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Party Conferences 2011 The Social Market Foundation is an independent public policy think tank, developing and advancing innovative solutions across a broad range of economic and social policy. We publish original research, hold seminars and debates in Westminster and beyond, and run a diverse programme of events at the three main party conferences. Since its foundation in 1989, the work of the SMF has been principally devoted to promoting the social market philosophy, which seeks to marry markets and social justice. It neither sees the market as a necessary evil nor as an end in itself but as a means to improve people’s lives. It is underpinned by adherence to two key principles: first, a positive preference for market mechanisms, while recognising that a truly pro-market approach is often not a free-market one; and second, a belief that a sustainable market economy rests on social and political foundations that are widely regarded as fair. Our work aims to elucidate these ideas and to explain why the social market is a fruitful source of solutions to public policy problems. For further information please contact Rachel Baker on 020 7227 4404 or email RBaker@smf.co.uk Social Market Foundation 11 Tufton Street Westminster London SW1P 3QB Phone : + 44 (0) 20 7222 7060 Fax: +44 (0) 20 7222 0310 enquiries@smf.co.uk
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CONTENTS Introduction Autumn 2011: one year on for the Coalition
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SMF party conference activity in 2010
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Working with us at conference
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Party conference themes 2011 The new economy, growth and employment
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Public services reform
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Health
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Energy and climate change
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Transport
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Financial services
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Housing
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Families, schools and education
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INTRODUCTION The Social Market Foundation is a leading UK public policy think tank, developing and advancing innovative solutions across a broad range of economic and social policy. The SMF combines a wealth of party conference experience with policy expertise to produce first-rate events. Strong links with each of the three main parties enable us to involve top politicians in our debates, making SMF events some of the best-attended fringe meetings at conference.
Building on a highly successful programme in 2010, we are currently seeking sponsors to work with us at the Conservative, Labour and Liberal Democrat conferences this autumn. Our 2011 fringe programme will tackle issues ranging from growth policy to public service reform. This document outlines some of the hot topics that we would like to debate this autumn, in the second year of the Coalition Government, and tells you how you can work with us this year.
Autumn 2011: one year on for the Coalition The 2011 party conference season will come at a crucial time in UK politics. Just over a year on from the formation of the Coalition, key elements of the Government’s bold programme of deficit reduction and public service reform will be starting to kick in, while the delivery of others remains to be decided. Determined to move quickly, the Government cannot be accused of a lack of ideas or proposals. New initiatives are being announced almost every week – student charters, GP commissioning, user-driven public services – opening up new opportunities to radically change the way public services are delivered. But many questions remain to be answered: how might ‘payment by results’ in Further Education or offender rehabilitation lead to better outcomes at lower cost to the taxpayer? How can we restore consumers’ trust in the financial services industry? And what can be done to rebalance economic growth and ensure that all areas of the UK benefit? While the Government has charted a broad direction of travel, success depends on how reform is implemented. The reality is that issues as big and complex as these are rarely solved with one white paper or a single bold announcement. That is why the 2011 party conferences will be a prime opportunity to join the debate and help to shape the policies and ideas that will determine what the UK looks like in the years ahead. The Social Market Foundation’s party conference events programme offers the perfect way for your organisation to get involved. At the SMF, we have been running successful and highly respected fringe events at the major political party conferences for many years. SMF events are known for their professionalism, high profile speakers and innovative debates. This, coupled with our independent, non-partisan approach, makes us an ideal choice for any organisation wishing to engage intelligently and constructively in the issues facing policymakers, politicians and the public at this crucial time.
