Showing posts with label democracy. Show all posts
Showing posts with label democracy. Show all posts

Wednesday, 6 February 2013

We need a Parliament for Health

We need to look at how our democracy deals with health issues in response to the Francis Report into the terrible failures of care at Mid-Staffordshire  Hospital. This blog looks are why we need a 'Parliament for Health'; the next blog looks at what it would do and how it would work
The Francis Report, Ann Clwyd’s shocking description of her husband’s death “like a battery hen” in Cardiff’s University Hospital and the “hundreds and hundreds” who have writtento her are just the latest horror stories about failures in our health services. While every day thousands of patients get wonderful care and 90% are satisfied with their experience, too many people have a bad or even terminal experience through mal-treatment, neglect or hospital acquired infections. 
But our problems in health are much wider than issues of leadership, management and organisational culture of the NHS. How services are run is just the most visible part of health care, which includes the way we look after our own health, how we care for each other and the health effects of work as well as the food, drink and tobacco industries. Each of these present problems which cost many more lives and misery than mis-management at Mid-Staffordshire. The direct cost of health services are also a critical issue. Direct cost through taxes is about £1,700 per person per year, £106bn, and indirect cost of ill-health are about £100bn a year or another £1,600 each. Add to that the soaring cost of personal care, the lack of support for carers and the value provided by six million unpaid carers (variously valued at £23bn to £119bn, and we have a very complex picture for the state of health.
Many urgent issues need to be dealt with in our health services, some of which are strategic and many of which are local, in an area or institution. But it is decisions on strategic issues which create the framework for the whole system and set the conditions which allow tragedies like Staffordshire and Cardiff’s University Hospital to occur. These strategic decisions are political, about the priorities, structure and funding for every aspect of health, including the balance between prevention and cure, between personal and collective responsibility, or between environmental and medical factors.
Health is one of many areas where our political system has failed for decades and Governments have kept people powerless to do much about it, as the experience of whistle blowers in the health service shows. Our centrally run health service gives Ministers the illusion of control, so we have had decades of ‘start-stop and start again’ health reforms which make it very difficult for people themselves to take part in creating better provision for health.
Since 1974 successive Governments have grappled with the complexity of preventative health, primary care, hospitals, nursing, social care, mental health, medical effectiveness, an aging population, rising costs and a myriad issues that affect our well-being. The NHS has been almost continuously reorganised in pursuit of better patient care, greater clinical leadership, devolved responsibility and less bureaucracy. The objectives have been largely consistent, but successive Governments have taken us on an expensive rollercoaster, plunging and twisting through GP Fundholding, Care in the Community, Family Practitioner Committees, Primary Care Groups, Primary Care Trusts (PCTs) and now Clinical Commissioning Groups (CCGs). While some interest groups (GPs, consultants, dentists) have done well out of this mystery tour, many others have not, the public is losing out, and the cost is enormous.
The Francis Report will be added to the shelf of recommendations and another transitory Government will give the NHS another shake. Some improvements may occur, if we're lucky, but wider problems will persist and some will get worse because political attention and resource is elsewhere: when you turn the spotlight on one problem, the rest are left in the dark. Some things may get better due to lack of interference, while others get worse through neglect.
Most battles over health reform are among politicians and the professionals. The public is rarely involved in difficult debates about how to balance priorities between prevention, primary care, social care, hospitals or our £9 billion annual drugs bill £8.81bn in 2011, except when mobilised to fight over a particular hospital, treatment or reorganisation.  
