Helping the Poor with Public Service Reform

Commentary, Healthcare & Welfare, Frontier Centre

A seemingly prosperous nation with a growing economy and low unemployment, Britain has for the last two decades qualified as a European success story. But hidden behind the country’s increasing wealth lie people and places all too easy to keep out of mind, as well as out of sight. To meet the challenges of hardcore poverty, the models for delivering its generous social programs need some attention.

Life on some of the worst government housing estates in Britain is unimaginably grim. A young man growing up in the Calton estate in Glasgow has more than a 60 per cent chance of getting no educational qualifications at all, the same chance of not working, and will die before he reaches 54, a life expectancy lower than in much of the developing world today. Unfortunately, his story is less isolated than we might imagine. A quarter of working-age people in the most deprived areas of Britain do not work, while across the country as a whole, around a fifth of adults are functionally illiterate, unable to find a business in a telephone directory.

To a large extent, we know why this is the case. In various areas, the current system of public services is inadequate for most, fails the poorest completely and allows or even encourages the rich to escape. These conditions persist in Britain despite guarantees of universal, free and equitable provision, and despite government spending adjusted for inflation that in the last five years increased by two thirds in education and health and rose by a third overall.

Since 2000, education spending has risen from around ₤3,500 (Canadian $7,000) to ₤5,500 ($11,000) per pupil. Yet a poorer child eligible for free school meals is still half as likely to achieve decent qualifications by the age of 16. In fact the worst primary schools, where less than half of 11-year-olds achieve expected standards in English, are exclusively located in the most deprived areas.

Britain’s National Health Service tells a similar story. Although it was created 60 years ago to offer good healthcare to the whole population, not just those who could afford to pay, and although the money has gone in – spending has risen from ₤50 billion ($100 billion) to ₤83 billion ($166 billion) since 2000 – cancers are still diagnosed at a later stage in patients living in poorer areas and intervention rates following a heart attack are still 30 per cent lower for the least well-off. It is little wonder that the gap in life expectancy between the poorest and the average has been rising rather than falling.

Worse, however, than the damaged young lives and needless deaths those numbers represent is the fact that there is very little the poorest can do to change what is effectively handed down to them from above. The richest tenth can buy private health insurance and educate their children at private schools. Many more can afford to avoid hospital waiting lists by buying individual operations privately and can purchase more expensive homes close to good state schools. But the poor cannot even hope for this luxury.

It doesn’t have to be this way. Across continental Europe, people enjoy better and more equitable services because social democratic governments have discovered that ways exist to make their ideals of universal and high quality services a reality.

In the compulsory social health insurance systems offered in Germany and Switzerland, the premiums of the poor are paid for by the government, so no one goes uninsured. Everyone, however, can determine their insurance provider. And everyone can decide which hospital to go to – whether state or private or not-for-profit – and which doctor or dentist to visit, the kind of control that the poor in Britain do not have.

But the most important thing about social health insurance systems is that they deliver better healthcare than in Britain. Four-fifths of Swiss people and three-quarters of Germans diagnosed with cancer survive at least one year and waiting lists for treatment are virtually unheard of. If Britain could achieve cancer survival rates like this, between 10,000 and 25,000 lives would be saved each year.

For the last 75 years, the Netherlands has allowed parents to determine which school their child attends, with the government paying the school directly to educate that child. Sweden has followed a similar course in recent years, with safeguards for the poor that ensure schools cannot charge any fees. The Netherlands has long had an excellent and fair education system, while the recent changes in Sweden have improved education for all. New schools have opened in the poorest as well as the richest municipalities and standards have risen in both state and independent schools, leaving no one behind.

For those people living in the worst housing estates in Britain, following the European lead by changing the way we organise and run public services will raise aspirations and improve lives. Doing so it will bring us closer to meeting our ideals of opportunity and empowerment for all, especially the poorest in society. That’s something of which any government could be proud.

Corin Taylor was formerly Economics Research Officer at the London-based think tank, Reform.