probably limited. This still leaves substantial scope for achieving extra social and environmental aims as well as value for money, but this will not be achieved without an explicit effort to train those responsible for running public procurement exercises about how they can legitimately seek better value for money – by pursuing local labour requirements or the payment of the living wage or equality and diversity issues – as a part of their procurement exercise.

  SUPPLY SIDE WEAKNESSES: INADEQUATE SKILLS TRAINING, EDUCATION AND APPRENTICESHIPS

  It is clear that the decision of post-Thatcher governments in the UK to leave our adult skills system to the market has been a terrible failure. This hands-off approach has meant that the infrastructure needed for the strategic co-ordination of a successful approach to adult skills training between government, employers and employees has atrophied. The result has been inadequate skills training, no focus on the geographical areas where economic development is most needed or the industrial sectors where it is most required. Nor has there been any sight of a strategy to help those low-skilled workers who need the most support to improve their job prospects by up-skilling or re-skilling. There are no strong or established levers available to ensure that women have a chance to escape the low-skilled employment sectors, where the jobs they currently work in tend to be clustered. Only very recently has there been any attempt at forward planning by government to provide the skills necessary for the workforce of the future to thrive in the context of the Fourth Industrial Revolution.

  Over the years, a great deal of money has been thrown at the supply side on the assumption that the market would miraculously provide the workforce skills that employers needed. It has not, and this lack of workforce skills planning has resulted in suboptimal outcomes for individuals, for employers and for our country. No institutions or sectoral strategies that have a long-term, planned focus on the future have been built. Instead, the assumption has been that employers will simply cause the supply to appear in response to their demands. There has not, however, been a strong employer voice co-ordinating demand beyond a general dissatisfaction with skill standards often accompanied by a search to fill the gap by importing skilled workers from abroad. Meanwhile, training providers have tended to chase centrally set funding allocations and provide easier-to-deliver, lower-level and less economically useful qualifications. Over half the qualifications taken by adults are below NVQ Level 2, which offer poor prospects for individual advancement or promotion but easier pickings for private training providers.

  In their 2017 report, the IPPR set out this mismatch and waste of resources in stark terms.67 They reveal that employer investment in vocational training in the UK is half the EU average and it fell by 13.6 per cent per employee between 2007 and 2017. At the same time, the UK has the highest levels of over-qualification in the EU. This means that the workforce skills that do exist are not being effectively utilised by employers either. Lack of planning has therefore delivered low skills at one end of the spectrum and unutilised skills at the other. A double mismatch of wasted opportunities.

  As we enter a period of profound and rapid change in our economy, it is crucial that these weaknesses are not left unaddressed. And it is crucial that the government delivers genuine strategic change.

  The introduction of an apprenticeship levy in 2017 should have been a cause for celebration, since it put the standards required to award the qualification on a statutory basis, thereby establishing a definitive quality standard across the country. This came on top of a drive to create 3 million apprenticeship starts by 2020, which was initiated by the coalition government. However, in the first quarter of the operation of the new levy, May–July 2017, apprenticeship starts plummeted by nearly 60 per cent. In the second quarter they fell again by nearly 30 per cent. Some of the decline is being caused by the sheer inability of the government to administer the new scheme in a timely fashion. But more is likely to be a reflection of the low standard of some of the ‘training’ which was badged as ‘apprenticeships’ prior to the new quality requirements coming into effect. Many employers are complaining that the levy is simply another tax on business which they feel they are not benefiting from.

  The way the government has awarded contracts for delivering training is causing great concern. They have omitted to award contracts to ten tried-and-tested further education colleges, yet some new and untested private providers have been successful in receiving them. This threatens to cause huge disruption among the suppliers for no apparent reason. It is abundantly clear that we are far from creating a coherent, effective and stable structure to deliver vocational education and apprenticeship training in the UK. The steep cuts in funding across the further education sector have further undermined confidence in the government’s commitment to deliver such a structure.

