The best way to bring down childcare costs

Exactly three years ago, I was travelling with my young family to western Massachusetts to help develop the institution now known as the New Economics Institute.


It was a fascinating time, but tough in its own way, snowed in for around five weeks on the side of a mountain outside Great Barrington.  I have never welcomed the first emergence of spring quite as much as I did then.

Mt children were then five and turning three, and it raised the question of schooling and childcare.  Struggling into town through the ice and snow in a borrowed ancient Volvo had its own challenges, but I am very glad we did because I discovered the Great Barrington Co-operative Nursery.  Both my children adored it, though the youngest took the precaution of never taking his coat off.  The eldest still wears the T-shirt he was given as a farewell present.

The point is here is the business model they used.  There were two members of staff and the staffing was boosted by one or two parents who helped run the nursery twice a month as part of the fees.  The result was that the fees were about half as much a month as anything equivalent in the UK.

I reminisce about this because of he argument today in the UK about how to bring down the cost of childcare, and the complaints about the measures taken to day - basically to increase the staffing ratios.  I have no idea whether that will bring down the cost, though it seems unlikely to make much difference, but we appear to be missing the key solution, which is mutual.

There are mutual nursery schools all over North America and Scandinavia.  There were a number in this country too, which have been driven out of business over the past decade by the regulators - partly because they were non-standard, and partly because of New Labour fears that the very last people you should trust to look after children are parents.

There are survivals, like Scallywags in Tower Hamlets, and there are more starting now.  Labour's Stephen Twigg has also been backing the idea.  But it is extraordinary that the UK should be so late in developing these co-operative solutions, with their sensible combination of professional staff and parents as the day-to-day glue which holds the institutions together.

It is also extraordinary that perfectly normal mutual solutions have to be discovered in this country so laboriously, when they are used in so many other places.

Broadening out 'choice': the campaign develops

Perhaps it is too early to say (Mao tse-Tung said this about the impact of the French Revolution) but the response to my review of Barriers to Choice in public services looks good so far.

The commentators have understood that I am trying to broaden the idea of choice, so that it is not just about competition - though competition on quality certainly has a place - but covers the range of flexibilities that people really want and need in the services they use.

This is certainly how the Guardian put it this morning and I very much endorse what they say here.

The indefatigable and influential NHS blogger Roy Lilley has also drawn attention to the report.  It is somewhat immodest of me to draw attention to what he says, but he is always entertaining and certainly is here.

The government now has to consider a formal response, but I hope that - by ending the stand-off between state and private provision - I have been able to do something to bring choice into line with what people really need.  I am increasingly convinced that flexible services are not just more popular but they are potentially very much better value for money.

What really creates costs in the public services is the kind of inflexible systems that can't deal with diversity - and that needs to be an important consideration in the services of the future.  Because unfortunately, the last decade or so have left our services seriously inflexible.  This is about more than choice, but let's start with broadening out the scope of choice.

Finally tackling Amazon's tax affairs

The online retailer Amazon considered at the start whether to launch on a native American reservation in order to avoid paying sales tax.  Now, finally, and not before time, the company is being forced to pay sales tax in three hefty US states - California, Texas and Pennsylvania.

I am pretty optimistic that this is the start of a long-term trend, which is happening much slower over here - that the big corporations will be expected to pay their way.  The prospect of John Lewis being the last multinational retailer paying their fair share of tax must have struck terror into the heart of Revenue & Customs - and this must eventually filter through to the Treasury.

If some retailers are allowed to carry on avoiding reasonable taxes, then they must in the end drive out those which pay tax.

The main worry, it seems to me, is that - while successive governments have allowed the big corporations to pay as much or as little tax as they want - they have also turned a blind eye to their dominance in their respective markets.

The result was, when the furore about tax avoidance hit the UK, the only company which bothered to respond was the only one with any competitors.  Amazon and Google simply ignored the fuss.  Starbucks did not.

Neither the traditional right nor left has ever worried much about monopoly - it is a Liberal concern, about too much market power.  And while the Liberals have been excluded from government, the competition authorities quietly snoozed, allowing Tesco to build up a 30 per cent market share, letting Amazon take over the Book Depository, their only UK competitor in the book trade.

Which is all a way of saying that, now that the financial authorities are beginning to act on corporate tax, they must begin to turn their minds to cutting monopoly power.  Otherwise we will be left with a choice of whether it is going to be Google, Amazon or Tesco which pluck us and stuff us.

Broadening out the choice debate

The Barriers to Choice Review, which has dominated my life for the last six months, is finally published and there has been a  positive response from the government.  Three points about it:

First, that the bureaucratic barriers to choice are pretty powerful if you are less confident or articulate, and if you want something slightly out of the mainstream.  I have looked at ways in which we can increase people’s authority in the system, so that they feel more able to ask for what they want.

Second, the need that people have, especially disadvantaged people – not just for information, though that can be problematic too, but for face to face advice.  They get around eight minutes from the doctor, some support from the social worker doing their social care assessment, but otherwise very little.

Now I don’t believe there is any appetite, or budget, to insert a new layer of professionals into an already complex system.  So what I’ve proposed is to pilot an extension to existing schemes providing peer support from volunteers, so that they’re trained up to provide navigation support - to help people make decisions, find their way around the system, maybe just help them with the internet.

During the last six months, I have seen the ways that informal support, provided by other service users, can transform people’s experience.  I believe it has the potential to do the same for choice.

Finally, what you find when you talk to people about choice in detail is that the kind of choices they think they are getting are often not what they’re actually being offered. 

