Monday, 2 June 2008

A vision of public spending in the UK: versions 1 and 2

Solution 1

The final chapter of this book thing I'm writing includes a proposal for restructuring our tax system. It then sets down a competition to design a more detailed solution, but the basic premise is something we're calling PIE ... which will one day stand for something but doesn't yet :) 

In a nut shell, when a citizen votes they would also be able to directly allocate a significant amount of tax revenue to various different buckets. There would be buckets for health care, education, defence, housing, public transport subsidy, international development ... 

The money that voters could directly distribute would be about 10% of the total tax revenue, on a rolling basis, so each bucket-department would know that they had at least 90% of the money they were allocated last time around.

Each bucket-department would have to disclose exactly what they're spending that base 90% on, and what they would spend each additional bit of cash they might get on should they be allocated it.

The impact it would have on our relationship with the government could be quite profound. Discussing it with other people, someone has suggested that in some ways it's the integration of Marxism and Consumerism. I'm no marxist scholar but it seems that Marx believed that the course of history was headed towards a flatter structure, in which us little people held the power and the state was little more than a professional system for implementing our decisions.

With PIE our government could only maintain a standing professional military if we chose to fund it. For me this is a really exciting prospect. If our leaders really felt that they wanted to take military action in the absence of a UN coalition they would have to hold a referendum to ask for the money.

Some people have said that it sounds a little outrageous ... so I'd like to describe an alternative solution.

Solution 2

Imagine we allow a handful of people to make decisions as to how the whole pot of money is divided. Make them read out some overall figures to us once or twice a year, but don't require them to detail what they propose to spend the money on within each area.

Let them allocate sufficient money to defence to allow our government to go to war without the direct support of the population as long as one or two other governments are interested in pursuing the same agenda. 

Leave the trivial stuff, you know, giving hope to deprived children, nursing people with cancer, air ambulances, equipment for people with disabilities ... leave those little luxuries to be provided for by money raised through charity game shows and reality TV phone-ins!

Hey - anyone remember You Bet! ? A genius way to fund those inessential social care programmes!  

Gary from Colchester claims he can recognise 150 models of 1970s saloon car, just from a photograph of the driver side wing mirror, in under 2 minutes! 74% of the studio audience and 2 of our celebrities believe he can do it. If Gary can pull it off then we'll give £7400 to their nominated charities - Macmillan Nurses and the NSPCC! If he can't then we'll give £2,600 to a physiotherapy center for children with cerebral palsy. Gary - are you ready?

Matthew - YOU BET I am!

Wonderful stuff. A beautiful vision of modern democracy.

The choice is yours ...

So - which is a better way to distribute around 500 billion quid? I'll tell you what - let's hold a phone-vote and 12 pence of every call will go to charity!


Random Reflections said...

As ridiculous as our current system sounds, there is a part of me that is wary of moving to the system that you suggest. Public accountability is really important, but some of the things that concern me are:

- Voters do not always make wise choices. London now has Boris Johnson as mayor. Need I say more…
- I wonder what priorities would end up looking like? Would the nation vote for a certain allocation of money to be set aside for disasters in other countries, which the current government has given money to, or would we be more insular and expect the money to spent in the UK only. A “charity begins at home” type approach.
- I think government departments already have to justify how they have spent their money – through annual reports, appearing before government committees, Public Service Agreements etc. That people aren’t generally aware possibly means that they aren’t that interested. Would this make them more interested? What would it cost in terms of people having to calculate all the expenditure figures? Would it create lots more bureaucracy meaning that instead of decisions being implemented that more time is put into justifying the expenditure?
- Would there be any relationship between turn out at elections and the ability to influence spending? Is a 40% turn out sufficient to be having this direct influence in spending? Or would people feel that there vote could have more of an impact and therefore more people would actually vote??
- Would people know what they were actually voting for? For example, if they wanted more money in healthcare, could they have the ability to say that it was to be spent on dealing with heart attacks? If not, what if the money was spent on something that they didn’t recognise as a priority or were perhaps opposed to?

This isn’t a criticism of your idea, I think it is really interesting and potentially a way to make people more involved in key decisions made about the country and their lives.

PIE – Public Investment Expectations??

Stray said...

Hi RR - don't worry - part of me is wary too!

Thanks for chipping in - it's good to hear concerns because I'll need to address these in the book anyway. So - here's a few thoughts on what you brought up ...

