In addition to their neighbourhood renewal plans, New Labour placed public services in the centre of their agenda through a public sector reform, which comprised increased spending and changes in the way services were delivered. When Labour came to power, public services had experienced under- investment under the Conservative governments from the 1980s, and public expenditure had been reduced with tightened spending controls. Under the Labour government, spending on public services grew by an average of 4.4 % a year in real terms. This was mainly due to increased spending on healthcare, education, and transport, as estimated by the IFS (Chote et al., 2010). It was estimated that both the quantity and quality of services improved by a third between 1997 and 2007. However, their productivity fell as service outputs were less than the increase in inputs, and the relative price of inputs rose with inflation. Further, increases in prices and pay meant that public service inputs grew only about 3.3% a year. In terms of what taxpayers were receiving for their money, the average quantity of public service outputs over spending actually fell by 13.4% in the 10-year period. The report by IFS however notes the possibility of the extra inputs having improved the quality of services in ways that could not be measured, such as teachers’ higher pay leading to more satisfaction and motivation (Chote et al., 2010).
New Labour’s agenda further aimed to modernise service delivery and make public services more responsive to individuals and communities’ needs. To achieve this, as key characteristics of the approach can be identified the promotion of partnerships and greater use of private sector funding. A distinctive approach in New Labour’s reform, named the ‘Third Way’, implied the introduction of local partnerships between local authorities, community and voluntary organisations, and private agencies. Therefore the Third Way increased the role of private, voluntary and community organisations in services delivery and thereby encouraged networks between the state, businesses, and the voluntary and public sectors (ODMP, 2005a; Lupton &
Tunstall, 2008; Needham, 2007). The rationale behind Third Way was essentially to combine the state with the market while minimising the disadvantages of both; not leaving neighbourhoods to be controlled by property and labour markets but neither intervening too much (Imrie & Raco, 2003; Lupton & Tunstall, 2008; Needham, 2007).
In addition to a partnership approach, the role of private funding was manifested in Public-Private Partnerships (PPPs), which New Labour introduced as a key policy instrument to respond to poorly performing public services. PPPs originated from the Private Finance Initiative (PFI) programme launched in 1992, which had implied a change in the procurement of major assets for local authorities even before Labour’s reforms. Under PFI, the public sector shifted from procurement of service assets to purchasing or contracting services to the private sector, which meant that local authorities would for example lease school and office buildings from private companies that would in turn be responsible for the management and operation of facilities. PFI aimed to improve local authorities’ access to capital investment and transfer risks involved to contractors while introducing private sector managerial skills to public sector workers (Hood & McGarvey, 2002; Poole & Mooney, 2006). However, the PFI/PPP model has been criticised for its commitment to efficiency goals in service provision and lack of accountability over public sector spending. Increased efficiency measures were considered likely to impact quality, where councils opt for the cheapest form of delivery, such as construction of public buildings, under the ‘best value’ policy. PPPs were adopted by Scotland’s local authorities to carry out projects involving large- scale investment. In the early 2000s, major PPP projects had been undertaken on roads and infrastructure, and the refurbishment and building of schools and hospitals (Hood & McGarvey, 2002; Poole & Mooney, 2006).
Some claim that the increase of privatisation and efficiency in New Labour’s public service reform represent a continuation of the previous Conservative governments’ reshaping of the sector. At the same time as spending had been increased, cost-efficiency was expanded in service provision. For example, co- payments for the use of services that previously had been tax-funded were introduced (e.g., university tuition fees). Conditionality was introduced across different public services; this included the large-scale transfers of social
housing stock to ‘arms-lengths’ management organisations, and expansion of means-testing in welfare benefits (Needham, 2007). According to critics, Labour continued ‘dismantling the cornerstones of the post-war welfare state’ by retaining of some of the Conservative government’s interventions, such as deregulation and privatisation (Imrie & Raco, 2003, p. 13; Needham, 2007). The Thatcher and Major governments (1979-1997) had redefined the scope of public services in a substantial way. While New Labour made significant efforts to address services, it is said to have carried on the reforms, and in some cases intensified measures of efficiency, decentralisation, and privatisation.