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SMF party conference activity in 2010 The 2010 SMF party conference fringe programme was one of our most successful ever. Speakers at our 35 fringe events last year included: • • • • • • • • • • • • • • • • • • • • • • • • •
Rt Hon Dr Vince Cable MP – Secretary of State for Business, Innovation and Skills Rt Hon Danny Alexander MP - Chief Secretary to the Treasury Steve Webb MP – Pensions Minister Lord Newby - Liberal Democrat Treasury Parliamentary Policy Committee Rt Hon Angela Eagle MP - Shadow Chief Secretary to the Treasury Rt Hon Liam Byrne MP – Shadow Work and Pensions Secretary Rt Hon Caroline Flint MP – Shadow Secretary of State for Communities and Local Government Rt Hon Pat McFadden MP – Former Shadow Industry Minister Anne Begg MP - Chair of the Work and Pensions Select Committee Lord McFall – Former Chair of the Treasury Select Committee Rt Hon David Lammy MP – Former Higher Education Minister Rt Hon Oliver Letwin MP – Minister of State for the Cabinet Office John Hayes MP – Skills Minister Lord Freud - Minister for Welfare Reform Crispin Blunt MP – Prisons Minister Maria Miller MP – Minister for Disabled People Brendan Barber – TUC Aaron Porter – NUS Richard Lambert – Former CBI Polly Toynbee – The Guardian Norma Cohen – Financial Times Phil Collins – The Times Doug Taylor – Which? Rafael Behr – The Observer Camilla Cavendish – The Times
Working with us at conference The SMF has over 10 years of experience at organising high-profile, cutting-edge debates at the party conferences. Supporters of SMF conference fringe events have the opportunity to: •
help shape the key questions for debate;
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input into the speaker line up;
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build brand profile through SMF’s marketing and promotion;
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network with conference delegates.
Our sponsoring partners can expect to benefit from SMF’s many years of experience at running successful party conference fringe events. In particular, sponsors can expect: •
excellent administrative services, with our team handling all aspects of the event administration and logistics;
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regular sponsor liaison, with a dedicated conference manager;
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an excellent fringe event without the hassle!
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We work with our sponsors to design each fringe event to be as interesting and topical as possible. Our conference team gives sponsors the opportunity to input into the speaker line-up. We also work with sponsors to sharpen the focus of the debate. Further benefits to sponsors include a place on the panel for a speaker from their organisation (where appropriate to the content of the event), and space for banner stands and associated literature at the event.
The SMF takes responsibility for the project management of the event including: •
securing panel speakers and speaker management;
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securing venues – both within and outside the secure zones – through liaison with the respective parties;
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event marketing and promotion including: entry in the parties’ fringe listings (featuring sponsor logos); promotion in SMF flyers; marketing through the SMF’s extensive database of contacts; promotion through social media, including the possibility for live tweeting, podcasting and filming of the event; and, where appropriate, individual targeted invitations to prospective attendees;
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guidance and assistance in the process of obtaining conference passes;
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all event logistics including provision of catering and audio-visual equipment;
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transfer of sponsor banner stands and literature to and from the conference(s);
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on-the-day management of the event.
Our party conference fringe programme has been a key element of the SMF’s work for many years, which is why we have a highly experienced full-time conference manager, who works with our events team all year on preparing and delivering our programme of debates across the three party conferences. This enables us to offer an excellent standard of service to our sponsors, as many of last year’s partners can attest.
“Very well organised and attended events with excellent panellists stimulating an interesting discussion on the key pensions issues.” John Jory, B&CE Benefit Systems, 2010 sponsor “Our clients were very pleased with the level of debate generated at the events, with childcare vouchers positioned as essential to help working families overcome the rising costs of childcare. They have been very pleased overall with the work we have done with you over the past year or so.” Marc Woolfson, Westminster Advisers, 2010 sponsor
SMF Conference Fringe 2011 Themes Below are some of the themes we hope to examine at this year’s party conference events. We would be delighted to discuss these or other areas of mutual interest, with potential sponsors. For further information, please contact Rachel Baker, Conference Manager on 020 7227 4404 or email RBaker@smf.co.uk
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PARTY CONFERENCE FRINGE THEMES 2011 The new economy, growth and employment The Growth Strategy: walking the economic tightrope With GDP growth having stalled in the fourth quarter of 2010 and with public spending cuts looming, the prospects for growth and employment look uncertain. The Government’s agenda for growth is less clear than its deficit reduction plans. But what should such a strategy look like? What tools to implement such a strategy does a liberal government have? •
What can government do to facilitate growth?
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Is there a tension between Big Society aims and business needs?
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How can the Government ensure geographically balanced growth that benefits all regions of the UK?
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Will the Government’s planning reforms discourage infrastructure investment and regional business growth?
Localism and growth: irreconcilable agendas? The Government has set much store by its plans to strengthen local government and local accountability. This is most clearly expressed in reforms to housing policy in which central targets for home-building have been replaced by financial incentives from the centre and greater discretion for local authorities. But if the incentives are wrong, could localism be more of a burden than a spur to growth? •
Will the New Homes Bonus work?