1) I wonder if london elected Boris Johnson because they felt it was the only way to 'punish' a labour government who seem distant and inaccessible? If they seemed less distant then perhaps it might not have happened? Maybe voters only make really bad choices when they feel they don't have a constructive way of having influence?

Incidentally, I'd have Ken for bloody prime minister right now - not that I hate Gordon, who I have a strange soft spot for because I think he's probably a bit Aspie and confused by our responses to him - but I have realised that who ever we elect next is the leader who has to sort out climate change - or not. I think Ken's green stuff may seem narrow but there's not a lot of purpose in trying to achieve house-price stability if we completely screw up the planet ...

2) I completely agree. The move to a global consciousness is really what the book is about, so it needs to be accompanied by some fairly substantial changes in our primary belonging group. I say 'need' not in an 'I know best' way, but because without a global community we have sod all chance of addressing global climate change, which will require us to directly, financially support clean power in other countries etc.

3) They do - but they don't disclose it in a very comprehensible way. I believe people aren't interested because they feel they have no influence anyway... What can you do? Write a letter to your MP? It all feels a bit meaningless at the moment. The idea that it causes more bureaucracy is a bit of an illusion I think, as the money all has to be accounted for anyway - and we're not talking about lightbulbs and pencils kind of level of break down.

4) The spending is per person rather than by proportional representation. Only people who turn up could spend their PIE - if you don't turn up then your £5000 (or whatever) is allocated just as it was the last time around. I think an increase in people voting is likely and something much needed in the UK!

5) Yes, the departments are required to state what they would spend the extra cash on. Remember that 90% (or similar) of their budget is known and fixed from the last time, and we know what they've decided to spend that on. So, if I felt that building 2 new schools in Manchester was a better way to spend my money than a new dialysis unit in Cardiff, then I would put more of my PIE in the education bucket. I don't really see that as being a negative. It would definitely lead to a change in the way interest groups lobby, but I don't think that's a bad thing.

I REALLY like your definition of PIE : Public Investment Expectations. It's exactly what we're talking about - Expectations. Thanks for that!

Random Reflections said...

I can see the points that you make and am glad that what I said was taken in the way that it was intended.

I do think there is real potential in what you suggest and given that the current government is trying to (appear to) be more responsive to the public etc then this would be a great idea for them to consider - so long as it couldn't be overly influenced by 'block voting' etc (which has suddenly reminded me of the Eurovision Song Contest!). I shall continue to ponder and look forward to seeing you develop the iea even further.

Glad you liked the definition of PIE!

Misssy M said...

I like it. it seems to make more sense to vote for things rather than people, because as we know the people say they'll do "things" and then POOF! those "things" seem to get forgotten about- this way it actually becomes a constitutional obligation.

And as we sink deeper and deeper into personality politics like the Americans, something more substantial has to be the answer.

It will require our good citizens to be a little bit more aware though...

But Why? said...

Ah, but there's the problem that voting is already difficult enough for a large number of people not to bother with it.

Is it better to have perhaps 5% of the electorate actually making some form of choice when they vote, or 60% of the electorate performing the illusion of making a choice?

How would we take the moral high ground against ruthless dictators?

But seriously, might it be more dangerous to allow the people who vote at random to allocate money?

Stray said...

Misssy Mmmm - absolutely! At the moment it appears that the only difference between the main 2 parties is their promises on how they might gather and distribute public funds, and how irritating / false / annoying / dishonest their leadership are.

The days of electing people because of their principles seem to be far behind us. *sigh*

It will indeed require the voting public to be better informed. It will require lobbyists and analysts to target the voter rather than schmooze up to our politicians and civil servants.

The main issue it would address is that all people in power are hostile towards any change which might reduce their standing as the solution to the perceived problem. We elect them because they are the solution to a problem today, and then their political lives depend upon maintaining public perception of the problem not having completely shifted, else someone else might be the solution instead.

Dr But Why? - I honestly think that it's in the interests of the alphas - who of course gain all sorts of personal privilege by having all the power - to perpetuate the notion that most people aren't capable of making a good decision about this sort of stuff.

And, mathematically, people who vote truly randomly surely cancel each other out? And people who don't vote simply maintain the status quo under this system. We wouldn't make radical decisions based on a small number of voices.

What I find particularly interesting is that we know from experience that our politicians often get this stuff wrong anyway. I'm sure there would be times when the public would get it wrong as well, but whether they would get it wrong more frequently than the bigwigs I don't know. I sort of feel like actually they wouldn't, but that's not based on anything in particular ... just a life time of experience which has taught me that education is no protection against being a self-interested wanker. Something you might possibly recognise in your line of work ... ? ;)

Böbø said...

