Cameron praises social enterprise saved by Future Jobs Fund

I've been watching the documentary about the "People's Supermarket", a co-operative supermarket in north London which is owned by its members, all of whom pay a fee to join and agree to work in the shop with the aim of creating "a sustainable food cooperative that responds to the needs of the local community and provides healthy, local food at reasonable prices".

On 15th February, David Cameron went to visit it, hoping to associate this social enterprise with his plans for the "Big Society".

One thing which the documentary mentioned was that while the supermarket was trying to establish itself in the first few months, it was able to employ some young trainees through a government scheme. Without these trainees working alongside the members, the supermarket would have collapsed and gone out of business.

David Cameron and his allies often claim that the aim of the "Big Society" is to replace the "Big State". They argue that because government has got so big, it crowds out these kind of initiatives and prevents people from getting on and being self-sufficient.

But as the People's Supermarket experience shows, reality is somewhat different. Far from being crowded out, this social enterprise was able to get help from the government when it needed it. It was able to hire trainees on short term contracts with the government paying their wages, in order to get time to establish itself and get more members involved, while also giving young unemployed people a chance of a job.

The name of the "government trainee scheme" which supported the People's Supermarket was the Future Jobs Fund. The Future Jobs Fund, of course, was one of the first programmes which David Cameron's government cut.

The People's Supermarket avoided being a victim of Cameron's cuts by no more than a few months. Rather than turning up for photo opportunities and claiming that this is an example of his Big Society, he should learn the lessons and bring back the Future Jobs Fund.

How to stop David Cameron's Corporate Welfare plans

David Cameron has announced that the latest version of the Big Society is that just about all public services will be opened up to be run by the private sector. He says that these "are more significant aspects of our Big Society agenda than the work we're doing to boost social action".

The Big Society started off with the idea that people would run services for themselves, but it became clear that this wasn't going to work, so Big Society 2.0 was that it was all about promoting charities. Then it became clear that many of these "Big Society" charities were being wiped out by the cuts, and anyway, they were very ungratefully complaining about the government.

So having given up on the people and the voluntary sector, the Big Society is now all about getting the private sector to run services. Unlike the users of public services or the voluntary sector, the private companies can be relied upon not to complain about the government, and will be suitably grateful for large sums of government money coming their way.

There are any number of reasons why this is a bad idea, but I just wanted to focus on a very revealing quote by the architect of this Corporate Welfare programme, who is reported as claiming that "responsibility for fixing the deficit can be transferred from the central state to the customer by transferring responsibility for the cost of services via a market to purchasers of public services."

Get that? If you use public services, the responsibility for fixing our budget deficit now falls on you, not the government.

I firmly believe that this is an even less popular idea than the original Big Society one, and one which more people should know about. It also highlights a key feature of the Corporate Welfare programme, which is that it is bound to lead to service users and taxpayers getting ripped off.

I've run some consultation meetings over the last few weeks about the government's NHS reforms. Out of all the different proposals, the two which worried people most of all were firstly that services which people rely on might be got rid of as a result of the changes (for example local hospitals closing), and secondly, that these private providers will run rings round the doctors who are commissioning services and exploit loopholes in contracts to increase charges for services which are currently free, or demand more money to keep a service going. This is, after all, the business model for the many of the American companies which will be bidding to win healthcare contracts (along with denying sick people the chance to claim on their health insurance to pay for their medical care).

The government proposals which protect users of public services and taxpayers if a service gets taken over by the private sector and closed down or loopholes get exploited can be summarised as:

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Crucially, we don't have to wait until the next election in order to stop and reverse some of the most malign aspects of these plans. The Tory Corporate Welfare plans will attract all sorts of people looking to make money from government contracts. Some will have a genuine belief that they can run a service at a higher quality and lower cost, while others will believe that they can make money by cutting costs, and deliver the bare minimum required of them (as with cleaning in hospitals or safety on the railways).

What Labour should do is announce that they are very concerned about the lack of protection for service users and taxpayers, and announce that a future Labour government would put in place legislation which allows every corporate welfare contract to be reviewed. In cases where it is clear that the taxpayer is being ripped off or service users are getting a worse deal, the contracts will be declared null and void, and the contractor will be liable to fines equal to a proportion of the profits they made from the contract. (The mechanism could be something like 5% of service users have to request that the contract be reviewed, in which case the service is reviewed by a citizen's jury).

