5. More than money

The debate over public spending is dominated by scarcity and focused on reduction and competition. Should we prioritise healthcare or education transport or the environment? When it comes to food, farming and countryside, competing like this just doesn’t add up. Such debates miss much of the spending and investment that is already happening, and they miss that the smart money is spent in ways that can achieve many benefits.

The issues we want to tackle

Central to recent food and farming discussions has been the future of the £3 billion a year that the UK currently spends through the Common Agricultural Policy. But this is only a small part of the resources that flow through food and farming systems and rural economies. For example, almost £10 billion is channelled through the UK’s share of the European Regional Development Fund and the European Social Fund, all of which will be put into the UK Shared Prosperity Fund, designed to reduce inequalities between communities across the UK’s four nations. Not all this money is used in rural areas but the bulk of it flows to less developed areas. Then there is the £220 billion per year that consumers spend on food, a large share of which is captured through supermarkets and food service companies.

“Subsidy needs to be regional and relevant. I’m all for supporting public goods but we can’t be judged the same as other regions.” Arable Farmer, Lincolnshire

Another illustration of the perverse consequences of fragmented systems, is the cost to water companies of mitigating the chemical burden in water; with agri-chemicals and diffuse pollution entering our water at one end of the food chain, to the pharmaceuticals needed to treat illnesses attributed to our modern lifestyles, at the other.

In our review of 1,000 recent policy proposals, government, farming and conservation groups agree that, in contrast to the payments farmers now get per hectare, the principle in future should be to pay ‘public money for public goods’. Economists define public goods as benefits that everyone can access and from which no one is excluded. The focus is on public goods because international trade rules state taxpayers can pay for those fully, without distorting markets. Definitions of public goods affected by farming include soil health, clean water and biodiversity. Recent debates have swung back and forth on whether these are the right or enough public goods from farming.

We argue we have to go further, to look beyond ‘public goods’ at what government calls ‘public value’.

‘Public Value’ is a set of ideas for better public management. Adopted last year by the Civil Service as a result of the Barber Review, the ‘public value’ framework sets out ways to align public spending for better outcomes for citizens that improve public value. We argue that public value is a better lens through which to scrutinise the overall benefit for society that governments, and others using public resources, achieve, by aligning all kinds of spending — not just subsidies, but also taxes and reliefs, procurement, regulations and more.

The public value framework identifies other transitions in the thinking about effective public management, relevant here.

• From contexts which are largely stable to complex and continuously changing
• From broadly homogenous populations to increasingly diverse communities
• From problems largely defined by professionals to being negotiated by citizens and communities
• From strategies produced by the state to co-produced by civil society
• From governance in top down hierarchies to networked and partnership processes
• From the main actors being public servants to distributed civic leadership
• From public goods to public value

But one of the problems with public value is that the inputs and outputs involved can be invisible. Policy-makers require a clearer view of the whole resource applied through food, farming and the countryside.

Why this has been so intractable

The short answer is that it is so complex. Alongside current CAP payments are: tax reliefs, for example on fuel, inheritance and food processing factories, funding for research and innovation, investments in community regeneration, Section 106 payments, tax breaks where public income is forgone, public procurement of food, timber and energy, renewable energy incentives, national and local spending on basic services such as healthcare, transport, education and housing, and local government procurement of food. Beyond CAP, procurement is one of the most significant ways that the government can positively impact food systems and rural communities.

Public value includes in its definition “all those using public resources”. This validates the growing interest from policymakers and citizens in the way that private money — from NGOs, social enterprises and businesses — works alongside taxpayer pounds to build (or indeed deplete) natural and social capital. Regulation is important here, both directly, in limiting ‘public bads’ and in its indirect effects, encouraging investment to achieve public benefits. The practical implications of this was described clearly in a recent report on the hidden costs of UK food. It estimated the total ‘hidden’ cost to the public health and to the environment at over £120 billion, equivalent to £1 for every £1 we spend. Where we choose to set the regulatory baseline affects that bill.

This was brought to life on the tour, where we saw how not regulating can lead to extra environmental and social costs passed on to civic society. In Herefordshire, for example, we saw what consolidation in the poultry sector looks like, in the form of several big new chicken sheds and processing units, built in the name of efficiency. The nearby communities argue that these have loaded costs onto them.

As well as hidden costs, focusing on public value begins to illuminate other resources, sometimes called ‘social capital’. Collaboration, trust and reciprocity are vital features of economies everywhere, but patchy public service provision, limited market access and smaller communities make them especially important and visible in rural areas. And we saw startling examples of this hidden resource being eroded.