Whatever the rhetoric, the public only has a token voice in how we look after health as a society and how services are provided. Formal participation has been channelled through a succession of weak bodies, from Community Health Councils (1974-2003), Patient Forums (2004-8), LINks (Local Health Involvement Networks, 2008-2012) and from October 2012 HealthWatch. There is a tiny amount public participation through representation on health trusts, and more active involvement through fundraising, self-help groups, volunteering and charitable provision such as hospices, but these are largely excluded from decision-making. In many areas the voluntary sector, PCTs or local councils have set up forums for health and social care, which can comment on decisions but are powerless.
The 1974 NHS reorganisation also created joint consultative committees (JCCs) to promote joint planning between health and local authorities, but they did not have the power to be effective. Now the Government is setting up local Health and Well-Being Boards which will face similar challenges with even greater financial pressures than those which undermined the JCCs in 1974 (see Health and wellbeing boards: system leaders or talking shops?).
When the Coalition Government ran into political difficulty over its health service reforms, it set up the NHS Future Forum, a group of health experts led by GP Professor Steve Field, but barely two or three of its 55 members represented patients or the public.  It listened to more than 11,000 people face to face at over 300 events as well as engaging with people online, but then public involvement stopped. Then it is set up the Nursing and Care Quality Forum for another burst of consultation. 
But neither Government nor Parliament have the time or capacity to give health matters the sustained scrutiny they need, or to develop the political framework which balances all the different issues and interests involved in health and well-being. What we need, therefore, is a “Parliament for Health” to grapple with the political issues in public. A Parliament for Health could have directly elected representatives (MHPs) or indirectly elected from local Health and Well-Being Boards and other stakeholder groups, with a majority of from civil society, to ensure that the people are in charge of the professionals, as it should be in a democracy.
If the NHS were a country, its £106bn budget  would make it the 55th largestcountry in the world, about the size of New Zealand, Hungary or Vietnam in terms of GDP. It would have a seat at the UN – and it has one in the World Health Organisation, WHO, and its civil service, the NHS Commissioning Board, Monitor and other bodies, would be answerable to citizens through Parliament.  
If all health-related policy and legislation had been systematically scrutinised by “Health Parliament”, with a majority of representatives from patients and the public, feeding into the democratic processes of Parliament, Governments would not have been able to lurch from one reorganisation to another. Sustained public dialogue between interest groups involved in health, including the public, is more likely to have created better patient care, greater clinical leadership, devolved responsibility, less bureaucracy and greater emphasis on public health, health promotion and well-being. Problems like those at Staffordshire, Cardiff’s University Hospital, Alder Hey, the Bristol Royal Infirmary, Great Ormond Street and elsewhwereare much more likely to have been raised by “Health MPs”, listened to and dealt with than the regulators who have clearly failed.
We do not need more inspectors – the most likely response to the Francis Report. David Cameron's proposal for a chief health inspector may be a useful lightning conductor for failings in future, but what will make most difference are the hundreds of thousands of inspectors who go into the NHS every day -  patients, their families and frontline staff. They are also the people who will make most difference to the health of the nation, in homes, workplaces, shops and streets as much as in doctors surgeries and hospital wards. We are the people who determine what happens to our health, and we need more democratic accountability from bottom to top to make sure that health services and support meet people's needs with care.