The advantage of this is that the threat of it will be enough to protect people from the worst of the corporate welfare parasites. Companies won't bid to take on contracts and provide the bare minimum, or exploit loopholes to charge patients for services if they know that there is a risk that they could end up losing the contract and getting fined if the Tories lose the next election.

This would highlight the way that the Tories are putting the producer interest of a small number of private companies ahead of the needs of taxpayers and service users, whether in the NHS or now across almost every single other public service. Those who are confident that they can provide better services have nothing to fear, while those that want to get rich on government handouts should look elsewhere.

Attack the Tories, get voting reform

Some thoughts on the voting reform referendum.

The No campaign’s claim about the £250 million cost might not be accurate, but is a pretty effective campaigning message. I really don’t understand the Yes campaigners crowing about how it is a ‘gaffe’ or sign of how the No campaign is in trouble. It’s going to be mentioned in every single article on the subject in right wing newspapers from now til polling day.

The reason that the cost is a more effective message than those coming from the Yes campaign about “make your MP work harder” is that it recognises that most of the people who will be voting in the referendum won’t think that voting reform is a big priority. For what it’s worth, I think the claim that AV will make MPs work harder is just as inaccurate as the claim about cost[1].

It’s relatively easy to predict turnout levels in the referendum. It will be around 50% in Scotland, 40% in the northern cities, Wales and the Home Counties and other places with local council elections, and about 10% or less in London and other places where there aren’t any other elections. Most people filling in the ballot paper won’t have gone specifically to vote on the issue, but to vote to choose their MSP, AM or local councillor, and then will fill in Yes or No in the referendum as an after thought.

What both campaigns need to focus on is thinking about how to appeal more effectively to these crucial swing voters. Compared to the UK population as a whole, the people that will decide the referendum will tend to be older than the national average, more likely to live in a town in northern England or Scotland, less interested in the details of different voting systems, and more likely to support Labour or other left of centre parties. The Yes campaign needs to win amongst groups such as Labour-voting pensioners in Glasgow or Manchester.

The good news for the Yes campaign is that Matthew Elliott of the Taxpayer’s Alliance and his Tory chums are not exactly people who are well placed to appeal to the majority of these undecided voters. But the Yes campaign risks losing their advantage by sticking to a not very compelling general anti-politician message and paying too much attention to people who have already made up their minds with detailed arguments about technicalities. Worse still and actively counter-productive are smug articles like this one from Andrew Rawnsley which classily calls low income voters “the Thicko Vote”.

The absolutely crucial task for the Yes campaign is to make sure that every single one of the people who goes to vote for centre left parties and against the Tory government in the local elections gets the message that the way to protest against this government is to vote Yes in the referendum. This message might annoy a few committed Liberal Democrats, but the Yes campaign has already got their votes anyway. What it needs a clear and simple message about how voting reform will damage the government, and it needs to make sure that majority of anti-Tory voters have heard this message by the time they go to vote. What it doesn’t need is wealthy journalist “supporters” insulting undecided voters.

[1] What AV will do is incentivise parties to target supporters of other parties who always vote to get second preferences, rather than focusing on ensuring that all of their own supporters turn out to vote.

Welfare reform: harder than it looks

The FT has a good run down of today's welfare reform changes. Key points:

1. Spending on benefits will increase by £2.6 billion, which will give more money to 2.7 million people.

2. Incentives to work for the average claimant will decrease, particularly for people working more than 30 hours a week; receiving tax credits; and not claiming housing benefit or council tax relief.

3. The government still has no idea how the new Universal Credit will interact with childcare costs or council tax benefit. In particular, their plans for council tax benefit will make the benefits system more complicated, as every local council will be able to set its own different criteria for eligibility.

4. Some people will be hit really hard - 100,000 will lose more than £75 per week, and 1.7 million will receive less money. That's on top of the cuts to housing benefit, unemployment benefits and disability benefits which were previously announced.

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It is revealing that after all these years of studying the system, Iain Duncan Smith and chums' landmark welfare reforms have managed the feat of increasing spending on benefits, increasing marginal tax rates for the average worker, making some parts of the benefits system more complicated and taking more money away from thousands of low paid workers and disabled people.

Participatory budgeting and the fear of crime

I pass this email from a friend on without further comment:

"Last year, my charity was involved in a project with the local council and police around participatory budgeting. The Home Office allocated funding to spend on projects to tackle crime, on the condition that the decisions about how to spend the money were made by local people.

