Matthew's RSA blog

Savings Gateway

Maybe it was the end of a long day but I was pretty churlish about the Government’s pre Queens Speech on Radio 4 last night. In fact there is much in the announcements I like.

For example, while I understand the concerns of small businesses, the overwhelming employer view of the right to flexible working has been positive and I don’t see why this shouldn’t be the case with its extension.

I also hope consensual progress can be made on Lords reform and party funding.

But I particularly welcome the announcement on the savings gateway. This was a policy that was first advocated by the think tank IPPR when I was its Director. It is the sister policy to the Chid Trust Fund, both being aimed at tackling the growing inequality in asset ownership and the high proportion of people who have no saving at all.

By incentivising low income savers the policy encourages thrift and responsibility and so it can be seen as explicitly ‘pro-social’. When we were debating the idea several years ago some economists said it was wrong to encourage poor people to save as the ‘utility maximising’ thing for them to do was to spend all they had. But poorer people themselves tend to disagree.

Even if they only save a few pounds a month it gives people something to fall back on bad times and a nest egg for special occasions and life changes – the kind of thing many of us take for granted.

Money, money, money

Investment and the sub-prime crisis aren’t normally topics for my blog – but recently two pieces, one in the Times and the other in the FT caught my eye.

On the one hand you have the always entertaining Jonathan Guthrie in the FT. He points out that the sub prime crisis is leading to an inevitable bonanza for litigators. In the US this has already begun in earnest, and Guthrie suggests it will soon start in the UK.

As he memorably puts it ‘Rating agencies must feel as vulnerable as a nude gymnast performing squat jumps in a porcupine farm’. If the US model is anything to go by they have reason to be nervous, as pension firms sue ratings agencies for diminution of share value.

In the Times Jamie Whyte, author of Bad Thoughts: A Guide to Clear Thinking, says that the idea that, in the light of the sub-prime experience, we should regulate to protect investors from bad advice and bad investment is tantamount to arguing that because we should regulate romantic relationships to reduce the possibility of people being jilted.

For Whyte the very idea of regulation in an area of free choice is problematic; ‘Once risks are known, regulating them is worse than useless. It can only move the price of risk away from, and usually above, the market price. It encourages financiers and investors to seek profit in areas where the regulators are not imposing their burdens – namely those where the risk are poorly understood’ 

Now, Guthrie is not advocating litigation merely predicting it, and litigation is not exactly the same as regulation (although if successful litigation establishes case law it will tend to have a similar impact to liability imposed by regulation). But these articles point to two different views of the rights of the consumer or investor.

Whyte relies on the principle of caveat emptor, while Guthrie suggests that people who have taken bad advice will naturally seek redress against those who gave them the advice.

The RSA’s Tomorrow’s Investor will be exploring just this dilemma. We will expose a selected group of small and ‘indirect’ investors to a comprehensive picture of how decisions are made about ‘their’ money. We will explore how sound are these decisions and also their ethical dimension.

At the end of the forum the question is whether, when the investors have these insights, it makes them want be more active, to have better protecting or more effective intermediaries. I’ll make sure we send Jonathan and Jamie our findings.       

Global citizens

Are we, as humans, capable of coping with the complex problems created by human progress?  Population ageing and global warming are both challenges resulting from success. Globalisation too is hastened by man-made advances in technology and trade. But globalisation also brings great problems in its wake. Scanning this morning’s papers provides a fascinating insight into the dilemmas we face.

On the national finance scale Geoff Mulgan and Will Hutton’s piece in the Guardian calls for better regulation of banks to avoid further credit crunch fiascos. Individuals are just as vulnerable to the blows dealt by changes in the economic cycle, but thus far the benefits conferred to the banks have not been passed on to the individual – this is particularly important in terms of engendering public trust in national institutions. 

In the FT, David Sproul and Bill Dodwell argue that the major companies are leaving the UK because they not only face relatively high corporate taxes, but are concerned that the treasury will tax certain kinds of overseas profit as well.

Reading these in conjunction reminded me of the debate around Joseph Stiglitz’s new book Making Globalization Work, which was recently reviewed by Robert Skidelsky in the New York Review of Books. For globalisation to benefit the whole world, and for developed countries to be willing to make the adjustments necessary for global fairness, we will need to have better global regulatory organisations.

The question is –  where is the political will to make this happen? If one country were to act on its own it would inevitably lose out in the global market.

A lot of this is about complex policy issues and institutional reform at a global level. But underlying this are questions as to whether we, as citizens of this new world, are able to understand its realities and able to give our leaders the scope to show leadership. The choices we as citizens make are just as important as those of our leaders.

As David Aaronovich points out in the Times this tension is playing out in the Clinton / Obama race. Interestingly both candidates are keen to be seen as progressives on the world stage, while at the same time offering protectionist policies to their electorate.

