Can I have some more?

Do we need more choice? I ask the question because David Cameron tells us that's what we want from our public services. According to Cameron, increasing choice is one of the key principles driving his reform of the public services. In a press release published by the Telegraph yesterday, he stated,

"We will soon publish a White Paper setting out our approach to public service reform. It will put in place principles that will signal the decisive end of the old-fashioned, top-down, take-what-you're-given model of public services. And it is a vital part of our mission to dismantle Big Government and build the Big Society in its place."

In principle, the idea of opening up public services to a range of providers from the private, voluntary and public sector sounds like a good idea. Even more attractive is the idea of having a range of services controlled by local people and responsive to the particular needs of the local population. We are told that competition will inevitably create efficiencies and innovation. We are told we will be able to pick and choose from a range of options and find the one that best suits us.  

I have already discussed efficiency in the public sector and the pitfalls of locally driven services, and will inevitably return to the subjects over the coming weeks, so I thought it would be interesting to explore the idea of choice. Choice, after all, is like fresh air and Australia losing test matches, we just can't get enough, can we? Well, there is a lot of research to suggest that is not the case. Professor George Lowenstein, a professor of Economics and Psychology, has investigated the cost/benefit of expanding choice within public services and has identified three main concerns: a 'time' cost, an 'error' cost and a 'psychic' cost.  

Lowenstein argues that since time, for most people, is a scarce commodity, the more time we spend making decisions means less time spent time doing things we enjoy. If you have ever spent time researching holidays or household purchases on the internet, you will know it can be incredibly time consuming and provoke a chilly atmosphere at home. Any techno-geek husband knows, you can pay a higher price for doing the research. The solution, if you have the right connections or you can afford it, may be to get expert advice, however, choosing an expert just adds to the complexity of the overall decision. Also, as Lowenstein argues, the often conflicting opinions reflects the 'inherent difficulty of complex decisions.'

Psychologists have also noted that consumers make a number of 'errors' when confronted with choice. For instance, when confronted with an expanding range of choices, individuals will actually consider a shrinking number of them. This 'decision overload' also results in consumers resorting to ever more simplistic decision making rules, such as: choosing the most expensive, because it should give the best quality, or the cheapest, because it is the best value. Heinz baked beans or the supermarket's own 'economy' version. Ultimately, the researchers have observed that consumers avoid complex decisions altogether, in effect, accepting what they are given,

"Buyers of auto insurance in New Jersey and Pennsylvania were given a choice of whether to pay lower insurance rates in exchange for a reduced right to sue for pain and suffering.  In Pennsylvania, the default was the full right to sue, with a rebate for accepting reduced rights.  In New Jersey, the default was a limited right to sue with a surcharge to get the full rights.  In both states, about 75-80 percent of drivers took the default option." (Johnson, Hershey, Meszaros and Kunreuther 1993). 

Professor Lowenstein also highlights what he calls 'psychic costs' associated with complex decision making. In effect, he argues that people are risk averse because they are driven by a 'desire to avoid regret and self-recrimination'. Therefore, any benefits they experience from 'good' decisions will be more than outweighed by the feelings of regret for 'poor' decision. The research also indicates that individuals also experience anxiety when they are confronted with decisions but lack the appropriate 'expertise' or there is a big trade-off between the possible options. Quite simply, we are not very good at making decisions and they are not very good for our health. 

  

What does this mean for Cameron's 'Big Society'? To try and put his vision into some context, my wife and I have recently spent many hours attending open-evenings at local secondary schools trying to decide which one will be best. As any parent will tell you, which school to send your wonderful children can be a very tricky decision. We are still more than a year away, the process has been reasonably time consuming and, even in a town like Bath where the schools are all good, it has provoked a lot of thought and discussion. 

At least my wife and I have both been to school. So did you. We all have a lot of personal experience that will inform our decisions. I don't think it makes it much easier. This is a decision that can shape our child's future, it's a lot of responsibility. Now make the decision about where your child's heart operation should take place. 'Heinz or economy'? Are you equipped to make that decision?