The council, police and voluntary sector worked together to engage residents, despite a very tight timeschedule for engaging people and getting them to decide how to spend the money. One thing which was interesting from this work was that, given the choice, people chose to prioritise help for homeowners to prevent burglary, more activities for young people, more bikes for the police, and outreach work with street drinkers as their top priorities for cutting rather than CCTV or other anti-crime initiatives.

We've just had the latest results from the Residents' Survey since this work was done. The percentage of people who thought that crime was one of the top three problems in the area fell from 29% to 20%, the percentage of people who felt that levels of crime was the reason why their area was not a nice place to live fell from 63% to 39%, the percentage of people who felt safe in their local area in the evening and at night increased from 54% to 71%, and the percentage of people who felt safe in the borough at night increased from 46% to 62%.

Clearly, this can't all be put down to the participatory budgeting work. But these results are encouraging, particularly as in other areas levels of dissastisfaction increased, so that it can't just be put down to generally increasing satisfaction. You might expect that the government would be keen to develop the learning from this and the other pilot areas where this work took place, given their rhetoric about putting people in charge and devolving power to neighbourhoods.

But if you thought that the government would want to support this work, then you would be wrong. One of the first things which they did last summer was to cancel this programme, cut the budget, stop work to share learning from the pilots, and redeploy the civil servants who had been managing the project to work instead on developing policies for the Big Society.

Just think, if they had been prepared to build on what the previous government had done in terms of giving power to people, then by now they might have developed a really effective approach which local areas could use to help reduce the fear of crime. But because they pretended that they were doing something entirely new, scrapped existing projects and started from scratch, they've achieved nothing and created a national joke."

Government plans “Community Right to Privatise”

The government’s Localism Bill includes a new policy called “Community Right to Challenge”.

Under this proposal, charities, parish councils and local authority workers will get the power to submit an Expression of Interest to run services which are currently delivered by local councils. The idea is that this will allow people who have good ideas about how to run services better or at a lower cost to be able to do so.

Now you might think that, as the stated aim of this policy is to increase the number of services run by voluntary and community groups, that the way it would work is that the council would either accept the expression of interest, in which case they transfer the service to the relevant charity or co-operative, or they would reject it.

Here’s what is actually planned:

“If an Expression of Interest is accepted, the relevant authority must carry out a procurement exercise relating to the provision of that service. This should be appropriate to the nature and value of the contract. So where the contract is for a service, or it is of a value to which the Public Contracts Regulations 2006 apply, the authority must follow the procedures for advertising, tendering and awarding contracts set out in those regulations. Where the service is of a nature or value that the Public Contracts Regulations 2006 do not apply (i.e. where it is listed in the regulations as being exempt, or is below the threshold of £156,000) then the authority will need to decide what sort of exercise to run – just as it will already do when contracting out a service. Other organisations may bid in the procurement exercise that follows a successful challenge relating to the provision of the service – these could include other relevant bodies, or private sector organisations.” [my emphasis - DP]

So the government says that the aim is to transfer services to local community and voluntary groups. But once these groups have gone to the time and expense of developing expressions of interest, they then get to compete against private sector companies in a procurement exercise. I wonder who will really benefit from this?

One thing which we know, and the government admits, is that small, innovative community groups are at a disadvantage when competing in procurement process against private companies and larger charities which are more distant from local communities.

If I worked for a private company which wanted to make serious money out of the Localism Bill, I'd already be preparing to make use of this legislation by working out how to get local authority workers or astroturf community groups to submit expressions of interest and open up contracts to bid for. Just as in the welfare to work field, more and more public money would end up going to a handful of private prime contractors, while small, innovative community groups lose their funding and have to cut or stop their work.

There's a very simple fix to this problem, if the aim is to encourage local community groups to have opportunities to run more services. Just amend the process so that only non-profit groups can take part in the procurement processes created by the Right to Challenge. But under the rhetoric of "more power for communities", the legislation as currently written is bad for users of public services - who can expect lower quality services and no protection if they fail, bad for community groups, and good for companies looking to make a profit out of public services.

The couple who could save the Big Society

As the latest relaunch of the Big Society flops, some people are calling for David Cameron to appoint someone senior who can champion the Big Society within government.

And as it happens, I know just the people, a couple whose track record, passion and commitment makes them uniquely qualified to make Big Society work.

