10 February 2019

Cameron’s other legacy

What? There’s a common view that David Cameron was a decent prime minister who made one terrible mistake – the European referendum

Why? History may judge him more harshly. Much of what he tried to do didn’t work

By Nicholas Timmins

  • David Cameron’s governments left a trail of changes in England that go well beyond his two most discussed legacies: austerity and Brexit
  • Reforms of health, schools and welfare have not delivered. University reforms did as promised, but are being unpicked
  • His clearest success is in the field of pensions – but even there, his legacy is mixed

David Cameron’s memoir of his time in No10 is long delayed. When it finally does appear – later this year seems to be the plan – it will be pored over most closely for the material on Brexit. He will certainly be remembered by posterity for the catastrophic failure of his European policy.

Cameron may, indeed, take a place in public life alongside Anthony Eden, a name synonymous with one foreign policy disaster: Suez. That reflects a view within Westminster that Cameron’s tenure was – Brexit aside – a tolerably successful government. But was it?

Let’s start with some positives. It was plain in 2010 that while the Conservatives had not won the election, Labour had clearly lost it. Cameron’s “big, open, and comprehensive offer” to the Liberal Democrats that produced the coalition did – to quote a phrase – provide the “strong and stable” government needed to handle the fall-out from the financial crash.

Cameron inherited an enormous fiscal deficit – believed at the time to be 11 per cent of GDP – and there was no easy way back. Dealing with it  became possible in a way that would have been immensely difficult, and perhaps impossible, had Cameron opted for a minority Tory government. So, credit there.

There is an argument among economists about the strategy pursued by Cameron and George Osborne, his chancellor. The question is about whether they were right to try to cut rapidly – or whether a slower tightening might have actually worked faster.

That macroeconomic argument, however, is well aired and it is worth looking beyond it, because you do not need to be convinced that austerity was a doomed idea to come to the conclusion that Cameron may not have been a good prime minister.

Cameron let three of his Cabinet ministers loose to run their own shows on their own theories – Andrew Lansley, Michael Gove and Iain Duncan Smith.

None did well with their independence.

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Andrew Lansley, Health Secretary, is heckled

A competitive health service?

Lansley created the government’s biggest single row with his mighty 2012 act aimed at “liberating” the NHS by running it purely on a competition and choice model. The result has been fragmentation, both nationally and locally, as raw competition alone was meant to drive up both productivity and quality.

This was not just a monumental distraction from the key challenge that the service faced – how better integrate care for the growing numbers with long-term conditions. It reduced the ability of the various parts of the NHS to do just that.

“Our biggest mistake in government,” was one Cabinet minister’s verdict within months of it becoming law. Now virtually everyone – from Theresa May to the cross-party Health Select Committee to the NHS itself – agrees that the law needs amending to get rid of features that were designed to increase competition within the service.

There is no love in the Commons for Lansley’s folly but the chances that it will legislate to change it in any immediately foreseeable future look slim, given a minority government and Brexit.

The same appraisal applies to social care – how we look after the elderly outside hospitals. Whereas the NHS was, at least, relatively shielded from austerity, Cameron’s government cut funding for social care: 400,000 fewer people now receive publicly funded social care than in 2010.

Still, the coalition did originally seek to tackle one part of the issue for the long term – legislating for the so-called Dilnot reforms. These proposed changes would cap individual liability for the cost of ageing. The principle was that people should not need burn through all of their life savings because they had the misfortune to have high-cost, long-term conditions. Instead, they would be expected to contribute a certain amount – and then the state would step in.

Having legislated for the principle, however, ministers bottled it. They postponed implementation to 2020 which, in practice, is likely to mean it has been scrapped. A green paper on social care is promised, but no-one is holding their breath that it will provide the answer. Cameron left that thread hanging.

Dan Kitwood/Getty Images

Michael Gove's fortunes dipped

Better educated?

On schools, Michael Gove was initially seen as one of the coalition’s big successes. For a century, English schools have been supported by a little tier of local government officials. Gove’s vision was to create thousands of new “academies”– schools run outside those structures.