[For more details of how a ‘Parliament for Health’ might work and contibute to democracy, see discussion paper on Citizen’s Policy Forums, at http://www.democracymatters.org.uk/wp-content/uploads/2012/12/Citizens-Policy-Forums-v12-5.pdf

Tuesday, 1 February 2011

Lessons from the financial crisis: Understanding Money (1)

Perhaps the biggest task in practical political education is to understand how the financial system works and help bring it under democratic control. Two opportunities to make the case for democratic reform of banking are the Independent Commission on Banking and the UK budget on 23 March: both urgently need to hear from victims of the financial crash and the millions excluded from the banking system whose services and opportunities have been shrunk as a result. Educators have a responsibility to help people understand the system and take part in making it work better.

The 2008 financial crash has already cost vast amounts in lost output, jobs, wealth, public services and personal misery. In the US “Nearly $11tn in household wealth has vanished ... The collateral damage of this crisis has been real people and real communities. The impacts of this crisis are likely to be felt for a generation" according to the official US Financial Crisis Inquiry Commissions (FCIC). Western governments pledged a mind-boggling $11 trillion of public funds to support the banks in their hour of need according to the IMF. Although only some of this was spent, everyone will pay for the bankers' failures. The Governor of the Bank of England said on 25 Jan that living standards will be cut as “the inevitable price to pay for the financial crisis and subsequent rebalancing of the world and UK economies.” Inevitably, the poorest and least powerful are hardest hit, while bankers reap staggering bonuses.
The crisis was entirely avoidable, and yet economic crises will happen again and again until society learns how to manage the financial system better.
Big cities like London suffered repeatedly from cholera and other epidemics in which thousands died until the city authorities understood the source of disease and designed systems for water and sewerage that worked for all citizens. Diseases are part of nature, but epidemics are the result of human actions and therefore preventable by designing healthy systems.
Make no mistake, “this crisis was the result of actions, decisions, and arguments by those in the financial sector. The system that failed so miserably didn’t just happen. It was created. ... Those who played a role in creating the system and in managing it ... must be held accountable.” (Joseph Stglitz, in Freefall, Free Markets, and the Sinking of the World Economy,  Penguin 2010) See Stiglitz speak on Fora TV.  In Fool’s Gold (Abacus, 2010), Financial Times journalists Gillian Tett tells the dramatic story of “how an entire financial system went wrong, as a result of flawed incentives within banks and investment funds, as well as the ratings agencies; warped regulatory structures; and a lack of oversight.”
Oversight and regulation are public duties which dramatically failed the public. Citizens cannot assume that politicians, officials or regulators can repair the system while bankers invest millions in lobbying to protect their interests. Western politicians are hypnotised by the “chunky tax tax revenues” which banks extract from the public (£61bn in 2008-09) without questioning how the money was obtained.
The central problem is not technical but ethical. Gillian Tett concludes that “the financial world’s lack of interest in wider social matters cuts to the very heart of what has gone wrong.” (p298) Without an ethical compass or social conscience, financial regulation alone cannot work. Regulations put in place after the 1929 financial crash and great depression were bypassed and stripped away to make 2008 possible. The world is awash with ‘dark money’, shadow markets, tax havens and the spoils of corruption, contraband and counterfeiting. Some of the world’s largest industries (eg drugs) flourish despite being utterly illegal and hounded across the world by governments with massive enforcement budgets.
Democratic rules and oversight are necessary, but we must start by inculcating moral principles and practices in every banker, financial institution and regulator. At very least, everyone who works in finance should swear a Hippocratic oath, an oath with the moral force of the Universal Declaration of Human Rights and the enforcement powers of the World Trade Organisation, International Monetary Fund and Bank of International Settlements combined.
Finance has an essential and useful role in the economy, but if the system is not brought under effective democratic oversight it could be swept away, like regimes in Egypt, Tunisia or Eastern Europe.
To hold these powerful institutions to account, we need to understand how the system works. Over the coming weeks I will explore key questions for democratic accountability of money and suggest some reading. The challenge for educators is to distil complex material into questions and information in a form that enables more people to discuss, understand and influence public policy on finance: please let me know if you can recommend any courses, books, videos, websites or other materials. 

A short course in money: (1) where it comes from
Money is a simple but powerful tool for economic self-management. It can give people information about the relative economic value of different activities, goods and services, which makes decisions easier and can reward activities which increase value. Value in this case simply means anything that people are willing to pay for, whether it is church services, food, football, heroin or slaves. Money that is not needed right away can be pooled to pay for bigger things like cathedrals, homes, factories, schools and spaceships.
Somehow society has to decide how this powerful mechanism should be used – what can people legitimately buy (alcohol but not cannabis, servants but not slaves), what public goods people value (monuments, roads, sewers, wars), how to pay for them (subscription, fees, insurance, taxes, conscription etc), how to look after people with no money or earning power (infants, the infirm) and how much power should different groups and individuals be allowed to exercise. All societies make these decisions, whether consciously or not. In a democracy, the people should decide these things, and to a certain extent they do.
But money and the financial system seem so mysterious that most essential decisions about money have been delegated to financiers. These “masters of the universe” have probably waged the most successful campaign in human history. They organised globally to persuade elected governments to give them responsibility for the world economy and then, when they screwed up, got governments to bail them out. Tax payers, consumers, workers and public service users will pay the price of their mistakes for decades, in loss of output, opportunities, public services and wealth.
Money has magical powers. When there is enough to go round and more for experiment, risk and frivolity people can act. But when money’s tight, people go slow or even stop. People lose their jobs, companies collapse and spending is cut. Although there is work to be done and people to do it, without the magic of money resources are wasted. People who control money cast a spell over individuals, governments and entire economies, so that an individual like George Soros could turn British government policy on its head, wreck the Conservative Party’s reputation, earn over $1 billion and cost the taxpayer £3.3bn over a few day in September 1992. Then for two decades the City cast a spell on the Labour Party and government. And when the banks failed in 2008, governments pledged trillions of Euros, pounds, dollars, Yuan and other currencies to stop banks from collapsing, then cut public spending to appease the money markets. No other industry enjoys such powers or privileges as finance.


