LA Talk: "Personalisation, Vouchers & the Political Economy of Welfare Reform"

My talk this evening – “Personalisation, Vouchers & the Political Economy of Welfare Reform – my experience of making Harrow Council one of Britain’s leading boroughs for extending choice and control over social care” – was well received.

I would like to thank David McDonagh for organising a great evening and some excellent Q&A from an interested and critically challenging audience; I plan to incorporate several of the comments in the next version of the paper.  The talk was also videod so, hopefully, will be able to post the link in a few days.

This is an excerpt from it; I plan to revise the paper further and submit for publication.

When many libertarians talk about reforming social welfare, their focus tends to be upon drawing distinctions between individual rights and what we should properly describe as entitlement or welfare rights, of questioning the very legitimacy of those entitlements.  But as powerful as that critique is of welfare rights, we have to recognise the fact that people have lived their lives under this structure of welfare rights; they have (mostly) in good faith orientated their life-planning to that structure.  To avoid creating a natural constituency
hostile to market reforms, we must carry people dependent upon welfare rights with us; describing a path from the present structure of entitlements to that which would anchor a free market society.

The case for significant welfare reform needs only to be briefly restated.  As Professor Jacques Garello argues, not only do “we need reform because the system is collapsing” financially as more people receive pensions than contribute to the state system, but that the welfare state undermines the “individual virtues” upon which the market depends; “people lose their sense of dignity and their liberty.”[1]

If we must reform welfare, how should we reform it?  We need to recognise the reality of political constraints, what we may wish to see happen may not be politically possible.  I believe that the personalisation of social care agenda helps to address both the financial crisis of state welfare and helps promote a restoration of individual dignity and personal responsibility, virtues that underpin a free market society, albeit within the limited extent possible under a structure of state welfare provision.

Is personalisation politically feasible?  My experience helping lead the London Borough of Harrow to become one of Britain’s pioneers of personalisation says “yes!”

Lastly, I want to draw out some of the questions, challenges and opportunities for libertarians when it comes to the personalisation agenda and the wider debate around welfare reform.

First, a definition: Many will be familiar with vouchers for education that have driven up standards through choice; “personalisation”, “self-directed support”, “direct payments” or “personal budgets” are essentially introducing a voucher system for social care.  More recently, vouchers have been argued for as a solution in the current US healthcare debate.  In his 2009 article, “Healthcare Crisis: Solved (with Vouchers)”, economist David C. Rose writes:

“Vouchers for healthcare? Absolutely. Vouchers work. We solved the hunger problem in America with vouchers in the form of food stamps. This program is efficient because it is simple, transparent, and works with, rather than against, market competition.”[2]

My view is that social care users – and the taxpayers who fund welfare – can enormously benefit from voucherising or personalising social care… and that’s why libertarians need to be making the case to the politicians.

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[1] Jacques Garello, “La réforme des retraites; pourquoi avons-nous besoin du marché,” delivered 31^st Summer University of the New Economics, 25/08/09.

[2] David C. Rose, “Healthcare crisis solved (with vouchers)”, Christian Science Monitor, 10/08/09, http://www.csmonitor.com/2009/0810/p09s01-coop.html.