Some notable differences can be found in regard to the delivery of public services in Scotland, where the Scottish administration established in 1999 gained legislative and executive powers over a number of public services. Key policy divergences of Scottish policy in the early 2000s occurred in education, and health and social care, with the abolishment of university tuition fees, free long-term care for older people, and better pay and conditions for teachers, while the NHS in Scotland has tended to receive higher levels of funding (Mooney & Poole, 2004). Other devolved services included environmental and leisure services, and many aspects of transport such as rail services1. Keating
(2005) argues that Scotland’s Policy differentiation derives from a greater commitment to social justice and public provision of services. Some elements of marketisation and competition were not introduced in Scotland as in England, where New Labour’s shift away from public provision to market-based solutions and PFI was more marked, and Scotland (at least at the time of Keating’s writing) maintained a greater reliance on local government as a service provider (ibid.).
In Scotland, the partnership approach has been particularly manifested in Community Planning Partnerships (CPPs) established through the Local Government Scotland Act 2003. CPPs have become a key focus in the delivery of public services in Scotland and aim to improve service delivery by addressing the priorities and needs of specific areas. CPPs represent a joined-up approach to improve service delivery by encouraging local authorities, voluntary, community, and private sectors to work together to develop and implement a
strategy for their area (Communities Scotland, 2003; Sinclair, 2008). Community Planning also represents a shift in local government decision- making to a ‘governance’ model bringing together multiple actors, as it aims to increase community involvement and citizen participation in decision- making. Community participation in the development and delivery of services would be realised through committees and other forms of area-level participation (Scottish Executive, 2002b; 2002b; Communities Scotland, 2003).
The 2003 Act made participation in partnerships mandatory for the joint health, police, and fire service boards, Scottish Enterprise, and regional transport partnerships. Partnerships have been formed to address a range of local issues in areas such as health and social care, education and early-years development, employment, and police and fire services (Asenova et al., 2007). Community planning has particularly been applied in environment planning and regeneration, and for example, CPPs were consulted in the regeneration of disadvantaged neighbourhoods in 2004/5 (Scottish Executive, 2002b; 2006).
Many however remain sceptical of the benefits of Community Planning. Effective partnership working is seen to require local community and voluntary organisations to be involved in the process a meaningful way, while partnerships can often be led by governmental agencies and have an inherent power structure. Partnerships therefore set additional requirements for communication, mutual relationships and trust between organisations, and the bureaucracy involved in working between multiple agencies can be a burden on some organisations, while consultations may also involve increased time demands and costs on citizens. Moreover, research has found the effectiveness of partnerships limited, if they are not integrated into mainstream local government programmes and decision-making, and if neighbourhood-level initiatives are not supported by policy at higher spatial levels (Laffin et al., 2006; Sinclair, 2008; Cook, 2015).
Researchers have noted that the establishment of area-based partnerships and CPPs were allied with the modernisation and efficiency reforms by the New Labour as well as the Scottish Government (Sinclair, 2008; Mooney & Poole, 2004; Keating, 2005). Partnerships can be said to have reflected the agenda of decentralisation of government and increased market orientation in public
service delivery (ODPM, 2005a; Scottish Executive, 2006). This had been accompanied by financial controls and performance targets for local government already under the Conservatives, which were intensified under Labour (Needham, 2007), while Scotland has not adopted a similar emphasis on regulation and targets as England (Sinclair, 2008). The reforms have further been criticised for contradictions with the urban policy of New Labour. As ‘core’ public services such as healthcare and transport are increasingly being operated by private sector companies, private services are likely to leave poorer communities that lack the consumer or market power to safeguard existing levels of service, thereby contributing to their isolation (Rose, 2000c, in Imrie & Raco, 2003).