How money works its magic
To understand how money magic works, I will use the example of a babysitting circle of 100 families which uses beans as tokens. Each family gets 10 beans when they join. One bean pays for an hour of babysitting and when they run out people can get more beans by babysitting for others. The system works pretty well. Many families enjoy going out a lot, but some families do more babysitting than others and pile up more beans than they need. The babysitting circle agrees that beans can be used to pay for home improvements and other odd jobs, so people are happy to save beans. One enterprising family, the Banks, offer to pay anyone with spare beans one bean for 20 a year (5%). At the same time, the Banks offer to lend beans to anyone who wants them, at a cost of two beans a year for 20 (10%). The Banks earn a fee from the difference in rates between lending and borrowing, but everyone benefits.


Now a remarkable thing happens. Out of 1,000 beans held by 100 families, 900 are deposited with the Banks family. They lend these to other families for home improvements and babysitting, so more people have fun going out and doing up their homes. But no sooner have they lent out the beans than people give them back to the Banks for safe keeping, who lend them out again. Soon the Banks have turned 900 beans into 9,000 beans and lots more people are doing up each other’s homes, babysitting and going out. The baby economy is booming.
This is known as fractional reserve banking and is one way money is put into circulation. As the economist John Kenneth Galbraith wrote, “the process by which banks create money is so simple that the mind is repelled. Where something so important is involved a deeper mystery seems only decent”. (Money: Whence it came, where it went, Houghton Muffin 1975)
This multiplication of money through credit is the first trick in the money-makers magic box. It works well so long as people repay their beans on time, so the Banks family have to be good judges of characters as well as friends of their neighbours. They need to know who is reliable and will replay. They keep good relationships, inquiring after borrowers’ well-being and the progress of their projects. When someone falls ill or has an accident and can’t repay on time, they encourage people to support each other so that no one fails to replay.
The BBC’s Business Editor Robert Peston describes how these “great conjurors” work in short film about banks.
Banks make billions from their ability to create money through credit, a right that traditionally belonged to the crown and is known as ‘seignorage’, which in a democracy should belong to the people. If as a democracy we decide that banks are best placed to create and manage money on our behalf, then at very least the power create money should be open and accountable to Parliament.


Read more
For other mainstream books on the financial crisis, see
Nouriel Roubini and Stephen Mihm, Crisis Economics: A Crash Course in the Future of Finance Penguin 2010
Anatole Kaletsky, Capitalism 4.0: The Birth of a New Economy, Bloomsbury 2010

Raghuram G. Rajan, Fault Lines: How Hidden Fractures Still Threaten the World Economy, Princeton UP, 2010
and the roundup in Moneyweek


For some good alternative analysis of the financial system, see:
David Boyle, The Little Money Book, Alistair Sawday, 2003, an excellent overview which warned  that "Derivatives need serious regulation before it’s too late."
David Boyle (Ed.) The Money Changers: currency reform from Aristotle to e-cash, Earthscan, 2002
Bernard Lietaer, a former top executive in the Belgian central bank, The Future of Money, Century 2001
Francis Hutchinson, Mary Mellor and Wendy Olsen on the history and thinking of social credit, The Politics of Money: Towards Sustainability and Economic Democracy, Pluto 2002
Michael Rowbotham, The Grip of Death (1998) and Goodbye America (2000), Jon Carpenter publishing
James Robertson & Joseph Huber, Creating New Money: A Monetary Reform for the Information Age, New Economics Foundation, 2000


Practical Politics is a personal view from Titus Alexander and does not represent the views of Novas Scarman, Democracy Matters or any of its members.