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Is it possible to target financial incentives at those affected by new building?
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Would land auctions be a better scheme for freeing-up the planning system?
Take the manufacturing ‘high road’ UK manufacturing is highly polarised, with many world-leading companies and a long tail of low value-adding firms, whose exports compete on price and who employ low-skilled labour. Government policy has a huge impact in setting the environment in which firms operate. If the UK is to successfully rebalance its economy, the challenge will be to ensure that the policy environment helps firms to move up the value chain and export. •
Are Local Enterprise Partnerships likely to be effective in stimulating regional growth?
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What is the solution to the business need for ‘patient’ capital?
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How should the Government reform the skills system to support high value-adding industry in the UK?
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Public service reform Welfare reform in uncharted territory The Coalition Government has set in train a radical programme of reforms to the welfare system through the launch of the Work Programme and the development of a Universal Credit. The aim is to improve the support available to millions of people to help them get back to work, while also increasing the financial rewards for doing so and making the benefits system easier to understand. But these reforms will take place in the face of a weak labour market, and young people in particular are being hit hard. •
Can the Work Programme work in a recession? How should it evolve over the coming years?
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Should the Government consider make-work schemes to bolster employment to prevent a generation of young people becoming disengaged from the world of work?
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Will Universal Credit provide sufficient childcare support for parents to return to work?
A market for skills? A skilled workforce is at the heart of any economic strategy to deliver growth and prosperity in the UK over the coming decades. Yet, despite big increases in the skills budget – £4bn is spent each year on adult skills alone – the UK’s position in the OECD rankings for skills looks set to deteriorate by 2020. Can market forces be deployed to improve the effectiveness of public funds? Repeated tinkering and new programmes being bolted on to existing provision – and budget cuts – suggest that a ground-up re-evaluation of the UK’s skills funding system would be fruitful, with market forces driving efficient funding of the most effective providers. •
How can government create a more effective market, with supply of skills provision for jobs that employers and individuals want?
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What sort of funding model should the Government deploy to better link skills provision to jobs that are valued in the labour market?
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Is a ‘payment by results’ framework, along the lines of the Work Programme, viable?
Breaking the crime cycle The recent green paper Breaking the Cycle set out ambitious plans for a model of payment by results in offender management, where contractors will be paid for reducing the re-offending rates of offenders under their care. An example of this kind of programme is the Peterborough pilot scheme where a social impact bond will be used to fund innovative new interventions to tackle recidivism. What is the potential for a national payment by results approach to be adopted and what will be the appropriate design of the system to make this work? •
What are the challenges for a payment by results model in this area?
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What lessons should the Ministry of Justice learn from the Peterborough experience and the pilot schemes that are soon to be launched?
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How attractive is this market to investors? How should it evolve to become a more attractive proposition?
Public service reform: breaking the silos Welfare reform, criminal justice and skills are all areas of public service reform where there is strong policy interest in exploring the idea of paying by results. Ultimately, this commissioning model represents the best chance for breaking down the silos between funding streams that can lead to inefficient and overlapping public service provision. How far can this agenda go and what should the public services market look like in 2021? •
To what extent will the payment by results market converge in the years ahead?
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Is there sufficient information on outcomes for such a market to develop?
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Is there sufficient investor appetite for a unified payment by results approach to public service delivery?
Mutual benefit? The Government’s plans for wide-ranging public service reform involve using mutual and other community and private sector organisations in the delivery of services. The aim is to free-up front line professionals to use their knowledge and expertise to deliver services in the most effective way possible. But while Whitehall might relax its grip on the front line, how can it ensure that it retains tight control of public spending and hold providers to account for what they do? •
How much autonomy should mutuals have?
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Why should the private sector be excluded from running services such as free schools?
Reforming legal aid: a price tag on justice? The government has announced plans to slice £350m from the annual legal aid bill, narrowing the scope of public funding and removing swathes of potential clients from accessing legal aid. At the same time, the Ministry of Justice is proposing to implement Lord Justice Jackson's reforms of litigation costs to bring in a “no win no fee” agreement under civil litigation. With public service provision meaning equal access to justice, how will these proposals affect those on low incomes seeking legal advice and representation? And can the private legal services market pick up the slack? •
Will reducing choice in legal services prevent litigation?
