The Year, 2024
As 2024 draws to a close, we at Reform Towers have an early Christmas gift… ‘The Year’.
We started the year anticipating an election, we got one, but a good few months earlier than expected. As several people have said, you’re supposed to surprise the Opposition, not your own side. The Summer campaign was characterised by Conservative ineptitude (D-Day gate was the biggest of several mistakes), Labour message discipline (we remained the none the wiser on what they would actually *do* in office) and Lib Dem stunts (well, that’s self-explanatory). Labour won a landslide, on just a third of the vote.
The new Government took office and, over the course of a 117 day pre-Budget vacuum, we had freebies-gate and Gray-gate, Winter Fuel Allowance cuts, and the launch of a whole host of reviews (also see below). It was a harsh welcome to governing. The Budget, with its tax-raising centrepiece, has not landed in the way the new Chancellor may have hoped. And tractors in the streets, regardless of the rights and wrongs of the IHT change itself, is bad politics. The PM’s personal ratings are, according to Ipsos, the worst they have recorded of any PM after 5 months.
But it’s early days, and the challenges the new Government inherited are huge: an NHS in collapse, prisons bursting, economic inactivity soaring, growth flatlining, public debt at eye-watering levels, and geopolitical turmoil. These are long-term issues requiring bold, long-term plans.
In the dying days of this year we have had some positive news, civil service reform is back on the agenda, devolution is being pushed further, and planning reform is being prioritised.
Below is our take on the good and bad of 2024, and we’ve crowned our Reformer and Reactionary of the year. We've also given you our best quotes and top stats.
At Re:State, we’ve had a big 2024, with 24 reports produced, 81 blogs penned (see our blog wrap-up), and 45 events held (despite the election hiatus!). We’ll be back for an even bigger 2025.
💬 QUOTES OF THE YEAR
"I don't think there's a swamp to be drained here. But I do think too many people in Whitehall are comfortable in the tepid bath of managed declined"
Rt Hon Sir Keir Starmer, Prime Minister, Plan for Change speech, 5 December
"Devolution will no longer be agreed at the whim of a Minister in Whitehall, but embedded as a default into our country's constitution"
The English Devolution White Paper, 16 December
"Although I have worked in the NHS for more than 30 years, I have been shocked by what I have found"
Baron Darzi of Denham, summary letter of Independent Report to the Secretary of State for Health and Social Care
"Labour will not increase taxes on working people, which is why we will not increase National Insurance, the basic, higher or additional rates of Income Tax, or VAT"
Labour Party Manifesto
"My message to creative thinkers is this is your chance to serve your country. Use your brainpower and tech talents to fix some of the biggest problems we face today. Britain needs you."
Rt Hon Pat McFadden, Chancellor of the Duchy of Lancaster, speech on reforming the public sector
🔢 THE YEAR IN NUMBERS
411 — seats on 33.7% of the vote, giving Labour a 165 seat majority
6% — the proportion of line managers who somewhat or strongly agreed with the statement that “the civil service in general manages poor performance well”, in our joint survey with CSW
24% — the overall satisfaction with the NHS, the lowest since records began
£13.8bn — the total cost to eradicate backlog maintenance in the NHS
£54bn — the expected spending on incapacity and disability benefits this year, more than the Ministry of Defence budget
10% — the proportion of councils that provided auditing information for the Whole of Government Accounts, meaning they could not be signed off
1,000 — the number of push ups former Cabinet Secretary Gus O'Donnell did for a charity fundraiser in March
🏆 REFORMER OF THE YEAR
Rt Hon Angela Rayner MP
The Deputy Prime Minister seems determined to sustain and build upon the radicalism of Michael Gove, and in some areas to deliver where the last Government only aspired. A “devolution revolution” promises more powers and greater financial autonomy for a growing number of Combined Authorities — or Strategic Authorities now? For the first time in a long time, full-blown reorganisation of councils is being made a priority. Significant changes are on the cards for the leasehold system, renters’ rights, and the ‘right to buy’ policy, and promising reforms are being made to the National Planning Policy Framework. We may not agree with every policy in the list, but you’d be hard-pressed to name a busier or more reform-minded member of the Cabinet.
🏆 REACTIONARY OF THE YEAR
Rt Hon Bridget Philipson MP
The Government’s manifesto claimed they would “break down the barriers to opportunity” through an education programme focused on social mobility. In practice, their policies are likely to have the opposite effect. Watering down the clarity of Ofsted judgements, reversing the decision to phase out low-value courses, and reviewing the curriculum with a view to focusing more on skills are all steps in the wrong direction, and are unsupported by the evidence on improving social mobility through education.
