Ignited by the world economic crisis of the 1970s, the debate about the future of the welfare state has now been raging for some 25 years. Yet, the heartland programmes of the welfare state - notably, the NHS and the systems of old-age pensions - have survived. Far from re-drawing the boundaries of the state's responsibilities in order to limit them, successive governments have expanded them: witness the continued rise in public expenditure. Institutions have changed less than ideology. The rhetoric of radical change - espoused in different ways by prime ministers Margaret Thatcher and Tony Blair - has, in practice, been moderated by political caution: a conclusion to which Labour's former welfare reform minister Frank Field can bear witness. The welfare state creates a powerful constituency - the beneficiaries of the status quo - for its own survival.
There is therefore a puzzle. Should we extrapolate the experience of the past 25 years into the future and conclude that, despite the recurring talk of crisis and demands for a fundamental rethink of institutions, change will continue to be incremental and marginal? Or should we expect that a rapidly changing environment and the emergence of a new consensus about the role of the state will, over the next decade or so, lead to the much postponed, often prophesied revolution in policy?
This book, a collection of essays reviewing past policy developments and discussing future options, does not provide an answer to these questions. No one, probably, can. But it does help to illuminate the issues. In particular, it underlines the extent to which the assumptions that shaped the welfare state, as well as our ways of thinking about social policy, have changed. Maintaining competitiveness in an increasingly open global economy has displaced maintaining employment as the main aim of policy. New issues (and demands) have been put on the policy agenda as a result of the emergence of the feminist critique of the welfare state. Membership of the European Union both constrains policy options and introduces a new set of policy influences.
One barometer of change is the policy stance adopted by the Labour government. The 'Third Way' remains an elusive concept: it is far from clear that it represents a coherent strategy as distinct from an eclectic mix of ideas, from which ministers pick and choose according to political expedience. However, some of the main elements of the minestrone are clear enough. The emphasis is on responsibilities as well as rights and on seeing welfare in terms of improving access to work rather than to benefits, on creating opportunities rather than redistributing income. The provider state, in line with the theme of policy in the Conservative years, is being replaced by the regulatory state; the redistributive state is being replaced by the investment state.
If some of the main themes of the 'Third Way' are clear, there are, nevertheless, enough inconsistencies to make prediction difficult. For example, one of the inconsistencies, evident in Labour's plans for the NHS, is the contradiction between the language of communitarianism and the insistence on strengthening the power of central government. But it is difficult to fault the conclusion of the editors that one likely scenario for the future is a continued trend towards stressing individual responsibility and controlling costs, transferring welfare provision increasingly to individual citizens, and giving priority to economic competitiveness and a flexible labour market. This, in the view of the editors, is likely to mark out 'a bleak welfare future'. But, they point out, there is an alternative welfare future, sketched out by some of the contributors to the volume. This is to move towards a more fragmented welfare system, resting on provision by voluntary or communal groups, but underpinned by the guarantee of a basic income for all citizens by the state. It is an enticing vision: it would, for example, eliminate the need for extensive means testing. But it would be more convincing if those putting it forward had discussed the implications for tax levels (and income redistribution) of moving in this direction.
As with all multi-authored collections, the quality of the individual contributions inevitably varies. The analyses of intellectual trends tend to offer more insights than the reviews of past policy developments. Overall, though, the book provides a clear guide to the issues raised in a debate that looks set to continue for another quarter century.
Emeritus professor and senior associate, King's Fund.