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Where will people go for help or advice if legal aid is no longer available?
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Can savings be made elsewhere in the legal aid system?
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Will the Jackson reforms skew the legal advice market in favour of “easy wins”?
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Health GP commissioning The Health and Social Care Bill will be the biggest shake up of the NHS in its history, strengthening choice and competition with the aims to drive up standards. A key aspect of the changes is to devolve the health commissioning decisions of around £80bn of NHS expenditure to GPs. Many medical professionals, including the NHS Confederation, the British Medical Association, Royal College of Nursing, the Faculty of Public Health and others have warned that health secretary Andrew Lansley’s reforms are ‘extraordinarily risky’. •
Is ‘Any Willing Provider’ at risk of reducing patient choice in the NHS rather than expanding it?
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How can we ensure that GPs have the necessary skills to manage the commissioning aspects of their fastchanging role?
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Will reform succeed in making health more innovative?
Price competition and quality of care? The Health and Social Care Bill sets out the Government’s plans to strengthen the competitive pressures on providers by opening the market up to any willing provider to compete on price. This has been the focus of controversy since much academic research shows that price competition can have a deleterious effect on quality and hence patient outcomes. Others fear that the introduction of price competition could undermine the doctor-patient relationship. •
Will the proposed regulation be sufficient to allow price competition without reductions in quality of care?
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If the market is to be so carefully regulated, will price competition operate in any meaningful way?
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Is price competition necessary to enact the key principles behind the reforms?
An independent board and political accountability The Government plans to turn the existing Foundation Trust regulator, Monitor, into a full economic regulator for the NHS, with responsibility for allocating resources and overseeing the commissioning of care. This reform will, for the first time, take the allocation of NHS resources away from the Department of Health and the Secretary of State. But is such an approach sustainable in the context of the other competition-based reforms proposed? •
Will the political independence of Monitor survive the closing of hospitals in marginal constituencies?
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Should an organisation allocating over £100bn of public money be entirely independent of the Secretary of State?
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NICE turned nasty? What will the new system of value-based pricing mean for the NHS? Under the new system the National Institute for Health and Clinical Excellence (NICE) will cease to be the final arbiter of value for money in healthcare. Instead, its assessment will serve only as guidance for GP commissioners in their allocation of resources. •
Does the changed status of NICE risk a loss of accountability for public money?
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Can we ensure that, without NICE, resources will not simply be allocated on the basis of those patients who can advocate most effectively for their needs?
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Energy and climate change Green Investment Bank: fit for purpose? By the autumn, we will know the basic structure of the Green Investment Bank. It could be a fully-fledged bank, capable of leveraging its capital, but this entails risk for taxpayers, against Treasury wishes. It could be a fund on the Government’s balance sheet, but this would probably be too small, as UK energy infrastructure investment needs, over the next decade, run into the hundreds of billions. Or it could be an off balance sheet vehicle, where private and government funds coinvest in green projects, but investors may not have the risk appetite. •
Will the GIB meet the Government’s concomitant objectives for fiscal retrenchment and increased green investment?
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Does co-investment by government help to alleviate political risk?
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Is the problem that green projects are too risky rather than too costly? If so, do taxpayers have to take on risk to get investment flowing?
Carbon prices and the UK subsidy regime The Government has proposed a price floor for European Trading Scheme quotas. This would effectively impose a CO2 tax on companies if the quota price falls below a certain threshold. It is also proposing reform of the feed-in tariff system for solar power, and the Renewables Obligation, which subsidises renewables through energy bills. These changes create uncertainty in the market, reducing investment incentives. They also create winners and losers: nuclear power would be handed a large subsidy by a carbon price floor. •
Should government subsidise nuclear power, directly or indirectly, to achieve CO2 targets?
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How should government trade-off regulatory simplicity and the need to alter incentives?
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How should government best create a stable price for carbon over the long term?
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How can the long-term political risk associated with the carbon price for would-be investors be reduced?
Energy efficiency and fuel poverty: who pays? The Government’s green objectives push fuel bills up, increasing fuel poverty. The government mandates that energy companies offer lower bills for people on low incomes, which entails a cross-subsidy from other bills. But many of the 5.5 million people who are in fuel poverty do not receive these subsidies, and are instead hit with higher bills. The Carbon Emission Reduction Target scheme also makes energy companies pay for energy efficiency measures – costs that are passed onto consumers. •
Should these schemes be extended to all 5.5 million people in fuel poverty, to end unfair cross-subsidy?