👍 GOOD FOR
External political appointments
Reform has repeatedly made the case for deepening expertise and support via political appointments. The PM has used appointments to the Lords to do just that: Lord Vallance is science minister, a deep expert in the life sciences, Baroness Gustafson is investment minister, founder of the cybersecurity company Darktrace, and Lord Timpson is prisons minister, a businessman who has led the way on tackling reoffending through skills and employment. And experienced figures like Alan Milburn and Jonathan Powell have been hired into advisory roles (as a DHSC NED and National Security Adviser respectively).
Extending single settlements
The new Government is implementing their predecessor’s promise of single settlements for Greater Manchester and West Midlands, and extending them to the North East, South Yorkshire, West Yorkshire and the Liverpool City Region. This is key to achieving their promised “devolution revolution”, though only if the regions have autonomy over how it’s spent. This would then enable mayors to take a whole-systems approach to public services in their regions, something Reform has consistently called for, e.g. in ‘Devolve by default’ and ‘What powers where’.
Fiscal rule change
The Chancellor used her first Budget in October to update the Treasury’s fiscal rules, with a new “stability rule” and “investment rule”. The stability rule means day-to-day spending must meet tax revenues by 2029-30, and from then on a three-year rolling basis. And the investment rule requires the Government to reduce net financial debt as a proportion of GDP — debt redefined as Public Sector Net Financial Liabilities (PSNFL) which offsets debt owed with the expected returns from financial assets. Together, these offer more flexibility for the Government to borrow to invest and drive growth.
Test and learn
Earlier this month, Pat McFadden, Chancellor of the Duchy of Lancaster, gave a speech on rewiring Whitehall, which emphasised the importance of setting a clear outcome while still creating space for genuine experimentation. This “test and learn” approach — common, McFadden told us, in tech start-ups, but not Whitehall — will first be trialled for family support and temporary accommodation, and led by teams of policy officials, digital and data experts, and frontline staff. Our work on mission government made clear that being prescriptive about how missions based around innovation are delivered is counterproductive. It’s good to see government applying this principle to public service delivery.
NHS capital
This year it’s been good to see a cross-party consensus on the urgent need for NHS capital investment. In the Spring Budget, the Conservative government pledged £3.4 billion for long-term capital investment to modernise outdated systems and to help accelerate emerging technologies. And in the more recent Autumn Budget, the new Labour Government followed suit and allocated capital for new surgical hubs, scanners and technological infrastructure. Long-term capital investment is necessary to reduce the elective backlog and increase NHS productivity; but, as we (and now the Health Secretary and PM) have long said, investment must be accompanied by genuine reform.
👎BAD FOR
Reviewitis
The Labour Party manifesto promised to review 14 different areas of policy. And now in Government, they have commissioned nearly 5 times that number: 67 different reviews, taskforces and consultations are underway. Such activities can be important, and allow for experience and expertise outside of government to be brought in. But they can also delay action and are meaningless if not acted on. The Darzi Review accurately describe the acute issues in health and social care, but we knew the problems, and we’re yet to hear what fundamental reform the Government will now be implementing. It remains to be seen whether the multitude of reviews will catalyse reform, or whether they might just prolong delay and indecision.
Employer NI
Despite claims to the contrary, the Chancellor knew the dire state of the public finances long before she entered No.11, but still opted for a triple tax lock on the main revenue raising taxes. As we quote above, the Labour Manifesto committed not to raise National Insurance. The Government attempted a fudge in their first Budget, and increased the cost of Employers National Insurance in two ways: hiking the rate and lowering the threshold. The OBR were clear, that’s a tax on “working people”, with £10 billion of the expected revenue lost in later years of the Parliament to lower wages and fewer hours. It’s a drag on growth and household disposable income. Just this week we learnt that businesses are cutting workers at the fastest rate since 2009.
Fictional departmental budgets
It’s not been a good year for realism about the public finances. In January, Richard Hughes, Chair of the OBR, described spending plans set by the then Government for beyond 2025 as “worse than fiction”. One of the first acts of the new Government was to publish an audit of forecast overspends, accompanied by an OBR letter confirming £9.5 billion in spending pressures which hadn’t been shared by the Treasury. And in the Autumn Budget, despite the new Chancellor promising greater realism about departmental budgets than the previous Government, Reform’s analysis (as well as analysis by our friends at the IFS and Res Foundation) questioned whether implied spending cuts across departments (e.g. to the Home Office of 3.6% in real terms) could realistically and sustainably be delivered given demand pressures.
Investing in the thing you say you want to reduce
The new Government’s health mission is centred around three major shifts: from “sickness to prevention”, “analogue to digital”, and “hospital to community”. But actions speak louder than words. The vast bulk of extra spending injected into the health and care services (some £22bn over two years) is directed into secondary care and, more specifically, into hospitals. Yet again, social care and primary care are being overlooked. Tight fiscal constraints force tough decisions to be made, but at Reform we are disappointed to see another government overlook the desperate need to shift funding in order to actually shift care out of hospitals.