Delivered! Why some policies work

Photo by Mika Baumeister on Unsplash

By Tim Thorlby

5 mins read

This is the fourth and final blog in a short series highlighting some of the UK’s most effective economic policy interventions of the last 25 years. It is a blog about how big changes can be achieved.

As noted in the first blog, and an important starting point, is the old and wise saying in policy circles which goes like this:

We tend to overestimate what we can achieve in one year and underestimate what we can achieve in ten years

This blog highlights the lessons we can identify from the three case studies of ‘economic policies that worked’. It shows us what a recipe for future policy success might include.

A brief review…

Let me recap the stories of the last three blogs in this series very briefly.

In the first blog, we looked at the introduction of the UK’s first statutory Minimum Wage by New Labour in 1999. This policy shifted from being politically impossible in the 1970s and 1980s to one that enjoyed broad political support and is now considered ‘part of the furniture’ of modern Britain.

In its first 25 years, the policy has established itself as one of the most successful of recent times. Today, it is estimated that low paid workers are up to £6,000 per year better off than they would have been without the Minimum Wage. It currently directly benefits 1.6 million workers.

In our second blog, we explored the rise and fall of Sure Start, one of the most remarkable state interventions of my lifetime. The long-term impact evaluations of this policy have underlined its ability to reach across society, into the most deprived communities and directly impact on social mobility and life chances through early intervention in education and health.

The policy paid for itself in terms of long-term savings to the taxpayer. The radical downsizing of this programme in 2010 is therefore probably one of the most incomprehensible acts of Government vandalism in living memory. Sure Start demonstrated that an integrated programme of support for families with young children could influence a child’s life trajectory, with educational, health and other benefits still in evidence years later.

In our third blog in this series, we celebrated the rise of social investment in the UK. Little more than an eccentric hobby in 2000, the newly commissioned Social Investment Task Force set in train a series of changes which has made the UK a world-leader in social investment and created a £10 billion market. These social investments enable a wide range of social, economic and environmental projects and services to deliver for the UK, at limited cost to the taxpayer. It has opened up a new and growing area of intervention.

Why are we talking about this?

In these blogs I have picked out three policies from the last 25 years that have demonstrably worked in delivering outcomes that have benefited our economy.

They are not the only ones I could have chosen, I could go on, but they serve to illustrate what is possible.

Why have I bothered?

I have written these blogs for two reasons.

Firstly, because there appears to be a growing cynicism about ‘Government’ in general, unhelpfully stoked by some parties for their own short-term gain. Aren’t all governments the same? Don’t they all fail to deliver?

Well, no.

The evidence quite clearly shows that governments of the last 25 years have differed quite markedly in their mindset, values and visions – they are quite clearly not all the same. And some of their policies have had huge impacts, for good.

Secondly, we are quite bad, collectively, at taking the long view. We forget successes very quickly and are very focused on short-term concerns and politics of the day. We need to begin to remember (as Paul Simon once said).

Many of the best things in life take years to come to fruition. It is the same with government policies. This may be inconvenient, but that’s how it is. It is a helpful discipline to look back, over the long term, and take stock of what has changed. And some of it is pretty good. There is much that needs to change in our world, but it is not all bad.  

Learning Lessons: how do we create successful policies?

In this rest of this blog, I want to bring together the evidence and lessons of the three policies we have looked at and identify some core messages. If you are looking for that elusive recipe for what makes a policy effective, then I think at least some of the answer can be found here.

Lesson 1: Free markets are a fiction; government is a partner for the common good

I just want to deal with this little myth first. There is a simple idea circulating in the UK – I hear someone talking about it almost every day in the media – that what we need is ‘free markets’. If only government would ‘get out of the way’ then business could ‘let rip’ and solve all of our problems and create lots of wealth along the way. In other words - Markets: good, Government: bad.

It is utter nonsense.

Not only is it a myth (i.e. not true) it is quite a damaging one, as it encourages people to think of all public regulation and intervention as a bad thing. If there is one thing I would like you to take away from the last three blogs, it is that positive interventions by governments – including into markets - can deliver good things, if done well. Not all interventions are equally effective, of course, but we should be wary of falling for the simplistic idea that markets somehow manage themselves or that Government is a bad thing.

In the Minimum Wage, we have an example of labour market regulation – putting a floor under low pay to prevent exploitation and to ensure that the returns of business are more fairly shared, at no expense to the tax-payer. It also gently encourages investment in businesses, as they cannot just rely on ‘cheap labour’, which is better for national productivity in the long run.