I subscribe to a satellite broadcaster. I have got literally hundreds of different TV channels to choose from 24 hours a day, seven days a week. Has competition driven prices down? I suppose you can argue it has. Hundreds of channels for less than a pound a day is pretty remarkable compared to the old days of four channels before we had this fantastic choice. OK, they were free but think about the choice. Lots of choice - but it's all rubbish. Unfortunately, it is lots of channels showing the same repeats over and over again. Any sign of innovation? I can watch Grand Designs repeats almost eight hours a day, does that count? To get any real entertainment, which is not already available on those original four channels, I have to pay extra.

Mr Cameron, please don't give me more choice. I just want some quality. 

Sorry, I've got to go it's the Grand Designs when Kevin visits Italy where they are renovating a castle, I've only seen it twenty times. 

NHS efficiency - 

http://canthingsonlygetbetter.blogspot.com/2011/01/nhs-iii-this-time-its-another-post.html

Localism -http://canthingsonlygetbetter.blogspot.com/2011/01/conservative-reform-and-baying-mob.html

A National Disgrace

         

There are 1.6 million children living in severe poverty in this country. According to Save the Children, there are 29 local authorities across the UK where more than one in five children are living in households with half the average income – for a family of four this would be pay of less than £12,500 – £34 a day to meet all essential needs. In Tower Hamlets and Manchester, the figure is 27%. 14% of children in Wales and 13% in England are living in these conditions. 

In an interview with the BBC, Sally Copley, Save the Children's Head of UK policy, explained the level of 'material deprivation': 

"Children up and down the country are going to sleep at night in homes with no heating, without eating a proper meal and without proper school uniforms to put on in the morning." 

According to a report by Save the Children in 2008, two-thirds of these households have to borrow money to meet utility bills, 1.3 million can't afford new clothes for their children, half of the households cannot afford to provide three meals a day for their children and a million children live in houses with rotting walls or floors.  

A report last year, An Anatomy of Economic Inequality in the UK by Professor John Hills of the London School of Economics, commissioned by the Labour government, concluded that being born into a disadvantaged social class had a profound, lifelong negative impact. These inequalities accumulate over the life cycle, the report concludes. Social class has a big impact on children's school readiness at the age of three, but continues to drag children back through school and beyond. With few exceptions, the children born into poverty will get fewer qualifications, lower paid jobs, suffer more health problems and die younger than their peers. 

In 1999 Tony Blair made a commitment to end child poverty in the UK by 2020. By 2008 Labour had pulled 600,000 children out of poverty thanks to tax credits and other initiatives. Yet, despite the Government's efforts, the UK still has one of the worst records on child poverty in the EU. We are the 6th biggest economy in the world and yet we rank 21st out of 27th in Europe on this crucial indicator. 

Meanwhile, the UK's present inequality in wealth distribution, the gap between rich and poor, is at its widest point since the 1920s. Professor Hills, indicated that the richest 10% of the UK's population was over 100 times richer than the poorest 10%. Researchers analysed the total wealth accrued by households over a lifetime. The top 10%, led by higher professionals, had amassed wealth of £2.2m, including property and pension assets, by the time they drew close to retirement (aged 55-64), while the bottom 10% of households, led by routine manual workers, had amassed less than £8,000. 


In this context, the Coalition has proposed switching the focus on tackling child poverty from traditional anti-poverty measures, based on income, to improving children's life chances. However, with the material deprivation described in the report it is not hard to understand why Save the Children are adamant that income plays such a crucial role. They have called on George Osborne to announce an emergency plan to create new jobs in the poorest areas and increase financial support for low-income families. This, of course, is unlikely to happen. The Coalition have replaced Labour's pledge to 'eradicate' with proposals to 'tackle' child poverty and Osborne has promised that cutting the deficit would not increase child poverty. 

In the light of rising unemployment, rising inflation, welfare cuts and the VAT increase, it would appear to be the sort of promise Sir Humphrey in Yes Minister might have described as 'courageous'. I can think of other words. Save the Children calls it a 'national disgrace.' 

I think they are right.