“Aylsham Country Market is a place where people come together. Most of the market stall holders are in their 70s and no one really makes any money doing this. But we’re a big community of friends. The market helps the older people keep track of each other. They notice if someone isn’t there and can check on them.” Market Coordinator, Norfolk

Towards more comprehensive solutions

Looking at food, farming and countryside through the lens of public value, rather than simply ‘public goods’, or departmental budgets, makes a much bigger resource visible. It shifts effort away from the competition over tight budgets, towards coordinating spending and enabling collaboration and making sure all spending is aligned to enhance public value instead of, as is clearly the case, weakening and depleting it. It requires public bodies to define their goals more clearly and to engage their citizens in that process. Involvement is crucial to mapping the full public resource and to understanding what people care about, central to defining public value. Barber is clear this applies to all levels of government — as much to Westminster’s law-making and trade deals as it is to local authorities.

These can seem like difficult technocratic questions, but to develop a prosperous, more democratic countryside, we need to work towards some better methods of making the invisible rather more tractable. Our proposals here set out a starting point and takes us towards ways in which these improved tools might be put to work. Furthermore, our work in Cumbria is currently piloting some approaches.

Next Steps

Map and use all resources more effectively

At present it is almost impossible to identify, track and realign all the resources that flow through any given place. Total Place and whole place budgeting started to test this in pilots, but these tended to be largely urban areas and focussed on the big-ticket budgets like health, social care and education. Small scale experiments in mapping the ‘green money’ (money used for ecological purposes) resource flows have started to reveal some interesting patterns: for example a government report found that most spending on natural capital is largely outside of Defra and central government, and that, despite it being the primary policy driver, of the £805m of direct spend on improving natural capital assets, almost half of the money spent had no impact on natural capital (HM Treasury).

We have described the interdependencies of those bodies whose budgets are held in very different ways and with different degrees of transparency and accountability — in local government, in health commissioning groups, in environment and rural schemes and so on. A research project in pilot sites will help us understand in more detail the resource flows in a rural area, and to make the data transparent and open, as the Total Place initiative attempted for certain services.

“When I started at the school we had no production kitchen. Uptake on school meals was low. We took a loan to have a kitchen installed and trained catering staff. Having a production kitchen onsite has actually saved money, and the food is much better. Most of the students keep having school meals right through until they leave.” Headteacher, Cambridgeshire

When it comes to utilising existing resources more effectively, some of the basic tools to promote public value already exist. The Social Value Act 2013 allows people who commission public services to think about how they can also secure wider social, economic and environmental benefits. But it is being underused: one study showed that 43 percent of Clinical Commissioning Groups either had no policy on the Social Value Act, were not aware of the policy or had a policy in some incomplete stage of development. Creating a statutory duty to buy for social value would mean that schools and the NHS can use the Social Value Act as an enabling mechanism to help promote health outcomes. NHS commissioners can work with local public health and adult social care commissioners to consider how services might maximise public value.

We therefore propose strengthening a statutory duty for healthy and sustainable procurement, on local authorities and the full government estate, including the NHS. This should extend beyond food to other goods which support sustainable economies, for example driving procurement towards sustainable timber. We recognise that it can be difficult for hard-pressed procurement officers, responsible for increasingly larger areas, and believing they are keeping costs low, to do this. We argue that this duty is better rested with chief officers and this, along with our suggested ‘duty to cooperate’ (see below) will make this vital ambition happen. Preston and Nottingham,[3] beacons for sustainable procurement, offer inspiring examples of what can happen when this commitment is shared across the system.

Take decision making back to communities

The challenge of enabling more local control of decisions is especially acute in rural areas, often criss-crossed by overlapping boundaries and, in district councils or unitaries, dominated by urban centres. Our thinking here is to revitalise a sense of local control and democracy in rural areas, which can feel particularly remote from good government, by experimenting in fresh ways of making the available resources more visible and accountable. The potential impact of other new institutions — like regional banks and new mutuals — are also vital to make the supportive, responsive investments local communities need. The UK has few of the local banks which exist in other parts of continental Europe which act as engines for local economies.

The arguments for a new devolved settlement for government in England are gaining pace, underpinned by principles of subsidiarity. In addition, we want to explore and build the case for new duties and accountabilities devolved to bodies who could be much closer to their communities: to parishes and community councils. Where they work well, parishes or community councils are closest to their communities and at a scale that generally makes intuitive sense to people, but there has been little to develop their responsibilities since the Quality Parish scheme at the end of the last century. These duties could include more useful and generative tasks than those which normally fall to parishes — developing locally responsive sustainable development plans, and other ways of bringing collaboration, co-design and democratic decision-making closer to people in their communities. It might also include experiments with adapting arrangements from other countries, including parish mayors (France), drawing down powers and responsibilities from districts on subsidiarity principles (Scandinavia) or local budget setting (USA), all three of which have traditions of local rural involvement which are at risk of withering in the UK.