So while the main victims of globalisation are the poorest people, mainly living in Sub-Saharan Africa, the most vociferous opponents are the formerly skilled manual workers of the developed world.

Skidelsky argues that the problem with Stiglitz’s book is that it doesn’t recognise that you need to co-opt those people in the developed world that feel they’re losing out, and show how they too can gain from globalization. Otherwise we have a globalised world governed by national imaginations.

Returning to a well worn theme the answers here must combine citizen-centric and government-centric solutions.

For example, we need new collective institutions (both in the real and virtual world) that help constitute a global civil society. Two examples of this are the fair trade movement, and, importantly, the Make Poverty History Campaign. Both are focussed in their scope but have had an impact on changing the way people think about their money and their ‘stuff’. Globalisation will only work for humans if appropriately regulated. Regulation has to happen on a global scale. But leaders will not rise to this challenge unless we as citizens are more able to think globally ourselves.

Two innovation powerhouses

Fantastic night at Lewisham College on Wednesday. The Principal, Ruth Silver (FRSA) had invited me to be the pre-dinner speaker for the College’s annual fund raising banquet. I managed just to deliver on my promise to cover the birth of human rights, brain science, and the need for a new collectivism, to tell some jokes and to land my speech back at Lewisham College all in ten minutes. The fantastic food was cooked and served by College students, for whom it was part of their course assessment.

Sitting next to Ruth – without doubt one of the UK’s great public service pioneers – it occurred to me how two of the less ‘sexy’ of the public services – social care and further education have both become power houses of innovation. In social care the driver was client and carer dissatisfaction with the services on offer which, combined with a rights based approach, led to the work of In Control and then on to the rolling out of direct payments.

Further education will be a crucial partner in the new Diplomas, which look increasingly certain to become the framework for all 14-19 education (including ‘A’ levels). I suspect colleges will find it much easier than most schools to work collaboratively with other education providers and  with employers.

FE is also at the forefront of two key Government priorities – tackling worklessness and improving skills. We are used to debates about the private sector selling its services to the public sector but in adult FE the direction is reversed. Lewisham’s team have become expert at selling to employers the business case for publicly funded and provided training to employers. As they were telling me on Wednesday their opening line to employers isn’t ‘why aren’t you training your staff’ but rather ‘would you like to improve customer satisfaction by a third?’

Social care because its services were failing, and FE because it has had to constantly renew its mission, have become sites of major innovation. Chatting this morning to Fran Sainsbury, who is heading our project on offender learning and skills, we wondered whether prisons could themselves one day been seen as testing ground for new ideas and practices.

There is lots of interesting work on education going on in our prisons and continuing into the community. Yet for various reasons little of this innovation gets noticed or debated outside the prison and probation fields.. This is something our own project will aim to change.      

What do we want for ourselves?

As I said in my ever so brief blog last Friday I was on last week's Any Questions from Kingston University. It was a good night with a conversation that was probably enhanced by none of the panellists being an official Party spokesperson.

It was a nice start to the evening to find out (of course I should have known already) that both Bonnie Greer and Lord Ramsbotham are Fellows (and I am going to try now to recruit the final panellist Tim Montgomery!)

I guess I am on the programme as much because of my past as my present role, so it is a challenge to get the right balance between my personal views and the need to protect the RSA's vital political independence.

I'm sure I'll hear soon enough if Fellows think I got it wrong. 

There were a couple of moments in the programme which connected with the work here at John Adam Street.

One was the chance for me to vent, again, my concerns about the divide between state and independent schools. As I said in the programme, I don't condemn those who provide or send their children to private schools (I wouldn't have many friends if I did). But I do worry about the most privileged pupils being educated in schools where it is hard to fail and the least privileged in schools where it is hard to succeed.

In the past I have suggested that the RSA might try to convene local discussions to explore how well-off parents might be encouraged to keep their children in the state sector. My thoughts haven't got much further but any views would be welcome.

The discussion also reminded me of the gap between what we say about the kind of society in which we want to live in and how we respond to questions about our own lives.

When I argued that the abolition of inheritance tax could not be a priority if we want a fairer society and a more productive economy, I got a good hand of applause. But when Jonathan Dimbleby then asked the audience if they thought the tax should be abolished they voted overwhelmingly in favour.

It shows how important the framing of an issue is.

If we are asked what we want for ourselves without any reference to our wider idea of a better future, and without being asked to think about the trade-offs involved in any choice, our answers will tend to be narrowly self-interested.

But when a policy is placed in a fuller context - including the wider good - we may reach different conclusions.

Which goes to underline two things:

First, that most opinion polls about policy options are a waste of time and tend by their superficial nature simply to reflect our most unthinking responses.