I sort of like it, though in fairness I very much don't like Option 2.

Public finance has descended into a meazmer (sp?) of managementitis. Things are checkboxed, audited, set targets, put to tender, and blotched in ways that seem to be a chasm away from the ordinary experience of you and me, and keep a middle-management industry of people in jobs.

I must admit I'm losing heart in politics: Heath, Wilson, Callaghan, Thatcher, Major, Blair and Brown ... none have really impressed.

Perhaps being impressed is unfair. Perhaps government is just too difficult. The best that it gets is the excitement felt when the Tories were swept away, and the worst it gets is when someone like Cameron seems like a good idea.

I guess my concern for Option 1 is the Britain's Got Talent fear ... that the votes will go to the orphan cripple puppy dogs.

In a popular vote, who would vote for the problems of the unpopular? Heaven knows Mental Health, to take an example dear to us both, is a Cinderella service now. How would it slip down the rankings compared to Seal Sanctuaries?

I'd also be concerned about the volatility of the voting. Unstable funding leads to unstable staff employment, leading to exploitative working practices, such as the casualisation of many public sector employees, eg, year contracts that are expected to roll over each year, but you're never sure.

Which all kind of leaves me with Option 2 being crap and Option 1 as having issues.

See how politics is sapping my energy?

Boris said...

What a great blog. Love option 1 in principle, but can see problems as highlighted by the other readers.

One of my other concerns would be the possible proliferation of slick ad campaigns to persuade us to vote our PIE money to three legged dogs instead of protecting wildlife (eg badgers). Could we end up in a situation where the PIE money (and more)that we have at our disposal is spent on TV/media awarness campaigns?

Which brings me to the issue of how EXACTLY would my PIE money be spent if I gave it to the NHS. Would it prevent the closure of the "cottage" hospital near my home, or would it pay for a consultancy team to prepare a report on how to close it?

Your idea has merit, but I would like to see some finer detail. Hopefully you can do this (unlike our polititians).

By the way I like political blogs.


But Why? said...

Do the pot of people who truely vote randomly cancel each other out? Yes. But the effect of that depends on how you get your 10%.
Topslicing from total tax revenues before unequal distribution of the remaining 90% to various departments would give you a different impact from taking an equal amount of cash from each department. In the latter, random voting acts to re-establish the status quo, whereas in the former, the impact reduces the status quo discrepacies between departmental budgets.

Also, I think the complex sets of values that people hold would make it rather difficult for anyone to be confident in optimising their vote. I think I'd find myself staring at the voting paper for a whilse, working out that I couldn't make a vote which was 'correct' for my values, and splitting the cash between whatever departments I felt least antagonised towards at the time. And then going away and feeling dissatisfied because it was too difficult for me to make the 'right' choice.

Perhaps it would be easier if I had more sleep?

Political Umpire said...

Again, being a whiny old cynic I believe our system already operates roughly as you suggest, simply because the gvt is always throwing money at whatever it thinks will buy votes. Ie short term solutions.

"the leader who has to sort out climate change" will have to be those in China, India and the US, none of whom for historical reasons will be paying too much attention to the former colonial bigwig the UK. If we were carbon neutral tomorrow, as I understand, the Chinese alone would have made up for it, so to speak, within four years anyway.

Crack on with the space programme, we're going to need it!

Political Umpire said...

Which is not to say I didn't enjoy the posts, btw ...

Stray said...

Hello Bobo - can you really remember all those politicians? blimey you're old ;) That must make you very wise ...

The thing about this scheme is that it is partly about actual funding and also partly about reducing the sense of distance and powerlessness between the electorate and the government.

Everything you say is valid. I have faith that people would still allocate resources better than a government currently spending a billion quid a year in Iraq.

Mr Boris - fear not. I shall ensure that there is a very well funded and slick ad campaign about the dangers of over-funded lobbying campaigns ... um ...

Ms But Why? - I personally would get great satisfaction from simply allocating it to anything other than the military at the moment ... so I get your point about optimisation, but then that's part of the appeal - I think we would have a healthier political debate in this country if more people understood that the black and white views presented by the Daily Mail don't stand up in the real world ...

Pumpy - thank you darling. I combined my answer to your comments here and on the book title post over on that thread. Sort of. The bit about the government I wish I could agree with ... I think the fact that we've spent seven and a half billion quid on a war that the public probably don't support suggests otherwise ...