It is encouraging to see innovative proposals for change and the recent report on the Universal Basic Services made for interesting reading. Universal Basic Services are seen as a more economical alternative to the more expensive Universal Basic Income.
Firstly I like the originality of the idea – although the first Universal Basic Service was the NHS and that’s been around almost 70 years, those among us who appreciate it have been so bludgeoned by the deceptions of the Conservatives and the Murdoch press that we think the most likely future event is that we lose the NHS entirely because it is ‘unaffordable’. So to gain some other services to add to it has great appeal.
Having read the introduction to the report I tried to imagine which services might be included: water and sewerage and a National Legal Service seemed to be good straightforward candidates.
Both of these get mentioned, but water is free only with basic social housing and legal services are presumed to be already available, which is a rather rosy view of the access to justice in the UK. The report does, however, suggest alternatives with an intriguing medley of services which it is proposed should become universal.
I’m quoting regularly from the report in order to give a flavour to readers as the ideas bear close consideration.
A core idea is that “Expanding our concept of public services and enhancing public goods that are shared by all” will be more efficient in the end and also improve social cohesion. (The latter is certainly beyond dispute.) The authors consider basic services would contribute to the “vital element of participation” and to “the functioning of our democratic political system.” This would certainly be a welcome counterweight to the untrammelled individual greed of the last few decades.
But then the report speaks opaquely of “preserving the intrinsic value of monetary reward for contribution”. By which I decipher, I think, that the authors like paid work. Maybe they do but as I have mentioned before the rich seem to have no problem with just the pay without the work, so why that should be a disaster for everyone else I’m not at all clear.
We soon move on to discover the items they propose to offer for their societal change.
The first is ‘Shelter’, where new social housing would be offered on a needs basis at a zero rent, be exempt from council tax and include a utilities allowance.
Second is ‘Food’, where a food service would be provided for the 2.2 million households, that is a (shameful) 8% of households the Food Standards agency says suffer food insecurity each year. This would provide 1.8 billion meals a year.
Third is ‘Transport’ which would be provided free on the similar basis to the OAP’s freedom pass but without time restrictions to “enable proper access to jobs, healthcare, and education.”
Fourth is ‘Information’: here the object would be to “promote digital inclusion” by covering “the cost of a basic phone, internet and BBC TV licence fee.” This is actually the most expensive service they propose.
The report then asserts that Universal Basic Services serve much the same function as UBI and acknowledges too, that payments for some personal and specific needs would still have to be made much the same as now. But even so: “Universal Basic Services provide a floor to our society by guaranteeing a minimum standard of life as a practical and observable manifestation of our common purpose.” Somewhat to my surprise, I find myself agreeing with this: there would, by comparison, still be an individual “on your own”-ness about Universal Basic Income.
When they state “The debate between Universal Basic Income (UBI) and Universal Basic Services (UBS) revolves around the best use of available funds.” we seem to be back to money again but if they substituted resources for funds I think it is an entirely reasonable statement.
They then mention what may be their secret weapon – UBS can deliver a similar outcome for less.
Their report outlines the concept of the social wage, which “is the value of a public service to an individual citizen, expressed as replacement for individual income.” Clearly there is a lot to be said for the idea that the value of a service to a user or recipient is generally greater than that which could be obtained by buying it individually – indeed this is the whole concept of a buying group. And apparently the Local Government Association with the RSA has found that delivering with “intimate local knowledge” can mean further savings of up to 14% (though I’m not sure the LGA is an entirely disinterested party)! If that all works then UBS can be pretty certain of delivering a similar outcome for less.
UBS would also “require social institutions and support the development of public service infrastructure.” A futher plus, I think.
The report goes on to propose a Basic Income supplement of £20 a week, which would be very progressive – very much so if not subject to tax, though it concludes that the tax free option is too expensive, but nonetheless worries that UBI, unlike UBS, can only improve work incentives on average if it makes some people worse off, which is, overtly, logical. But one would have thought nobody has ever done any unpaid charity work!
“There is strong evidence that individuals connection to the labour market is important not just for income but also for well-being more generally.” That is because at the moment it absolutely is – but starting what the report earlier calls an “entrepreneurial initiative” would be considerably easier on UBI. UBI could be transformational – the report worries itself and others that UBI will encourage people to loll about on the sofa.
“UBS” on the other hand “would build on the existing system of state provision of some services, and extend it …The services themselves might be provided publicly, by private companies or by the voluntary sector.” (what’s the voluntary sector’s ‘work incentive’, I wonder?)
We’re lolling on the sofa again, but clearly alone, when they contend that “UBI does little or nothing to build social capital or to reverse … social atomisation. UBS could be ‘pro-social’: publicly provided services are a visible collective good, and both providing them and consuming them is at least in part a social activity.” They continue with UBS can help “to partially equalise opportunities or capabilities to participate in society.” and “need not be inconsistent and could be complementary” to modest UBI.
And this I feel is their Unique Selling Point – it is a not a complete substitute for UBI, it is more like a selection of participatory ‘feelgood’ add-ons.
There is quite a lot of detail including where the money comes from and they show that if UBS substituted for a reduced personal allowance it would be very progressive (see chart below):
Most of this financing detail I have felt free to overlook because the report still thinks we tax and spend, but where the report manages to devise a scheme that is revenue neutral but which increases employer and employee National Insurance contributions in order to pay for transport costs, I feel compelled to remark that National Insurance is, of course, 1. not insurance at all; 2. a tax on jobs and 3. as it has an upper earnings limit, it is regressive.
The report then turns to shelter and food. Although they say that any solution will involve “ adding substantially to the housing stock through a building programme” I’ve already shown that we are not as short of houses as we think we are and although I would concede some sort of creation of extra social housing is likely to be required (particularly as they point out that 14% of all private renters pay more than half of their income on rent) this would not necessarily by any means need to be new build, but it will clearly cost money. More especially as, in addition to the cost of creating social housing, they propose a £1250 per annum allowance to social tenants including existing tenants for utilities (power, heat and water), and also that these same social housing tenants should be exempt from council tax.
Interestingly the authors calculate that the extra expense for councils for this system would see substantial savings on housing benefit and would therefore be ‘only’ £700m.
They examine a state replacement to food banks on an effective one to one basis and conclude, correctly in my view, that it does not satisfy a UBS. They therefore propose that anyone who is food insecure would be able to go somewhere to receive a hot meal. Personally, I fear this is institutionalising the soup kitchen and whilst for some it will be a reason for social contact (the elderly or infirm for example) I would like to see a different general approach and that and the report’s Transport proposals, will be the subjects of a couple of additional blogs.
There is much to chew on in this Universal Basic Service proposal – particularly when it is combined with modest UBI. I suspect the arguments really pivot on how modest the UBI is and how comprehensive are the UBS. As far as I am aware this precise concept of UBS is unique to this report, so whilst this essay has endeavoured to impart a simple summary, I do think aspects of the proposals are both original thoughts and merit some more detailed additional scrutiny in due course.