Second, the need to move from government-centric political discourse ("what I want the politicians to do for me") to a citizen centric approach ("what kind of future we want and what we need to do to create it").

Apologies again for the holiday blog break I will make up for it in the weeks to come.

Damon - I really enjoyed your comment. I think individual empowerment is only achieved alongside strategies of collective empowerment - including bringing alive the policy dilemmas and trade offs. Many people who think hard about public service reform have come to the conclusion that this issue of reconciling individual and collective choice and empowerment is one of the big future policy challenges.

Bob, given the importance of our competency based Opening Minds curriculum to the Willingsworth Academy and our recognition that rising expectations is a crucial aim for the new school I hope you can rest assured.

Thanks, Tony, I agree with the sentiment. Getting the practice right is the challenge.

A load of rubbish

Today's Select Committee report on local authority refuse collection took me back three decades to my first full time job as a street sweeper for the Royal Borough of Kensington and Chelsea.

Clocking-on time was 5.30 and even as a teenager with a mind on girls, punk rock and soft drugs, I couldn't help being impressed by the view from Chelsea Bridge in the early morning summer sun.

The only other people I remember seeing were Brighton-bound bikers stopping for a strong tea and cigarette at the tiny snack hut on the south side of the river.

On my first day I was allocated to Pat, a short wiry Irishman of few words. We walked down to the Kings Road, pointing down the side of a posh residential square and he gave me my broom and set me to work.

Half an hour later I was wondering what I had let myself in for; dripping in sweat, eyes and nose full of dust and with a hatred of irresponsible dog owners that was fast becoming pathological.

At this point Pat strolled up to me. Gently removing the broom from my red hands and glancing back at the couple of hundred yards I had covered, he uttered possibly the ten most influential words I've ever heard: 'Listen son,' he said, 'this is a job not a bleeding vocation.'

Two hours later we clocked off for an elevenses which ended at the conventional time despite beginning just after eight. When I asked another fellow sweeper - a drug addict who used to hide stolen car radios in his dust trolley - whether we might ever be caught out for our five hours off in every eight hour shift, he reassured me that the council inspector made it a matter of pride that the timing of the weekly round on his motor scooter never varied.

As long as I was hard at work behind John Lewis on Friday at 10.00 the rest of my time was my own. We used to give him a friendly wave as his Vespa turned the corner and we looked for somewhere to hide our trolley.

I have to admit this experience of the public sector ethos did leave a mark. But over the years my main argument for reform has not focussed on efficiency, I have instead majored on the need for 'empowering' services.

By this I mean services designed around the idea of the user as the joint producer of the intended outcome. Thus, health services are better if patients have greater choice and control, results improve when pupils and parents feel engaged with the school, the police have a chance of success if the community accepts a role in delivering the crime prevention strategy.

This idea is now very popular with pundits, politicians and progressively-minded managers. But not everyone is so convinced. For many hard pressed public employees the task is keeping the public at bay rather than inviting them to get more involved. While for critics of the state the idea of empowerment is just a cover for a continued failure of basic service delivery.

More than once I have heard members of the latter camp respond to my idealistic vision of state-citizen collaboration with the stark assertion: 'People don't want to be engaged or empowered they just want their bins emptied on time.'

Preparing for a speech the other day to Kent County Council managers I was wondering whether I would face this line at attack again. When it struck me - in my house we have a bag for recycling, a bag for the compost heap I recently established in the garden, and we try to keep the remainder down to no more than one black bin liner a week - I am a co-producer of waste services in Lambeth.

Indeed, the amount of time my family spends separating, rinsing and bagging the rubbish is probably as great as that spent on my household by the council's refuse collection service.

What was once cited as the classic example of a 'delivery' service of which the public would be mere passive recipients, wanting little more than reliability, has turned into a partnership.

Instead of council officers needing only to think about when the cart turns up and whether the collectors tidy up after themselves, they must now carefully work out how best to cajole residents to be responsible waste managers.

The thrust of today's Select Committee report was that councils are using insufficiently strong incentives to encourage residents to recycle.

Imagine how revolutionary it would be if responsibility for service outcomes in schooling, primary health care and policing were shared as equally with the public as is increasingly the case with refuse collection.

So, the next time I am waxing lyrical on the need for the empowering state and someone shouts out 'rubbish' I'll know they are agreeing with me.

All of which gives me the excuse to recall a favourite TV comedy moment, one which uses rubbish to raise the most profound of philosophical questions. For surely no amount of innovation or empowerment will match the efficiency of Trigger's broom?

As you will recall he won Southwark public employee of the year for having had the same trusty sweeper throughout his career. As he boasted to Del Boy and Rodney: 'Maintained it for 20 years. This old broom has had 17 new heads and 14 new handles in its time.'