  No industrial strategy can be taken seriously until these major weaknesses are addressed in a systematic and long-term way which will stand the test of time. Currently, there is no sign that this is about to happen.

  CHAPTER NINETEEN

  ENLIGHTENMENT 2.0

  COMPLETING THE ENLIGHTENMENT

  Democratic socialism would have been unable to develop without the tidal wave of ideas that swept across Europe in the seventeenth and eighteenth centuries and which became known as the Enlightenment. The celebration of ‘reason’ and the view that all people were created equal is the modern foundation of all the concepts of universal human rights, liberty and egalitarianism that have flourished and defined both our philosophy and our politics ever since. It is in the Enlightenment that we find respect for facts and the search for truth – something we all assumed would continue to be an essential part of public discourse until very recently. This European ‘Age of Reason’ rejected rigid, pre-ordained hierarchies controlled by unquestioned authorities like the monolithic church and absolutist monarchs claiming the divine right to rule. Instead, people came to believe that reason and scientific enquiry would make it possible for humanity to drastically improve its own condition. The flowering of intellectual ideas that followed created a new world view, which in turn nurtured the flourishing of new theories in philosophy, ethics, science and religion.

  New political theories suggesting the basis upon which people were to be governed in the future, building on Rousseau’s ‘social contract’ ideas, were developing fast. In the UK, Hobbes, Hume and Locke in their different ways sought to justify the role, the extent and the legitimacy of the state. They sought to assert the balance that there should be between the state and the individual now that God and the king had been demoted. It was recognised that the pursuit of knowledge, freedom and happiness was a legitimate human endeavour for everyone to pursue. Previously suppressed democratic ideas flourished in this ferment and their strength grew. The Enlightenment era turned from criticising the absolutist and aristocratic status quo to demanding its reform and then on to legitimising the huge revolutionary upheavals in America and France that began t
o define the modern era. Some, like British Whig politician Edmund Burke, felt it had all gone too far.68 Others, like Thomas Paine69 and Mary Wollstonecraft, wanted reform to go further and argued that the inalienable rights of all human beings should be better represented in the political arrangements for governing them. A battle then raged to legitimise new, more democratic forms of political organisation and assembly to provide the underpinnings for this new, more egalitarian world. It was at this time that the contours of the world in which we now live first became visible.

  Mary Wollstonecraft, regarded by many as the first British feminist, was an enthusiastic supporter of the Enlightenment and the egalitarian ideals that accompanied it. She was a remarkable, pioneering woman – well ahead of her time. Self-made, she blazed a trail for women everywhere by managing to make an independent living as a writer and educator, becoming, as she put it, part of a ‘new genus’. Responding to Burke’s coruscating criticism of the situation in France, Wollstonecraft argued, in A Vindication of the Rights of Men, in defence of the French Revolution. She wanted parliamentary reform as well as new civil and religious freedoms for all – by which, to the astonishment and disgust of many, she meant women as well as men. As a vocal supporter of the French Revolution, she was enraged when Talleyrand made it clear to the French National Assembly that the revolutionary concepts of liberté, égalité, and fraternité did not apply to women. Women should only have a domestic education and not be afforded access to any real opportunities in his view. This monstrous exclusion of half of the world’s population from what were meant to be ‘universal’ values provoked the publication of Wollstonecraft’s best-known work in 1792 – A Vindication of the Rights of Women – in which she argued that women should have access to the same education as men because they too were entitled to enjoy the full benefits of reason and the self-fulfilment it brought. She argued for the emancipation and participation of women in civil and political life on equal terms. This simple argument asserting the equality of women with men so outraged Whig politician Horace Walpole (son of Prime Minister Sir Robert Walpole) that in what might be called the second blast against the monstrous regiment of women, he referred to her as ‘a hyena in petticoats’. Responding to the predictable outrage her simple call for equality had provoked, Wollstonecraft said: ‘I do not wish women to have power over men but over themselves.’