In Place of Austerity: Reconstructing the economy, state and public services

When even ex-Blairites are turning their back on the doctrine of New Public Management, why do such policies still guide reform? Dexter Whitfield's new book asks how we got here, and what practical alternatives there are for the future.


In Place of Austerity: Reconstructing the economy, state and public services by Dexter Whitfield, Spokesman Books, £18.00

A few months ago, Matthew Taylor, chief executive of the RSA, posted a remarkable but little-noticed article on his blog, headlined ‘NPM – RIP’. Taylor wrote:

“The core ideas of NPM [new public management] – greater reliance on market based mechanisms and contracting out, greater separation of decision making, professional and process functions – have been in the ascendancy for at least two decades. Today, the evidence of their failure is all around. Public service productivity has stagnated and fallen in the countries where NPM has been most fully applied. In the UK, the Private Finance Initiative – which as well as being a crude way of circumventing short term public spending limits is also heavily influenced by NPM thinking – is now exposed as a disaster.”

The article was remarkable because, as Tony Blair's former chief advisor, Taylor was – in his own words – an ‘advocate and architect’ of such policies. ‘Now he tells us!’ was one of the more printable reactions from a public sector union campaigner who had battled NPM doctrine over the last decade.

The tragedy is that such policies continue to drive public sector reform today, even when occasionally obscured by the window dressing of "Big Society" and "social investment". Meanwhile, the fight against public spending cuts has pushed many on the left towards purely defensive struggles, often leaving us appearing to support a status quo that was very much in need of reform, though not the kind of reform David Cameron had in mind.

In his new book, In Place of Austerity, Dexter Whitfield warns of the limits of this approach.

"The launch of campaigns to stop the cuts and defend public services is an understandable first reaction, but it has limited objectives. Defensive demands alone, to prevent this or restore that, are insufficient and merely highlight existing inadequacies in services. Campaigns ... need to go beyond simple calls for additional public expenditure, irrespective of the worthiness of the case, to propose how services should be planned, organised, managed and produced."

Whitfield, a professor of social research with a long track record of providing practical advice to public sector organisations, is well placed to make this case. In recent years he has advised council staff in Newcastle on a successful and innovative campaign to stave off privatisation, recounted in Hilary Wainwright and Mathew Little's Public Service Reform – But Not As We Know It (pdf), and is currently helping Barnet public servants fight their Conservative council's attempts to outsource everything that moves. Whitfield’s previous book, 2010's Global Auction of Public Assets, provides the most comprehensive critique of the Private Finance Initiative yet published.

In In Place of Austerity he sets out both to ‘develop a theoretical framework to better understand neoliberal transformation of public services and the welfare state’, and to offer campaign strategies and policy alternatives to this transformation.

Whitfield is particularly strong on the role of the public services industry, which he says is more accurately labelled the ‘privatisation industry’ or, simply, the ‘big business lobby’:

“There is not a separate ‘public services industry’; it is part of the services sector of the national, European, and, in many cases, global economy. There are few firms that rely wholly on public sector contracts, and the companies and consultancies that dominate services markets also operate in the private sector. It represents the vested interest of service providers. Ironic given that the same people regularly criticise trade unions for representing producer interests!”

Far from the welfare state being rolled back, we are seeing the extension of a corporate welfare state, which prioritises the well-being of corporations at public expense. The agenda has been pushed forward not just by elected officials but by quangos like the Office of Fair Trading, whose research appears ‘to be written by economists with little or no interest in, or understanding of, the political economy of the welfare state and public services’.

Whitfield’s book is subtitled ‘Reconstructing the economy, state and public services’. It is an ambitious brief – and sometimes overambitious. In his attempt to cover all bases, Whitfield sometimes appears to ignore his own advice, providing wish-lists of policies without a practical strategy to achieve them. Statements like “the renationalisation of water, energy and the railways … should be prioritised” aren’t much help without a roadmap to get there. 

But despite such quibbles there is much here of value. In his road-to-Damascus moment, Matthew Taylor called for a new paradigm built on ‘the re-socialisation of public service’. In Place of Austerity is a good place to start looking.

About the author

Clifford Singer is director of Social Spark and an advisor to We Own It.