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Are energy bills the fairest way of subsidising fuel poverty and energy efficiency, or should we use the tax system?
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Can fuel poverty really be eradicated if the government is to meet its CO2 targets?
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Transport High speed rail links Plans to build High Speed 2 proceed apace, with public consultation on the plans now underway. Supporters argue that the investment will generate substantial returns as well as greening UK transport. But the scheme is not without controversy. Those who stand to be affected by the line are unsurprisingly restive. But others too have concerns. What will the diversion of resources into HS2 mean for the less glamorous, but more important, conventional rail network? •
Is high speed rail the right infrastructure for the UK to invest in?
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What are the implications for the rest of the network?
Fuel prices and stabilisers With commodity prices rising and political uncertainty in the Middle East driving oil prices to record highs, the prospect of rising fuel duty is not going down well in car-reliant Britain. The motoring lobby wants the Government to introduce a fuel price stabiliser so that duty levels cushion underlying price rises. •
What impact is the rising fuel price likely to have on the economy?
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Is it possible to design a fuel price stabiliser?
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How does such a policy fit with the Government’s green agenda?
Road user charging: politically toxic or more necessary than ever? Congestion on the roads imposes massive costs on the economy, calculated at up to £20bn per year. This is due, at least in part, to the fact that the costs of using UK roads are unrelated to the time of use and route taken. Hence motorists have little incentive to reduce congestion, and there is no price mechanism to help them do so. Proposals to introduce road user charging have foundered in the face of public resistance to change. Road charging would tackle the scourge of congestion, relieving a huge cost burden on individuals and companies , providing a crucial boost to the economy. •
How can public resistance to road charging be overcome?
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What does the experience of other countries tell us about the potential impact of road charging?
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Financial services Trust in financial services The financially excluded tend to register a high degree of mistrust in financial products and providers. This is critical to a wide range of policy objectives, from economic growth to welfare provision. People on low incomes, older people and women are more likely to save less and have worse financial outcomes than other groups. Trust in products, information and providers is a key factor in take-up, as are income, age and gender. In the wake of the financial crash, what should government and the industry be doing to rebuild consumers’ trust? •
What impact has the financial crisis had on trust in financial service providers?
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Is there a role for government sponsored products such as the Sandler products?
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Is it time for product intervention by the FSA to restore trust?
Financial inclusion The Coalition Government has axed the Child Trust Fund and Savings Gateway, although the National Employment Savings Trust (NEST) and pensions auto-enrolment is proceeding. At the same time, funding for the Financial Inclusion Fund is set to run out in 2012. With funding squeezed, what is the right direction for financial inclusion policy? •
What should government’s role be in boosting financial inclusion?
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How successful is financial education likely to be?
Lending to SMEs or selling the banks? SMEs are the engine-room of the economy, but with UK banks rebuilding their balance sheets after the financial crisis, the capacity for SME lending is heavily constrained. Project Merlin set out agreements between UK banks and the Government for the former to raise business lending by £10bn in 2011. But increased lending carries risks for the taxpayer too, threatening the value of the partially state-owned banks, RBS and Lloyds-HBOS. •
Should the Treasury seek to maximise the value of taxpayer stakes in the banks, or should it prioritise SME lending?
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When should the Government look to sell its stakes in the banks?
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Are there equity vehicles that government could facilitate that could reduce SME reliance on debt finance?
Auto-enrolment: will enforced pensions lead to levelling down? An important consequence of the much-lauded auto-enrolment pension scheme, NEST, set to launch next year, is the risk that as well as improving pension provision for employees currently without a scheme, it may cause more generous schemes to ‘level down’. This would leave many people substantially less well protected than they currently are. •
Is there a danger that NEST will make a virtue of apathy?
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How can we ensure that the default NEST option is seen as a minimum rather than the norm?
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Housing New Homes Bonus Housing policy in the UK is going through radical change under the Coalition Government. The emerging policies imply a radical shake-up of policy around house-building, with the abolition of national targets. At the root of the Government’s new ideas are pro-market principles which could have a huge impact on housing supply. But there are also risks and huge implementation challenges for the agenda. •
What impact will the New Homes Bonus have on aggregate levels of house building in the UK?