Unlike Lansley, he stressed the continuity between his policy on academies and that of Labour. But, in practice, his continuity was  a revolution. Labour’s approach was to use academies to replace seriously failing secondary schools. If local government had failed, try something new. The academic evidence suggests that this approach broadly worked.

Gove’s ambition was to make all schools, primaries included, academies. All heads had to do to win this status – which exempted them from local authority oversight, pay rules and curriculum requirements – was ask.

It was never obvious why taking a school that was already performing well and turning it into an academy was going to lead to any sort of improvement: English school leaders have, for decades, had more control than their counterparts in most other developed countries.

But schools received big financial incentives to take part in the programme and, seeing the way the wind was blowing, thousands did. Their cash-assisted enthusiasm for the project was initially taken as proof of its effectiveness.

These days, academies are being dragooned into big chains, with a loss of parental voice. Gove created a system where, if you have a problem with your child’s school, and the governors will not listen, the only recourse is writing to the Department for Education in Whitehall, or one of its eight regional viceroys. With no real oversight, head teachers, and the bosses of the academy chains, have started giving themselves huge pay rises.

Perhaps this would be worth it if standards had been transformed in England. But Whitehall’s internal assessment is that they can find no evidence that this change has led to any improvement in school results. Officials think they wasted their time. A handful of the academy chains are brilliant. Some are worse than what existed before. Most are, at best, mediocre.

Michael Wilshaw, when Chief Inspector of Schools in 2016, warned that some of the largest chains were manifesting “the same weaknesses as the worst performing local authorities [which they replaced]” while “offering the same excuses”. Hardly a glory story there.

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Iain Duncan Smith had an impossible timetable

Welfare reformed?

And then there is Universal Credit (UC) – Iain Duncan Smith’s big idea which initially, at least in principle, had huge cross-party support.

The notion was to roll six benefits into one to create a simpler, more seamless in-and-out-of-work benefit system – and one that would ensure  even small amounts of employment paid. But for a whole series of reasons it has struggled to get off the ground and is years behind schedule.

An initially impossible timetable and a serious underestimate of the IT challenge were two important reasons for its struggles.

But the issues are bigger than that. UC was built on a poor understanding of how lives work at the bottom end of the income ladder: the unpredictability of vulnerable recipients’ working lives, for example. There were also cuts in the original generosity of the scheme. Some policy decisions – paying the benefit monthly, not weekly or fortnightly, for example – have produced a nightmare of food banks and unpaid rent for too many.

The first effect of the system that has been created is to put new claimants into debt as they wait a minimum of five weeks for the first instalment – even if that debt takes the form of an advance on UC, which then has to be repaid. And that is before the wholesale switchover of millions of people currently on tax credits takes place.

Amber Rudd, the new Work and Pensions Secretary, became the fifth in that post in the little more than two-and-a-half years since Duncan Smith (IDS) left – a revolving door that itself has done UC no favours. Rudd does appear to be trying to get it all back on track – although that track won’t now be completed until 2023, against the original target of October 2017, and it may be delayed again.

But IDS’s legacy goes well beyond UC. The roll-out of Employment and Support Allowance (ESA) – the benefit that used to be known as Incapacity Benefit in the days when social security benefits had comprehensible names that actually described what they do – hit major problems.

So, too, did the Personal Independence Payment (PIP), formerly the Disability Living Allowance. In both cases, vast backlogs of cases built up. There were repeated revisions to the harsh process of assessing claimants – a capricious system that humiliated many people.

The Public Accounts Committee described the roll-out of PIP as a “fiasco”, while Atos, the contractor for ESA’s work capability assessment, handed the contract back, complaining that it was being “vilified” for carrying out government policy.

Christopher Furlong/Getty Images

David Cameron with his coalition deputy Nick Clegg

 

Cameron’s successes

There were positives: on pensions, Cameron gets decent marks. Previous governments had left Britain’s state pension system in a mess, increasingly means-tested, as the true value of the basic state pension continued to wither away.

So the coalition pushed through the so-called Turner reforms of the 2000s – launching automatic enrolment into pensions and restoring the value of the basic pension. Auto-enrolment, to date, has been even more successful than advocates hoped: more people have started saving – even if the level at which they are saving needs to increase.

