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Why fairness matters when the cuts begin to bite

How should you go about a fiscal consolidation?

How should you go about a fiscal consolidation? There are intriguing lessons for Whitehall from a consolidation exercise carried out by 24 members of the public.

The Institute set out its views on fiscal consolidation, alongside the IFS, in a briefing shortly after the election.  A vital element, based on the experience of countries like Canada and Sweden, is securing a public mandate.

This is not about trying to get people out campaigning for cuts.  Rather the two parts are that the public have to accept at a basic level that action is necessary, and that the particular actions of the government are guided by an underlying sense of fairness. Where are we on establishing these elements of a successful consolidation?  The insights from a three and a half days Citizens’ Jury event in Coventry, convened by Price Waterhouse Coopers, where 24 members of the public were asked to do their own consolidation process provide an intriguing set of lessons for Whitehall. Two important headlines stand out. Firstly, people can accept the case for difficult decisions when they are engaged in a meaningful discussion about the options. Secondly, fairness was a very important concept to the jury, who had a remarkably clear idea of what fairness meant to them and how they expected to see that play out through the consolidation process. So the starting point for the consolidation had to be dealing with what they judged to be examples of current unfairness – whether it was benefits for migrants, benefit fraud, or luxuries for prisoners, they wanted to see these tackled first – even when they knew that, on their own, they would make little contribution to tackling the deficit. Next stop was waste.  The government needed to convince people it was really ruthless in weeding out inefficiency and excess throughout the public sector.  Only once those had been dealt with, the citizens were prepared to contemplate some really radical options – and accepted that they would have to make sacrifices too. Fairness came into play again. The police officer was prepared to see his overtime scaled back – but only if the fireman was also giving up some of his perks.  Those with resources already should support themselves. This applied to some very obvious policies - richer households should not get child benefit, some of the "add-ons" (think winter fuel payment) for pensioners should be limited.  But the jury also flirted with far more radical options, such as a social insurance model for the NHS. Finally it was important to keep in mind what people mean by fairness in some fairly standard debates. So the jury were keen to see benefits cut back in the abstract, but simultaneously wanted to protect those who could not help themselves – the old, the disabled – when presented with personalised cases. This opens up interesting options – simply time-limiting benefits in the abstract (think about the housing benefits changes in the budget) will not necessarily seem fair when translated into individuals' lives. It has to be part of a wider strategy that supports people to avoid a life on benefits (an issue that the jury felt strongly about – one of their biggest surprises was discovering there are 5 million people on out-of-work benefits). So 24 people can be taken through a process which leads them to accept the case for actions which look very radical and challenge conventional notions of the politically acceptable.  But the jury’s dominant message back to government at the moment was much simpler: the government is not getting its message across. The jury actually came out fairly close to the government on its approach to the consolidation, but had no idea that this was the government’s approach.  The drip feed of unconnected announcements of "cuts" (or non-cuts in the case of  school milk) gave them no idea that these are the result of a process that they would recognise as fair and sensible. If people are going to accept the scale of what is to come, government needs to listen to them and make a convincing case that starts from where the public is now.

Keywords
Budget
Publisher
Institute for Government

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