Transforming Welfare: New Economics, New Labour and the New Tories: We Need a Transformation in Welfare Provision, but Even More Important Are Measures to Tackle the Underlying Causes of Inequality

By Coote, Anna; Franklin, Jane | Soundings, Spring 2010 | Go to article overview

Transforming Welfare: New Economics, New Labour and the New Tories: We Need a Transformation in Welfare Provision, but Even More Important Are Measures to Tackle the Underlying Causes of Inequality


Coote, Anna, Franklin, Jane, Soundings


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Over sixty years we have grown accustomed to benefits and services provided by the welfare state. All the while, the volume of provision has expanded exponentially, driven by a growing and ageing population, by rising public expectations, and in some cases, notably healthcare, by scientific advances and by supply driving up demand.

This expansion was possible because the economy continued to grow. Then came the collapse of global financial systems and a steep economic downturn from which 'recovery' is uncertain. Furthermore, there is persuasive evidence that continuing economic growth is undesirable, as Tim Jackson has ably demonstrated in Prosperity without Growth. Since it cannot be 'decoupled' from carbon emissions sufficiently and in time, continuing growth in the 'developed' world will make it impossible to avoid catastrophic damage to the environment. So it makes sense to plan for minimal growth or none at all.

In that case, what will become of the welfare state? As it stands it is unsustainable. Deep cuts are already planned by the Labour government and by the Tories-and neither party has yet contemplated a future without growth. What should be saved and what thrown overboard? More important, how could and should the welfare system be restructured?

As we address these questions at nef (new economics foundation), we have found our selves rubbing shoulders with New Labour and the new Tories. Trying to envisage people living together and looking after each other in the twenty-first century, we have been exploring similar territory. Is there is a grand consensus emerging? Well, no. In this essay we explore the reasons why.

The New Economics vision starts from the premise that a welfare system that's fit for the future cannot rely solely on the market economy. Instead, it must value and nurture two other economies that have so far been largely overlooked. These are the natural economy, the resources of the planet on which all human life depends, and the 'core' economy, the human resources that comprise and sustain social life. The role of the state is to get all three economies-people, planet and markets-working together for sustainable social justice.

We can see the need for growth to promote well-being and improve the quality of people's lives. But there's no potential for growth in the natural economy, nor sufficient time and technology to switch to an entirely 'weightless' market economy. The only real potential lies in the human resources of the core economy. These are embedded in the everyday lives of every individual (time, wisdom, experience, energy, knowledge, skills), and in the relationships between them (love, empathy, watchfulness, care, reciprocity, teaching and learning). These assets and relationships can flourish and expand, or weaken and decline, depending on the circumstances and conditions in which they operate.

In favourable circumstances and conditions, where power and opportunity are fairly and equitably distributed, the core economy can grow, expanding the resources we deploy collectively for helping each other and meeting our respective needs. Scarce public funds can be supplemented with abundant and un-priced human assets.

How would such an approach work? One idea is to introduce co-production into the design and delivery of services. This goes well beyond the idea of 'citizen engagement' or 'service user involvement', to foster the principle of equal partnership. Participants are no longer divided into the categories of 'providers' or 'users'. Instead, people pool different kinds of knowledge and skills, based on lived experience and professional learning, and work together to co-produce well-being. There are already many and varied examples of co-production, documented by nef and others.

Put simply, the idea is to make more and better use of people's uncommodified time and capabilities, and to reduce dependence on money for buying the means of getting things done.

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