Monday 29 March 2004

Speaking for the people

Tom Miers is the executive director of the Policy Institute. Today, he lays out the case for vouchers in the education and health sectors.

After telling us about an ever-so-slight movement down that road in England, we get the bad news:

Worryingly, there is no sign of the Scottish Executive following suit. We could be left with the last state-owned monopoly health and education systems in the West - a disaster for our healthcare and schooling.
Mr Myers points out that private provision of services would lead to lower costs. That in turn could enable state spending to be cut:
But this tardiness does offer Scotland an opportunity to improve what vouchers offer. For voucher schemes of the Blair kind have a very serious flaw: while they offer the benefits of competition on quality, they do not allow competition on price. The state will still have to decide how much to spend on health and education.

But even this allowance could be calculated automatically on the basis of average costs in the market. So overall public spending would fall, as providers became more efficient - or rise if they discovered new technologies to sell to their customers.

This is all very well, but we need to ask ourselves why there is no big demand for the introduction of vouchers. Surely it's because almost everyone thinks that private provision is inherently expensive and that the state must therefore run education and health services as well as paying for them. But that's not correct. When we allow for the huge sums spent on bureaucracy in state provision, it would be possible to let everyone use far superior private services at no extra cost to the taxpayer. Why aren't the Scottish Conservatives pointing this out? Are they afraid of upsetting the unionised public sector workforce? Even now, there's still more of us in the private sector. Who will speak for them?