In Sure Start, we see how our public services are crucial in ensuring that our ‘markets’ have healthy and well qualified workers. This is state-led investment in human capital which is essential for the healthy functioning of UK business.

I am often mystified at how some business leaders are so antagonistic to paying tax….then in the next breath complain that they cannot hire qualified staff, or that their staff are on long-term sick leave because of hospital waiting lists or the roads are too congested with traffic. Our businesses function more efficiently when we collectively invest in infrastructure and people; these are the foundations of a happy market economy.

Finally, in the example of social investment, a whole new £10 billion market-place has been created….through state intervention. It required pump-priming, institution building and time. By creating a space, with institutions and rules, where investors can make informed decisions, a whole new area of endeavour has been established, contributing to greater fairness, quality of life and environmental sustainability…at little cost to the taxpayer.  

So, the first message I would highlight from this review is that we should not shy away from regulations and interventions that help us to get the best out of our marketplaces. The state and the market are partners, not opponents. Markets are at their most innovative, creative and competitive when they are intelligently well-regulated and supported. Government can be, and often is, a force for good. This mindset is crucial for the design of many policies.

Lesson 2: Long-term change requires cross-party support

In a noisy democracy like ours, we may find it inconvenient when everyone does not agree with our ideas, but we must not avoid the hard work of engaging in persuasion. It is what keeps our democracy on the rails – that willingness to talk to people who don’t (yet) agree with us. It requires some tolerance.

All of the policy examples we have looked at began their life as a crazy idea on someone’s desk – usually somewhere in the voluntary sector. Ideas often percolate into government discussions from the margins. Then they are discussed, often over many years.

Both the Minimum Wage and the development of social investment are good examples of ideas that took decades of discussion and debate to find their way into the mainstream. They then took years to find cross-party support – but they did and this has enabled a consistency of delivery, enabling them to mature, even as governments come and go. Sure Start is the one example here which lacked cross-party support which is probably why it came to be downsized in 2010.

I do not underestimate how difficult it is to achieve a cross-party consensus. But I note that it has always been difficult (was it any easier in the 1970s?) and yet still, sometimes, it happens.

Lesson 3: Institutions eat strategies for breakfast

Long-term change requires institutions to drive that change forward. Whether it’s a brand new organisation or a funding body or a partnership or a Task Force, the focus which that institution brings to an issue, together with regular, patient delivery year after year, significantly increases the chances of impact. This is ‘impact by design’.

We underestimate what we can achieve over the longer term; the value of an institution is to bring that steady focus over time, when the political bandwagon has moved on.

If you are working on a significant area of social, economic or environmental change the first question must be – which institution is going to drive this change in the long term? If there isn’t one, you may well need to create one.

Lesson 4: Big changes follow big visions

There is a degree of audacity and courage required at the outset of any process of change, fired by a passion to fix a real problem. I think people respond well to big, worthwhile ambitions. If we have big issues, then let’s fix them. Tinkering at the margins doesn’t inspire people.

Is the age of Big Visions over? I don’t think so.

Lesson 5: Big changes start with small changes

All of the examples we have looked at began with more modest interventions; they did not start fully formed. The Minimum Wage was set low to build confidence in it and test it out. Sure Start began as a pilot and evolved its form over its lifetime. Social investment began as a Task Force, asking questions and building partnerships and support. They all played the long game. The risk of an ‘all or nothing’ strategy is that you get nothing.

Lesson 6: Local government can deliver transformation

Local government is the UK’s sleeping giant.

There is plenty of evidence from our own history and the current practices of other European countries that an empowered, funded and accountable tier of sub-regional government can be highly effective at delivering regeneration and change.

Local government is not the answer to every policy issue, but it certainly has a bigger role to play in building towns and cities that provide great places to live, affordable housing and growing local economies. It is well placed to deliver many public services and invest in infrastructure and people. If we want to see more effective economic policies in future, local government is a key tool that needs dusting off and restoring to its full place in the national toolkit.

Conclusions

Consistently and patiently working towards long term goals can be a very effective strategy for delivering serious change, even if it feels slow from year to year.

Over the last few months we have celebrated examples of significant change in the UK which have benefited from that patient, long-term approach. It’s amazing what we can do.

Is there more to come? Of course there is.

At a time of great uncertainty and discouragement, building for the future may require more hope, courage and emotional energy than usual. But working together for the Common Good has never been so urgent.

Is something bothering you today? Then let’s organise.

This blog was written by Tim Thorlby. Please sign up for the email alert if you’d like to know about future blogs, usually published once a month.