Oliver Letwin and Danny Alexander’s quiet revolution

By Peter Hoskin
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Tax cuts, secret courts and Nigel Farages have set the political pages ablaze – but there’s a more unassuming story that could actually turn out to be more significant than any of them.

It concerns a new initiative, called the “What Works Network”, that Oliver Letwin and Danny Alexander are launching today. You can read details at the Cabinet Office website, but it’s basically a new grouping of watchdogs to sift through evidence and determine which policies actually work. To start off with, this grouping will cover four policy areas – promoting local economic growth, reducing crime, bettering the lot of disadvantaged children, and looking after the elderly – that amount to £200 billion-worth of public spending.

So far, so anodyne – but this shift towards policy-by-results is tremendously important. What it does is upend one of the worst features of the Gordon Brown years: a tendency to justify policy by the amounts of money that were spent on it. If you wanted to know whether New Labour cared about the NHS, then Team Brown would invariably cite the extra £billions that were being pumped into the service, as though that were an end in itself. This meant that other measures – such as, y’know, quality of care – were neglected. The goings-on at trusts such as Mid Staffs were tragically overlooked.    

A focus on outputs, more than inputs, may not just mean better policy, but cheaper policy, too. At the last election, the IFS noted – with caveats, admittedly – that:

“If the [Labour] Government had managed to maintain the ‘bang for each buck’ at the level it inherited in 1997, it would have been able to deliver the quantity and quality of public services it delivered in 2007 for £42.5 billion less. Alternatively, it could have improved the quality and quantity of public services by a further 16% for the same cost.”

Putting the effectiveness of policy under constant, proper review will surely help improve this “bang for each buck” ratio. Indeed, the Coalition hopes to save up to £2 billion a year from the initial efforts of the What Works Network. And that’s just the start.

This is the same philosophy that informs Iain Duncan Smith’s search for a new definition of child poverty – and it ought to be welcomed. Governments should be concerned about what actually works, rather than what sounds good in a Budget speech.