Breaking out of Britain's doom loop - CPPs plans for 2024

8 January 2024

By Ben Franklin

6 minute read

Wow, the next 12 months are set to be tumultuous. In the UK, we will have a general election which the polls suggest are likely to usher in the end of 15 years of Conservative government. If accurate, a new Labour government will be facing the most challenging domestic and international environment since the end of the Cold War. Economic stagnation at home and aboard, brutal conflicts in Europe and the Middle East and rising and empowered nationalist parties across many mature democracies. Indeed, 2024 could well see Donald Trump return to the White House threatening to disrupt not just democracy at home but the military support for democracies worldwide including Ukraine and Taiwan and perhaps the NATO alliance as a whole.

Against this background, the in-tray of the next government could feel overwhelming. Domestically, many public services are on the brink – with local government, the NHS, the criminal justice system, and immigration the clearest examples where failures are manifesting themselves in bankruptcy notices, record waiting lists and huge backlogs. At the same time, the tax burden on the general public continues to rise and even assuming Jeremy Hunt’s frankly ridiculous Autumn Statement plans to cut “non-core” public spending are somehow achieved, taxes are still expected to reach a post-war high by 2028-29. This doom loop of higher taxes and worse public services will be further tested by events from abroad. The post cold war “peace dividend” of reduced defence expenditure enabling higher spending on health, education and other public services is over. An unstable and dangerous world is going to require significant outlays on our armed forces for the foreseeable future – with the current government’s stated ambition to shift spending from around 2% of GDP to 2.5%. This may need to be ratcheted up further as events evolve.

While there can be no doubt that the hand dealt to the next government will be tough, should they win the election, Labour can play a critical role in laying the foundations for a stronger UK and demonstrate how a pragmatic, progressive party can offer real solutions to improve lives. In rhetoric and early policy development, Labour is radical in its approach to the Green transition, talks with intent about going further on devolution and speaks with substance about how it can reduce insecure working practices. And it appears committed to delivering genuinely preventative public services and planning reform even if the detail needs to be worked out. These are all priority areas that CPP have been pushing on since our inception in 2018-19 – vital for the advancement of fair, inclusive growth.

With manifesto policy development rumoured to be nearly complete, the main task for think tanks this year is to support a new government to hit the ground running once in power. There is no time to waste given how dire the situation is. This means further operationalising policy ideas and exploring how they can be delivered nationally and locally in practice. In this context, CPP will be prioritising three themes in 2024 which double down on areas of focus from the last 18 months:

First, in recognition of the challenging fiscal situation facing an incoming government and the desire that higher taxes should lead to better public services, we will be exploring how we can spend smarter. As our major report in 2023 - funding fair growth - showed, taxes are going to have to rise, but we need to be proactive about how and where we target additional public spending. Are there, for instance, better ways to spend the same amount of money but deliver better national health outcomes? Are there better spending and institutional arrangements at local and city level to enable more preventative public services? These are just some of the questions we will provide answers to.

Second, to support the green transition and the growth of the digital economy we will map the supply and demand for skills across the country. Building on our open for business report from 2023, we will explore where there are opportunities to reskill and upskill local populations and where there are opportunities for further business investment. This will feed into actionable industrial policy at local and national level, through for instance, supporting a step change in Skills Improvement Plans or adding weight to Labour’s proposed Local Growth Plans and Take Back Control Bill.

Third, good work in all places is arguably the linchpin of inclusive growth, but some neighbourhoods and communities are characterised by very high unemployment and insecure work. Our own polling in 2023, showed how deeply pessimistic those living in former industrial heartlands are about the economic prospects of their areas and how they believe only a few people have good economic opportunities where they live. Ultimately, transformation requires cross cutting interventions across national, regional and local government building on much of the innovation we’ve been long exploring and delivering on the ground through our Inclusive Growth Network (IGN).

This is a good segue to finish on a more upbeat note. While Britain may feel increasingly broken, there are pockets of local and regional innovation in public policy that are starting to reap tentative rewards. Local governments may be starved of funding but some are still finding ways to support the most vulnerable into work, upskill the local population and limit the impacts of poverty and deprivation. An evaluation of IGN member Greater Manchester, found that life expectancy modestly rose during the period of devolution, more than amongst a control group of local areas – a kernel of hope for difficult times.

This is a critical juncture in UK political and economic history. Hope can only return with sustained material improvements to peoples’ lives across the country and particularly in the places that have been downtrodden for generations. Good government can be transformational – think how SureStart positively impacted the lives of many of those in areas of higher deprivation in 2000s. It must be transformational again and at scale to break free from the doom loop and build for the future rather than firefight ongoing decline. In 2024, CPP will continue to provide the vision, ideas and advice to support a renewal of good, progressive government for all people and places.