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Should the Government explore planning auctions as a means of freeing up land for house-building?
Social housing Social housing reform is a key aspect of the Government’s reforms to public services. Removing life tenure and increasing residential mobility through a ‘freedom pass’ have been discussed. Meanwhile, tighter rules on Housing Benefit entitlement for private rented sector tenants aim to boost work incentives and reduce the spiralling cost of the benefit. •
Is there sufficient capacity in the social rented sector to allow greater mobility for tenants?
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Do the Government’s plans help to ensure that social housing is allocated to those in greatest need?
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Are the reforms to Housing Benefit fair?
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Children, families and education Future funding of childcare Childcare is critical for boosting children’s development and supporting parental employment. The Universal Credit will be a radical transformation to the current benefits and tax credit system, with the future of demand-side childcare funding still being consulted on. This is a real opportunity for stakeholders to assess and explore the effectiveness and fairness of different funding models so that the affordability, flexibility, quality and sustainability of childcare improves. •
Who will be the winners and losers from reforms to childcare support through the tax credit system?
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How can we boost the quality and affordability of pre-school education in the UK?
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How do we create a childcare system which responds to the different and complex needs and demands of parents?
A market in higher education The new Coalition Government has successfully passed controversial plans through parliament to raise the cap on tuition fees to £9,000 per year. However, there are concerns about the sustainability of a market in higher education. Since government is liable for the loans distributed, universities take little risk for the fees they charge, potentially leading to upward pressure on prices. Government meanwhile carries the cost burden of a subsidised interest rate on student loans and debt forgiveness for graduates after 30 years. This limits the amount of loans that can be distributed, and ultimately restricts the places that different universities can provide, thereby thwarting growth and a fully operational market. •
Will higher tuition fees lead to improved teaching for students and better outcomes for graduates?
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Will higher, variable fees dampen demand for elite universities for those from lower income backgrounds?
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Will a true market – with universities that expand, universities that fail, and with different providers charging variable fees – emerge from the HE reforms?
Free schools and academies: boosting standards and equality of opportunity? The Secretary of State for Education is determined to increase the supply of good schools to ensure more parents, particularly those on lower incomes, can access a high-quality education for their children. Free schools and academies will not be accountable to Local Education Authorities, reducing the power of the latter. But will increased autonomy for schools lead to improved performance and enhanced equity? •
Will greater school capacity and choice drive up quality and provide greater equality of opportunity?
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Will we see greater decentralisation of power to local bodies or consumers in the education system under the Coalition Government?
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If school operators are not allowed to make a profit, will free schools ever have a significant impact on the UK school system?
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A less Sure Start? The last Government created Sure Start Children’s Centres – hubs at the heart of communities offering education, employment and health support to young families – and over 3,500 were up and running by 2010. David Cameron promised to retain them but improve their performance through a new payment by results mechanism. The future of Sure Start is uncertain. What will and should it look like in the years ahead? •
How should payment by results for Sure Start Children’s Centres work?
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What is the best funding model to ensure the long-term sustainability of Children’s Centres?
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How can accountability and quality in Sure Start provision be improved?
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The Social Market Foundation Board Members Mary Ann Sieghart (Chair) Viscount Chandos Gavyn Davies OBE Daniel Franklin Martin Ivens Graham Mather Brian Pomeroy CBE Ian Mulheirn (Director)
Policy Advisory Board Lord Adebowale CBE Wendy Alexander MSP Professor Nicholas Barr David Blunkett MP Liam Byrne MP Dr Vincent Cable MP Philip Collins Simon Crine Don Cruickshank Evan Davis Patrick Diamond Stephen Dorrell MP Daniel Finkelstein OBE Stephen Gilbert MP Sam Gyimah MP Liam Halligan Matthew Hancock MP Lord Haskins Evan Harris Will Hutton Margot James MP
Sarah Jackson Baroness Susan Kramer Sir Peter Lampl OBE Charlotte Leslie MP Alan Milburn George Osborne MP Ben Page Lord Parekh Trevor Phillips OBE Lord Plant Rachel Reeves MP Dr Anthony Seldon Sir Stephen Sherbourne CBE Sue Slipman OBE Lord Stevenson CBE Will Straw John Tizard Lord Turnbull KCB CVO Stephen Twigg Andrew Tyrie MP
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