The bright side of an economic recession

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Sunny optimism about the state of the British economy isn't exactly fashionable right at the moment I'll agree. However, I do think that there really is a bright side that we should all be looking at. Think about what has been happening these last few years.

Ever since Brown took the spending brakes off the basic approach to public services has been simply to throw more money at them. We'll sort out the NHS by stuffing the staffs' mouths with gold. Again. Poverty will be cured by mass transfers of money. Education simply needed more spent on it. In short, we had the longest attempt at making "tax and spend" work yet seen and as we've also seen it simply doesn't work. Not only have those public services not improved by as much money was thrown at them we cannot afford the amount that was.

Brown's great achievement therefore was to test that tax and spend model to destruction.

Which means that future governments simply aren't going to be able to pull the same trick again. We've tried "investment in public services", we've tried "increasing resources" and as we can all see we just don't get out of this method what was claimed for it. So future governments are going to have to look at the ways in which money is spent, not the amount of it. Now, yes, of course we have views around here about what those ways should be. We do and will argue that more markets helps, that localism is a great idea, the civil society often does better than central government and so on.

But what our specific arguments are matters a great deal less than the fact that the arguments will now be taking place on the correct intellectual ground. What is the best solution to this problem? What is the best to that? How do we change the structure so as to get the best result from the limited resources we've got available?

For finally everyone can see that the important point is not how much money you spend it's how you spend that money. Which means talking about structures, bureaucracies, targets, incentives and most importantly, outcomes: in short, that we'll now be shouting at each other about the important things.

Which is, of course, to be welcomed.

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