The basic state pension was rescued not just by restoring the link to earnings, as Adair Turner recommended, but by adding the so-called “triple lock”. The distinguishing part of that – that pensions will increase by a minimum of 2.5 per cent every year, even if both prices and earnings are rising more slowly – will one day have to go. It creates a ratchet that will raise the pension over time. But the achievement on pensions was a real one, even if it is not widely sung. It allowed the retired a minimum of dignity, with workers encouraged to save.

There were some mis-steps: Cameron and Osborne’s decisions also created the “Waspi” — a group of women who have been hit hard financially by the way Osborne accelerated a previously planned rise in their state pension age to 65. Towards the end of his tenure, Osborne also removed the need to buy an annuity with pension pots. You could just take the money, subject to some tax rules. That decision is producing a mis-selling scandal, as the con men move in.

Finally, as another key item in the defence, public satisfaction with public services has held up pretty well. Public satisfaction is not always easy to measure with subtlety. It often runs with a time lag, regardless of whether services are improving or declining by other measures. But while it is down a bit in most areas, public satisfaction from those who receive services is rarely spectacularly down. Even in local government there has only been a smallish drop in satisfaction with such basic services such as rubbish removal and libraries, despite the massive cuts to local authority spending (although satisfaction with road maintenance has recently taken a dive).

Stefan Rousseau/Getty Images

Lucky man? At the G8, Lough Erne, Northern Ireland, 2013

What’s left?

It may be a measure of Cameron’s legacy as a reformer that so much effort is now being put into addressing it. Here we must return to austerity.

These public service reforms did all play out against the need to cut the deficit and there clearly have been some efficiency and productivity gains in parts of the public sector.

But the deficit came down far more slowly than was intended. As a consequence, the spending taps were not able to be turned on again –and the strains are becoming ever plainer in the public services.

The NHS budget was far more protected than most, but it did not get enough money to match the rising tide of patient demand. It coped remarkably well until 2014, after which both waiting times and finances went seriously awry, and remain so.

Schools are now in financial trouble. And a glance at the Institute for Government’s Performance Tracker for public services more generally shows a similar picture elsewhere.

Prison safety also declined sharply, starting in 2013-14. The frequency of assaults on other prisoners and on staff has roughly tripled since 2009-10. Prisoner self-harm, which initially fell under the coalition, started rising (again in 2014, towards the end of Cameron’s time) and is now 88 per cent higher than it was. There are also growing worries about other parts of the criminal justice system, including victim satisfaction with the police.

Universities are an unusual case for Cameron: his higher education reforms appear to have done as was promised. The headline change was that annual fees rose from £3,250 per year to over £9,000 for undergraduates. Universities are well funded and, thanks to the student loan system, poor students have not been dissuaded from studying – although, given the dip in the number of 18-year-olds in the UK population, it is clear some universities have used their largesse to over-expand.

But the political will to support a system that costs so much – both to students in debts and to the Treasury in vast, unpaid student loan tabs – means it is unlikely to survive the next few years. On its current path, the state is expected to have accumulated the equivalent of 19 per cent of GDP in outstanding student loans by the mid-2040s. Even when Cameron’s major reforms worked, they may not prove enduring.

A review that will propose partially rolling back these changes is expected imminently.

Given the scale of the spending cuts – and there would have been big cuts whoever won the 2010 election – some decline in performance was inevitable. But in health, in schools, and in parts of social security, policy decisions by the Cameron government made things worse.

There is clearly a balance to be struck when assessing the credits and debits of the Cameron governments.

Cameron will provide his own reading of the ledger. But is the Brexit referendum, with all the division that has followed it, his only error? Hardly. It is rather unfair on Anthony Eden that he is really only associated with the catastrophe at Suez. If David Cameron is only remembered for one big mistake, he should count himself lucky.

Nicholas Timmins was the public policy editor of the Financial Times from 1996 to 2011, and is a senior fellow at the Institute for Government and the King’s Fund. He is the author of “The Five Giants: A Biography of the Welfare State:

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