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Amendment of the law

I agree, but what will help greatly is the increase in supply that the Government are providing through the Budget. That is really important and will be one of the measures that improves the housing market. Before I make my main point about the shape of services, I want particularly to welcome the proposals to allow grandparents' care for their grandchildren to be counted towards their pension. That is a really important scheme, which will give practical help to many women who have already taken time out of work to look after their children. It also sends out important signals about support for the family and about our understanding of what people want in terms of caring for their children. I pass on my thanks for that. One of the big issues we all have to face is that, even without the recession, there were real questions about the future direction of public services and their provision. Because circumstances have changed in the years of Labour Government, people have become used to a different standard of living and different standards of service. Those questions will become more acute now that spending is tighter. As a number of Members on both sides of the House have said, we have to make sure that public spending counts and is even more effective than it has been so far. We need to look at how we provide services and think about not just how we cut, but how we reconfigure. By any measure, cutting services year on year until 2015 would probably destroy the morale of everybody who came into public service, because, by and large, they do so to make sure that public services are provided. During the lifetime of the Labour Government, people have got used to having more choice of service and more control over the type of service they receive, which is all to the good, but it has profound implications for the range of our delivery agencies. There are many tiers of local government and there are different types of quango and semi-quango and arm's length delivery agencies. We need to take a hard look at them, so that we can have not necessarily a smaller state, but certainly a flatter one without so many quangoes and hierarchies of structure. For example, I know of one town where there are two chief executives sitting across the road from one another—I suspect my colleague on the Conservative Benches, the hon. Member for Wellingborough (Mr. Bone), knows about them too. Each of those executives draws a large salary and each has a large bureaucracy serving exactly the same community. We need to give some thought about how such services are delivered in the future, while of course maintaining the democratic commitment. The one service that the public want to access most acutely is probably the health service, where public pressure for access to drugs such as Herceptin and treatments such as in vitro fertilisation has driven the provision of services, rather than the local purchasing authority. It is all to the credit of the Labour Government that people have got used to a standard of public service that is light years ahead of what they were used to—now, people complain if they have to wait two months for an operation, whereas previously they had to wait two years. Looking at the way in which a new configuration of services might work and the savings that it might produce, I refer my hon. Friend the Exchequer Secretary to the Treasury to an interesting report—I have already mentioned it to her briefly—by PricewaterhouseCoopers on bridging the fiscal gap. It considers two models: one would make cuts, but PWC finds that completely unacceptable, because it would mean a level of cuts that we had never seen in the public sector; and the other would raise taxes, combining a 2 per cent. rise in VAT, a 1 per cent. rise in all national insurance contribution rates and a £5 billion increase in green taxes, which, again, would test public patience past breaking point. The report also considers the savings that could be made by reconfiguring public services in a way that maintained front-line services but changed some back-office functions. For example, over the time scales in the Budget, there are projected savings in back-office operations and IT of £8 billion, in collaborative procurements of about £24 billion, and in properties and facilities of about £5 billion. Those figures are indicative, but they certainly posit that, if we think carefully about the services that the public want, the way they want to access them and how they are provided, in a very different world where people want more say and do not want people to purchase for them—in other words where purchasing power is with the public, not with an institution—we can maintain the quality and quantity of public services to which people have become accustomed and still make sensible savings that chime much more with the public mood than heavy tax rises or public spending cuts ever would.