14 October 2010

Cable breaks ties with party policy – the communications challenge of policy U-turns

So the Browne Report has finally arrived, and depending on what side of the fence you sit on, it’s likely to be a lot better or worse than you predicted. While a raising of the cap on fees was always likely, the possibility of unlimited fees will undoubtedly cause a few raised eyebrows also. The report will be pored over in greater detail over the coming days, and particularly after the Comprehensive Spending Review, but two issues are immediately apparent.

Firstly, the report, if implemented along the lines set out by Vince Cable, will see a genuinely fundamental shift in the funding of students, with the burden moving most sharply from government to students. In the long-term of course, unlimited fees, or significantly higher fees, are likely to result in a tiered system of higher education. This ‘marketisation’, it is hoped, will ultimately increase competition and ultimately, perhaps, drive down costs. In the meantime however, how will prospective students react to increased fees and an uncertain graduate jobs market? Although it is quite possible measures to ensure access for disadvantaged students are successful, there is no real way of knowing whether poorer students in particular will be put off entering higher education by these higher fees. Equally, Browne’s recommendations may result in a more fundamental shift in how students choose to study – could we see an explosion in part-time/stay-at-home students for example? Channel 4’s Factcheck blog has provided an interesting account of the progressiveness of Lord Browne’s recommendations, but what is of most interest is how these measures are perceived. 

This brings us neatly onto the second issue raised by the Report; how will audiences respond to recent announcements and how should the Coalition, and the Lib Dems in particular react. Vince Cable’s broad support of the Report provides himself and the party leadership with the agonising challenge of selling a policy U-turn to the electorate and to the Lib Dem party faithful. There are suggestions of the communications angle the Lib Dems will take, with Cable arguing that the party’s previous position was unfeasible as a result of the finances left by the previous Labour administration. The dangers of this approach are as obvious as its attractions. There are already signs that the electorate is growing tired of the Coalition’s insistence that irresponsible Labour spending is to blame for future spending cuts, irrespective of whether they broadly agree with the statement. If the Lib Dems are to successfully navigate this difficult period, it is vital they do not fall into an obvious mud-slinging match.

Lib Dems equally must not be constrained by an overestimation of the policy’s importance. Committing to abolish tuition feed was politically popular, but nowhere near the vote winner it was made out to be. Cable and the Lib Dem leadership must reject the urge to blame Labour and instead focus on making the economic argument relevant to middle class voters. Spelling out the cost of degrees and the size of the deficit will not be enough, messaging must discuss improved life chances and securing a higher education system that allows people’s children to compete for future jobs. Of course, cutting off the media’s creeping estimation that the Browne Report will hit middle-class families hardest will not be easy. After the child benefits fiasco at Conservative conference, the Coalition can ill afford such headlines.

Perhaps the greatest danger, but the one most within the party’s control, will be how it deals with rebellious backbenchers. A number of former heavyweights have committed to rebel and Greg Mulholland MP has already blogged on the issue. Cutting off such a rebellion is essential if the party is not to descend into opposing camps and risk appearing weak and divided.

Undoubtedly, the Lib Dems will be harmed by offering support for the Browne Report recommendations, but there is already a suggestion that the common sense of the policy has been accepted by the media, the Times already running a leader in support. If the Coalition can ride out this period of unrest and prove raised fees do not limit social mobility; it could cause more problems for the Labour party. Even with Lib Dem rebellions the Coalition should gain a small majority on a vote. In this scenario, attention would switch back to the Labour Party.

The Lib Dem’s policy of abolishment was politically popular but economically and logistically unsound. Ed Miliband’s support for a graduate tax is likely to be equally difficult to implement. Just as the Lib Dems may struggle to deflect criticism in the coming months, support of a graduate tax could similarly store problems for the Labour leadership in the future.

John Hood, Linstock Consultant
 
http://www.linstockcommunications.com/

5 October 2010

Local Authorities: Are they too big to fail?

Last week we had a positive announcement from Nick Clegg on increased borrowing freedoms for local authorities and the planned introduction of Tax Increment Financing schemes, which was broadly welcomed across local government and the private sector.
Debate at the Conservative conference has now turned to its implementation.

How much freedom will local authorities really be given? How loose will the Treasury allow its purse strings to go?

One interesting question raised at a Respublica fringe event today is what happens if a local authority borrows to much? Of course, the rhetoric from councils is that it will only ever be 'prudential' borrowing. But this can mean different things to different people and no investment is ever 100 per cent secure.

So what would happen if a local authority was allowed to borrow what it liked and left itself overstretched? Will local government then be left with the potentially painful result of its freedoms and flexibilities? Or is it too big too fail?

We need to debate these issues not just at a national level but at a local level too. There is a vital role for communication between councils, business and local people about the risks that should be taken. Otherwise they may be left to foot the bill for a debt they knew nothing about it. And we know where that has left trust in the financial services sector.


Tony Cox - Linstock Consultant
http://www.linstockcommunications.com/