Meanwhile, democratic accountability must be strengthened on the new ‘middle’ layers between local and national tiers. We welcome consultations to strengthen diversity and accountability on Local Enterprise Partnerships. But we also note the suggestions that new landscape or catchment scale arrangements could take responsibility for allocating public and private money. Whilst these could mobilise and align private investment for public gains, (such as inviting housebuilders to invest in farmer-led flood management plans upstream of their new developments) they must have appropriate democratic balance and accountabilities to guard against public money being transferred to private hands, with little public value achieved. One model might be the Exmoor Partnership Fund, which makes grants available to businesses, community groups and individuals, to help the National Park Authority achieve its purposes.

Revitalised local arrangements need to be supported into being. We will explore the potential of a national network of community facilitators or ‘public entrepreneurs’, to connect communities more effectively with all the relevant institutions; identify and mobilise the resources at a local level, to help build the capacity of parish and community councils, and connect between communities to share experience, knowledge and resources.

This would have to be funded and convened, independent to local authorities, by a national body with appropriate knowledge and experience, such as ACRE or Plunkett Foundation.

Get services working together for rural areas

The silos in government, which make efficient and cost-effective policy-making so difficult for the countryside, are replicated at a local level. Collaboration and innovation is seriously compromised by a complex web of different agencies, with different boundaries, targets and priorities. We want to debate a new suite of potential duties and practices to address this.

“In some villages, a defibrillator in the car park of the village hall is the only presence of the NHS. Extending public service provision — at least in this decade — is unrealistic. I rely on infrequent and expensive buses for a 30-mile round-trip for every antenatal appointment. It seems we don’t have a plan for the poorer half of society to raise families in rural villages.” Local Resident, Derbyshire

A duty to cooperate between public bodies to align strategies and plans around community goals, in a similar way as the Localism Act set out over planning matters is most promising. This could be supported by a requirement for public services to involve local people. All too often, public sector innovation reverts to institutionalist and managerialist responses. Like workers on business boards, lay or community members on any new joint arrangements have the potential to bring a non-institutional perspective.

We think it’s time to look again at the benefits of local authorities and other bodies co-locating in towns and villages, to create hubs to integrate services. Learning from previous iterations, this has — potentially — many benefits that could meet today’s needs. It could streamline the public estate. It would make services accessible and visible to the community. In our challenged market towns, this would also have the effect of revitalising high streets. Such a debate should not be confined to conventional public service organisations: any agency or body with community interests or responsibilities could join. We imagine public services working together with SMEs, community groups and services in a collaborative and entrepreneurial way in town-based hubs.

This debate enables local communities to be more involved in creative and innovative approaches to health, welfare, work support, education and skills. ‘Community supermarkets’ could provide all the convenience people have come to expect by co-locating producers in easily accessible places. On the UK tour we’ve seen:

• community shops that provide work support for the young and retired alike
• community kitchens providing free and cheap meals, teaching cooking skills helping
• people in emergency accommodation eat well from a microwave and young families to incorporate more vegetables
• type 2 diabetes patients given vegetable bags from horticultural apprentices, funded by health services
• community gardens that have helped numerous people with mental health challenges, by signposting and simply providing healing spaces

These activities create spaces for connection as well as potential for collaboration which provide support in a dignified way and integral to participation in community life.

“There’s a big community spirit in crofting — common grazings; communally owned sheep, sheep stock clubs, lots of communal sharing of mowers, tools, equipment. This is as important for farming here as the subsidy payments.” Crofter, Skye.

We’re not simply talking here about ‘scaling up good practice’. We think sustainable local capital is borne out of creative and collaborative co-design processes on real issues that people care about. The localising turn is not new: and sometimes these ideas have been tried and found wanting. But we also know that the call for more autonomy, more control and more agency in rural communities was universally expressed where-ever we went on our tour. When people have a greater sense of control over decision making and resourcing, and with the right conditions for collaboration and creativity, it’s possible to design appropriate and context sensitive responses that work, in the rich diversity of the UK countryside.

So, it is essential that we look critically and honestly about what works, what gets in the way and what needs to be supported and amplified for sustainable change. We think local ‘system entrepreneurs’ can help people and groups to navigate institutional structures when required and to grow citizen and community-led initiatives, when institutional responses are not the answer. These all form part of the ‘preventative’ infrastructure or hidden resources that underpins social capital and marshals local action for other kinds of co-production.