A new social covenant

We need a new ‘social covenant’ between civil society and the state. One that empowers communities and asserts the importance of government and businesses producing public good. We also need a culture in which volunteering is seen as part of everyday life and is celebrated with greater recognition and reward.

One way of understanding our present discontents is to reflect on purpose. In the curious alchemy of personal motivation, it appears that individuals are inwardly fulfilled through achieving some goal outside themselves. The same goes for countries: what is the guiding mission of a nation and, more tactically, of its government? And in between the individual and the nation, what purposes are served by the institutions – local and national, statutory, commercial and non-profit – that host and regulate our common life?

Politics swirls about the questions of individual and national purpose. Questions of personal identity, opportunity, rights and freedoms (and freedoms curtailed), with the implicit question “what are people for – and how can we help them achieve it?”, are the stuff of debates and campaigns. So are questions of national identity and national mission: immigration, foreign policy, Brexit. What kind of country are we, and what do we want to be? What is our role post-Empire, post-EU? What is our purpose?

But questions about the purposes of our institutions get addressed less often. It wasn’t always so. Victorian parliaments spent days on end debating the charters of particular colleges, trusts and hospitals (Trollope’s greatest novel, The Warden, revolves around one such controversy).[1] The establishment and subsequent nationalisation of what we now call the public services involved deep soul-searching among local leaders about the governance, financing, and functions of individual local institutions. There was also, as Professor Colin Mayer has shown in his study of the corporation, a long debate about the purpose of businesses, especially ‘public’ companies whose ownership was shared among hundreds or thousands of people, and which fulfilled vital functions in the infrastructure of the country.[2]

In the mid- to late-20^th century these debates essentially ceased. The purpose of the welfare state is to provide for all the needs of all the people. The purpose of the modern firm is to generate profits for shareholders. These simple, sweeping ambitions have caused us to forget how complex and varied the institutional life of communities is, or should be.

They also disempower the people of the communities these institutions operate in. Public services or businesses accountable to remote masters in London (politicians and civil servants, or shareholders and executives) will struggle to adapt to the particular needs of local people no matter how much front-line workers, often local people themselves, might wish them to.

The report I recently published,[3] written at the request of the Prime Minister to “develop proposals to sustain the community spirit of the lockdown”, outlines the articles of what I call a new ‘social covenant’ between civil society and the state. The first article is the primacy of public purpose for both businesses and government. This second point may seem obvious and already in force: what else is government for but public service? Yet too often policy or public spending focuses on tightly prescribed inputs designed for a specific outcome, without reference to the wider implications, the threats and opportunities inherent in official action. As I say in the report:

“Government should legislate that the whole purpose of public spending is to deliver value for society, not just value for money for one particular budget. This ‘social value purpose’ would impose an obligation to consider the whole of government accounts when designing and awarding contracts. Contracts should then be designed to avoid cost-deferral and cost-shunting (passing an expensive problem beyond the current budget cycle, or into the budget of another arm of government), creaming and parking (‘creaming off’ the low-cost or easy cases and ‘parking’ the high-cost difficult ones), and all the other evils of public sector commissioning: evils which no provider sets out to commit, but which the incentives in the system push them into.”[4]

The culture of commissioning flows from HM Treasury. My suggestion – inspired by Pro Bono Economics and others – is that

“There should be a new focus in government on spending that builds social capital, perhaps by means of a new accounting category to measure the capital and resource spending that enables communal activity, and which has preventative or long-term fiscal benefits. The review of the Treasury Green Book announced in the March 2020 Budget, intended to rebalance infrastructure spending in favour of long-term investment outside the South East, should also review the valuation given to social infrastructure and to community investment.”[5]

As for businesses, there is a myriad of initiatives trying to bend free enterprise towards social and environmental responsibility. Policy ideas include tax relief for good business practices and reform of the Companies Act to create a new corporate form with public purpose, not just shareholder return, at the heart of directors’ responsibilities. COP26, the climate conference the UK is hosting in Glasgow next year, is a great opportunity to develop a new regulatory framework to help businesses create a better economic model.

“We need to encourage volunteering as a normal part of life, and we need a culture of support and congratulation for those that do it.”

Individuals’ personal sense of purpose, their desire to make a positive contribution and to live for a cause that is greater than themselves, is the single greatest asset our society has. At the moment that asset is both underused and exploited – most people don’t find the opportunities to get involved, and those that do are often poorly supported and quickly disillusioned. We need to encourage volunteering as a normal part of life, and we need a culture of support and congratulation for those that do it.

To this end I propose a Volunteer Passport which will help match the supply of and demand for voluntary effort. This will help organisations find people with the skills they need. It will help people to find opportunities that appeal to them; to compile a digital CV showing the work and training they have done and the qualifications they have earned; and even to earn rewards, like discounts from participating retailers, in the manner of the Young Scot card in Scotland.

A Volunteer Passport will also enable us to create a National Volunteer Reserve of people who sign up to help with future emergencies and with ongoing environmental projects like tree-planting, stream and river protection, or biodiversity monitoring.

These proposals, and the others in my report, are intended to create opportunities for people and places to take more control over their lives. They proceed from a critique of the economic and social model we have lived under since the 1990s – a combination of economic mobility and new public management. Economic mobility is the doctrine that capital and labour will move easily to the parts of the country where they can maximise their value – capital moving to the deindustrialised areas where land and labour are cheap, and labour moving to the cities where jobs can be found. In fact, neither happened on anything like the scale needed for those places and those people.

“We need to invest power and wealth in our towns and rural communities, including the social infrastructure that gives people the relational assets – skills and contacts – they need to prosper.”

New public management is the doctrine that public services are best delivered through a combination of compulsion and competition: top-down targets and protocols, plus a quasi-market of providers striving to innovate and drive down costs. The result has been more bureaucracy, a demoralised workforce, and citizens being treated like units in a spreadsheet rather than human beings with strengths and needs.

We urgently need to correct both these doctrines, which between them have drained the sense of purpose from people and places. We need to invest power and wealth in our towns and rural communities, including the social infrastructure that gives people the relational assets – skills and contacts – they need to prosper. And we need to dismantle the bureaucracies of the public sector to give individuals and communities the opportunity and the responsibility to create services that work best for them.

Creating a more local, more human, less bureaucratic, less centralised society is more easily said than done. Politically it chimes with my party’s belief in small government and big society. It involves a profound change in the way government departments and public services work, but we have seen in 2020 that profound changes are possible. I am hopeful that in this new world opening up in the era of coronavirus, a new coalition of local and national politicians, social entrepreneurs and civic leaders can build together a new social settlement for the UK.

[1] A Trollope, The Warden, 1855 tells the story of Septimus Harding, the warden at Hiram’s Hospital, an almshouse supported by a medieval charitable bequest which both supports its twelve residents and a comfortable home and standard of living for Harding.

[2] Colin Mayer’s most recent publication on this matter is Firm Commitment: Why the corporation is failing us and how to restore trust in it and was published in 2013

[3] D Kruger, Levelling Up Our Communities, September 2020

[4] D Kruger, Levelling Up Our Communities, September 2020

[5] D Kruger, Levelling Up Our Communities, September 2020