|Public Service Vouchers - (09.11.03)|
The change in leadership of the Conservative Party looks like the idea of usage vouchers for public services being suggested again. In particular for schools and hospitals, the idea is that giving parents vouchers that can be set against the private provision of education or health services allows patient choice, places a greater understanding of the value of these services by the users and eases usage pressure on stretched public services.
However the fault with these schemes almost universally comes down to financing. Whether there is still a public available service for free or whether funding for free services is reduced by these schemes, the policy is in effect subsidising choice only for those who could have afforded the private service in the first place. An example of this was using a voucher scheme for expanding nursery education. This attempted to expand private provision of child care that the state could not deliver quick enough. However the cost of operating a voucher scheme and the choice given to parents meant that the private sector could not provide an adequate service and many of the nurseries that opened up after the scheme was introduced soon closed. The policy answer following this failure was to give every child a right to free provision, with the state and private sectors effectively working together to deliver this solution.
The same will happen with other voucher schemes. The best way of delivering choice is to have public and private sector organisations working together to deliver an agreed quality of service provision. If the cost of this proves to be more than the taxpayer is willing to afford then governments can choose a level of state provision and real choice for parents will identify alternative private sector provision. Once a certain level of consumer choice is established, governments will step in to ensure social provision for those who cannot afford it, based on the social benefit that results.