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BBC TwoNewsnight
Last Updated: Monday, 7 August 2006, 13:38 GMT 14:38 UK
The fall and rise of public services
Newsnight is sending reporters across the globe to seek out "the best public services in the world". The series culminates in a debate involving the Institute for Public Policy Research (IPPR) and Policy Exhange on the future of public services in Britain. Here, Nick Pearce from the IPPR looks at the public service picture across the world.

By Nick Pearce, IPPR

Cyclists on the Hawthorn Bridge in Portland
In Portland the car is not king

Our public services were written off in the 1980s. Neo-liberals asserted triumphantly that globalisation would force the state to retreat from welfare provision in a race to cuts taxes and stay competitive.

Yet from South America to New Zealand, that fatalism has been decisively rejected. Strong public services provide an essential foundation for decent societies. But they also support dynamic economies, supporting the investments in education, R&D, and healthy populations that make businesses competitive.

In almost all OECD countries, public spending increased in the last decades of the twentieth century and governments showed no sign of losing their ability to tax companies and individuals to fund collective services.

Meanwhile, those countries with the highest levels of spending - principally in Scandinavia - enjoy strong, export-led, knowledge-intensive economic growth. It seems that with the right political choices, economic efficiency and social justice can go hand in hand.

Health and transport

Dr Ana Maria Fuentes, talks to John Harris in Jaruco

Poor countries have less clout and even fewer resources. But many maintain excellent services. Cuba has superb health and education services, as John Harris has reported for Newsnight.

Cuban doctors perform operations for people all over Latin America. Despite the fact it is one of the poorest countries in the Caribbean and under severe sanctions, Cuba has still achieved a lower infant mortality rate, under-five mortality, maternal morbidity and mortality rate, than any other country in the region.

The USA is the country where the car is king but in Portland, Oregan they are bucking the trend. Next Sayeeda Warsi, will be reporting on how a motorway was knocked down and replaced with cycles lanes.

Even in the land of the free, quality public services can persuade Americans to leave their SUVs at home and get on their bikes, hope on a tram or even car-share with their neighbours.

Education and crime

Carlsberg might not do prisons, but if they did, would they permit you to have sex with other inmates? Maybe.
Qatar might not spring to mind when you think of the best schools in the world but their state education system is starting with a blank page. James O'Shaughnessy of Policy Exchange will be reporting on how a new generation of schools have hired British teachers to deliver a new curriculum for the Emir's Supreme Council on Education.

The bilingual schools are the first in the Arabic-speaking world to teach to a national curriculum for written and spoken Arabic.

And I will be reporting from Denmark, where some of the lowest re-offending rates are in no small part down to the rehabilitation in "possibly the most liberal prison in the world".

Carlsberg might not do prisons, but if they did, would they permit you to have sex with other inmates? Maybe. But the Danish criminal justice system isn't just run by hippies - chemical castration and long-term incarceration for serious repeat offenders are all part of the mix.


Around the world, expectations of public services are constantly increasing. People naturally make comparisons with the private sector, which continues to provide increasingly tailored, professional and personal services.

Political rhetoric in favour of citizen-consumers only exacerbates this difficulty. As people become richer, they demand more from state provision.

While medical advances are expanding the range of treatments available, the cost of meeting these expectations also rises rapidly. Britain is not immune from these global trends.


Many of the fiscal pressures we face are not new but the responses available to governments around the world have become more limited.

A very stylised picture is that in the post war period until the OPEC crises in the mid 1970s, strong growth meant that the state could rely on steadily increasing revenues to fund public service expansion.

In the 1980s there was a realisation that this expansion had placed long-term pressure on state spending and there was a "retreat to the core" as states cut spending in areas where they could afford to, such as support for industry, and trimmed in areas in which they could not, such as housing, pensions, benefits and social services.

In the 1990s, there was a focus on doing things more efficiently, through public private partnerships, targets, audits, civil service restructuring and reducing "waste". But overall, although the rate of growth slowed, spending went up, not down.

Labour review

Tony Blair at a Labour Party "Lets Talk" initiative in London
Tony Blair wants to talk about public services
This legacy makes for a particularly tough set of choices facing Labour in next year's Comprehensive Spending Review.

Efficiency gains are hard to squeeze out of government departments and steep reductions have already been pencilled through the Fundamental Savings Review.

Spending on public services will need to stay high to meet expectations and promote social equity. Big investments are needed just to stand still.

Perhaps the biggest question is how far spending on health, which is both the most expensive public service and the one which has grown most rapidly in recent years, can slow down in the face of continually rising public expectations.

Well placed

Even with a tight overall budget there are some other areas where we need to make space for additional spending to create a fairer society.

The first is the provision of more affordable, high quality childcare and the other is more direct assistance for families through benefits and tax credits, if we are to get back on track towards the government's objective of halving child poverty by 2010.

Yet Britain is well placed to meet these challenges. Its mix of high employment, economic dynamism, public services funded through general taxation, and an active welfare state are strong foundations upon which to build a fairer society.

Over the next month, Newsnight will help us see how we measure up to the best public services in the world.

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