There’s one thing that could improve all public services… and it’s not more money

Rather than piecemeal changes and sporadic spending cuts to individual government departments, Labour must reinvent how the state works from the ground up, says Ryan Wain

Ask anyone working in public services what they want from the coming year, and whether they work in the NHS, education or welfare, you’ll hear the same answer: more money.

Given the miserable years of political neglect that we have endured, that instinct is understandable. Their toll can be seen in our exhausted frontline workers, frustrating them that they can’t deliver the service they came into public life to provide.

But there is also an uncomfortable truth to confront.

Public services are already costing us a fortune and the UK’s tax burden is close to record highs. And yet, outcomes keep getting worse. It appears that we are spending more and getting less. That isn’t bad luck, but the absence of a coherent theory of reform.

British politics hasn’t had one since the New Labour years. Instead, we’ve seen piecemeal change: reforms by department rather than across the system; initiatives that tackle symptoms rather than causes; activity that looks like change but never quite adds up to it. Reviews, pilots, restructures and slogans can all dress up as progress but without an overarching plan, they rarely change how the state actually works.

Such a plan, clearly expressed, gives the leverage to the centre of government. By creating a productive tension with departments, it forces them to respond to a shared sense of what is possible and what is expected.

It also enables a critical degree of oversight. The problems being grappled with in the public services cannot be neatly contained within departmental silos. Take someone with an emerging mental health condition. They might see a GP. They might miss school or drop out of work. They may end up claiming benefits, where we know long-term inactivity often worsens outcomes.

You can improve NHS waiting times and still fail that person – and cost the taxpayer more in the long run. A theory of reform is what allows government to join these dots, tackle root causes and intervene earlier, rather than simply firefighting the closest or splashiest damage.

As Lord Reid puts it in the foreword to the Tony Blair Institute’s new paper, “in the absence of a shared theory of reform, rapid, visible, durable progress is absent”. He speaks from experience.

New Labour didn’t just invest more in public services; it had a clear plan for how such an overhaul would work. In simple terms, choice plus competition would drive quality and fairness. That formula was applied across government with impressive results. We saw it in the NHS, where waiting times fell sharply and satisfaction reached record highs, to a peak of 70 per cent in 2010.

We saw it in education, where greater freedoms for school leaders helped drive major improvements in attainment. This was most notable in initiatives such as the London Challenge, which saw schools in the capital almost double the proportion of students achieving five or more A* to C grades at GCSE between 1997 and 2013.

You can argue about the details. But the lesson is clear: when change is clear, joined-up and has solid government backing, it delivers better outcomes – and political rewards. The argument now isn’t to resurrect that theory. Just as the world has changed, so too have the tools available to the government.

Today’s theory of public service reform needs to be fit for the AI era. That modern equivalent is a data-driven country with public services that are personalised, preventative and available 24 hours a day.

Most people already experience this in their private app usage, where services adapt to them rather than the other way round. For those with the means, it’s already happening in health and education. This is deepening inequality in access and outcomes: by the end of their GCSEs, state school pupils now have a 19-month disadvantage gap behind their privately educated peers.

This is the real argument for digital ID. Not as surveillance, or a bureaucratic exercise, but as the essential infrastructure of modern public services. Done properly, digital ID gives citizens control over their data, transparency over who accesses it, and the ability to let information follow them across services with consent.

Countries such as Estonia show this can be done securely and democratically. It enables a genuinely personalised front door to the state – not a digitised version of what already exists, but a new operating model altogether.

In health, that could mean an NHS app that doesn’t just book appointments, but actively helps manage your health by prompting check-ups, flagging risks and integrating data across services. It enables a move from sickness to prevention as the 10-year plan promised. In education and welfare, it means spotting patterns early – building on the government’s welcome use of AI to identify long-term absenteeism – and intervening before problems escalate.

Being available 24 hours matters, too. People don’t live their lives between nine and five. Services that can only respond during office hours are already obsolete.

The real gap in British politics isn’t in commitment to public services but in lacking a clear model for change that is relevant to today’s needs. That gap is a wider failure of progressive politics, but it is also an opportunity.

AI-era public services reform could become this government’s blueprint. It would restore trust, make the state work better for citizens, and give the centre of government the power to deliver visible change. And if history is any guide, governments that reform public services successfully don’t just govern better – they win elections, too.

Ryan Wain is executive director of policy and politics for the Tony Blair Institute