*They volunteered on local community projects during their holidays - unlike the minister in charge of the Big Society or 92% of government MPs.

*They work closely with a wide range of charities, from better educational charities to decreasing maternity mortality to human rights and expanding access to the internet.

*She set up a children's charity which works to give every child the chance of a healthy and happy start in life, is a patron of two other charities, and co-authored a book to raise money for charity.

*He helped tens of thousands of young, unemployed people develop their skills by working for charities and community groups.

*He helped innovative start up charities and social enterprises get new kinds of funding and helped charities win contracts to deliver increasing numbers of public services.

*He helped increase the number of people who work for voluntary groups by more than 200,000, and oversaw huge increases in the number of people who offered to volunteer.

*He received a rapturous reception and standing ovations when he spoke at a conference organised by David Cameron's favourite community organising group, Citizens UK.

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If, as David Cameron says, the Big Society really is his passion, then he should take advice from two people who have a successful track record in so many areas of the Big Society - from setting up charities to volunteering, creating opportunities to deliver services differently to community organising.

But instead of seeking their advice, his cuts are destroying the society which Gordon and Sarah Brown helped build.

Is Labour's future conservative?

Marc Stears argues that Labour's emerging new identity, championed by people like Jon Cruddas and Lord Glasman and supported by Ed Miliband "is encouraging the Party towards a celebration of tradition, locality and even some forms of social conservatism. It is urging a shift away from the focus on the left on material redistribution and the need for public services always to be delivered directly by the state.

The emerging new identity, on this account, will be more localist and less statist than we have been used to. It will also be more focused on questions of belonging and identity and less concerned with issues of material equality."

Stears urges that we support this tradition, against the "liberals" "who worry that this new identity is dangerously conservative and contains too little to attract many of the minority groups with whom Labour has come closely to identify," and the "progressives" "who see the new identity as backward-looking and nostalgic. Labour, to them, should be about equipping Britain for global economic competition, through dynamic technology and transferable skills, rather than seeking to re-establish community life at a local level."

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I'm all for building deep roots in communities, moving away from decisions being taken by a Westminster elite and so on. But I would humbly suggest that this will involve a greater, not lesser, focus on material equality and high quality public services.

At a time when benefit cuts are making life even tougher for millions of low paid workers, disabled people, carers and the increasing number of unemployed people while bankers get back to business as usual, at a time when the NHS is under threat from being broken up and handed over to private health companies, when the government's policies will increase crime by slashing police numbers and youth services alike, this is the moment for Labour to talk about "belonging and identity" rather than greater equality and defending public services?

I think it is quite sad that Jon Cruddas and his allies have concluded that "Labour's future in England is conservative". There is a lot which this government and market forces are trying to destroy which should be conserved, from forests to Sure Start centres. But there is, now more than ever, a need for greater equality, good quality public services, and an active state. Abandoning that in favour of this week's new buzzwords is wrong in principle and wrong in practice.

More fun with the Big Society

Big Society, the gift that keeps giving:

"It could become the allegory of the "big society" age. The man appointed by the prime minister to kickstart a revolution in citizen activism is to scale back his hours after discovering that working for free three days a week is incompatible with "having a life".

Lord Wei of Shoreditch, who was given a Tory peerage last year and a desk in the Cabinet Office as the "big society tsar", is to reduce his hours on the project from three days a week to two, to allow him to see his family more and to take on other jobs to pay the bills...

The role is voluntary and Wei had to to give up jobs in the charitable sector when he was appointed to avoid a conflict of interest. Whitehall sources said that when he was invited to take the role he had expected it to be remunerated but was told only the night before that it was a voluntary post and there would be no salary."

Meanwhile, Lord Wei has decided to use some of his free time to concern troll lefties on his blog:

"There remain however risks ahead for this new consensus on society. First is Ballsonomics, that lingering belief that high spending and a big state in parts of Labour which has the potential to crush good society. The second is that in the move to decentralise power as part of the big society you simply recreate local versions of big government or other overweening institutions. The third is that Good Society ultimately becomes a cover for Big Government – direct (web-enabled and/or street-based) action that leads not to self help and mutual support but to a form of lobbying in which the assumption remains still that government should do everything."

Those wicked lefties, crushing the good society with their lingering belief that funding charities and community groups is preferable to taking away their funding! How dare the people come together to demand that councils keep libraries open rather than using the powers which we give them to do exactly what we want them to!