They want the choice of a consultant who won’t mind them asking lots of questions.  Or to study Spanish at A level when all that prevents them is their school’s timetabling system.  Or to go to bed later than 5 o’clock when their carer comes round.

These are basic flexibilities in the system which articulate people can get by being pushy, but which others can’t.  This is a broader agenda for choice than just competition – to give people more authority in the system at least to askif their specific needs can be accommodated. 

That’s what my recommendations are designed to achieve.  I've recommended that people don't just have the choice of hospital for their first out-patients appointment, but also the right to switch in extremis - if their consultant is unpleasant to them or their children are bullied at school.  

This is not a right they should need to exercise very much, because I hope it will so change the relationship between professionals and users that they won't need to.

There is also a case for a new cross-service Right to Request Flexible Service Delivery. In each case, the provider would not be obliged to provide it if it is impossible, but they would be obliged to explain why and that letter would have to be posted on their website.

This kind of right has a political power beyond its immediate effect. It could potentially shift power in the system and do so without expensive changes in institutional framework. But it requires some consideration across government about the best way in which it can be made effective. 

Either way, the broad choice agenda needs to embrace the kind of shared decision making between users and professionals that is required to underpin progress so far, to improve treatment and share responsibilities better between professionals and clients. 

The implication of the choice agenda – so far unrealised – is that everyone might not be treated alike, even if they have the same symptoms or problems. It implies that different options are available, and different possible outcomes, and that there needs to be a contribution from the service user to reach that decision.

That is the new direction, and we need to shift the debate about choice so that it is much broader than just about competition.  So that it also covers people’s needs for flexible, human services that can accommodate their needs effectively.

This is what I said at the launch this morning.

Barriers to choice review published tomorrow

Very quietly, and with a great deal of getting up early in the morning to catch trains, I have been carrying out an independent review for the Treasury and Cabinet Office on 'barriers to choice'.

The review emerged out of the debate inside government about whether there should be a legal right to choose, between schools, hospitals, social care providers and so on - and the realisation that there was very little information about whether people were actually using the choices they had been given.  Especially disadvantaged people.

Well, the report is now ready and will be published tomorrow.  The government will also give an initial response, and we will be publishing the polling which Ipsos Mori carried out for the review at the same time.

I can't say what we found, or what I recommended, until tomorrow.  Or provide you with a link, but the report will be up in the news section of the Cabinet Office website.  But I hope it will go some way to shifting the debate about choice, which has become embattled and stuck.

I will say more tomorrow!

(Note: this is what I wrote the following day about the review)

Low wages and monopoly power

Ferdinand Mount has a fascinating article, fascinating at least for a man known for his support for the Conservative Party, in the Evening Standard today.  He urges companies to top up low wages.

He is right, of course, that the state can't carry on subsidising low wages through the welfare system as they are currently doing.  As he so rightly points out, this is how the Speenhamland system of outdoor relief worked in the eighteenth century - except that it didn't work.

Subsidising business is rarely an effective way forward, and it is completely unsustainable for taxpayers to be asked to subsidise bad employers in this way.  That is as good a reason as any why we have a deficit.

Mount's recent books about the way in which successive governments have created a new class of mega-rich has opened up a fascinating new divide in politics, at least as interesting as demonstrators camping outside St Paul's.

He is gargling with the word 'pre-distribution' just as Ed Miliband is.  This is an idea whose time as come.

But there is a problem around his contention that the government can't regulate and that "companies have to work out a solution between their accountants and their consciences".

He is quite right that we may prefer to shop at stores that pay living wages, and shun the companies where we are already paying for them to employ people on low wages.

That works, but only as long as we have the choice.  None of that kind of pressure can work where we have allowed monopolies to grow up.  In the recent furore about tax avoidance, the three companies that really took the pressure - Google, Amazon and Starbucks - showed exactly what will happen.  Starbucks still has competitors and it caved into public pressure.  Google and Amazon don't, and they rode out the storm.

Monopoly power is the key issue, and it is a traditional Liberal issue which the Liberals and their successors have quietly ignored for too long.

There was something about 1954

What was it about 1954?  It marked the end of wartime rationing in the UK. the closure of Ellis Island and the opening of the first Burger King.  Not to mention the fall of Senator McCarthy.  And the Four Minute Mile.

None of that quite justifies the idea that it was the year of the birth of the modern world.  But I was wondering about it last night when I went to see the revival of Julian Slade's Salad Days at the Riverside Studios - which was absolutely fabulous.  There was something about 1954.

Perhaps I have inherited that feeling from my parents, who kind of emerged into the world around that time.  Salad Days was important to them, with its nervous sense of trying to find something to do after 'coming down' from university.  So was the other product of 1954, the comedy about the Brighton Vintage Car Rally, Genevieve.

The computer Evi designated 11 April 1954 as the most boring year in the twentieth century, and I wondered if that had something to do with it.  It was nine years after the end of World War II, and both Salad Days and Genevieve were about the new generation emerging who really had nothing to do with it except watch.  The very dullness of 1954 provided its charm.  Periods of international excitement don't produce summer fantasies like Salad Days.

There is some hint of the dawning new Elizabethan Age, a year after the coronation.  The generation looked ahead rather than looked back.

I was completely captivated by the production at the Riverside Studios, but it had two big differences from the 1954 original.  What might have been normal speech patterns back then seems like a cut glass accent to us now.  Not using microphones then was just the way things were in the musical theatre; to us, it feels like a new level of authenticity.

But we are post-modern these days, so we are all of us experts in reading the cultural subtitling.  I loved it, and - perhaps because I was born into that world four years later - I felt it said something about me, if only I could have read further between the lines.