Proposal for Universal Basic Services

By agency reporter
October 14, 2017

The UK should provide citizens with free housing, food, transport and IT to counter the threat  of worsening inequality and job insecurity posed by technological advances, a report launched by the Insitute for Global Prosperity recommends.

The proposal for ‘Universal Basic Services’ represents an affordable alternative to a so-called ‘citizens’ income’ advocated by some economists, according to the expert authors working for UCL’s Institute for Global Prosperity.

Building on the ethos that saw the establishment of the NHS and public education – that essential services should be free at the point of need – the plan would 'raise the floor' of basic services all citizens can expect, providing better protection for workers in the face of rapid advances in technology and automation.

Outlining the research, Professor Henrietta Moore, Director of the UCL Institute for Global Prosperity, said: “If we are to increase cohesion, the sense that we are ‘all in it together’, we must act where we can have the greatest impact and that is on the cost of basic living.”

The recommendations include a massive expansion of social housing, free bus travel, meal provision for those most at risk of food insecurity and basic phone and internet access. The total cost of £42 billion – representing just 2.3 per cent of UK GDP – could be fully funded through changes to the Personal Allowance, making the proposal fiscally neutral.

The services themselves might be provided publicly, by private companies, or by the voluntary sector and would need to be democratically accountable locally to prevent state monopolies.

Those in the lowest income decile would benefit the most – saving the equivalent of £126 per week in costs as a 'social wage' if they accessed all the Basic Services. A 'social wage' is the value of a public service to an individual citizen, expressed as replacement for financial income.

Critically, the report demonstrates clearly that UBS would be a far more affordable response to the changing nature of the labour market than a ‘citizens’ income’, also known as Universal Basic Income (UBI).

A UBI paid to all UK citizens at the current modest Jobseekers Allowance level of £73.10 per week would cost just under £250 billion per year – around 13 per cent of total GDP, or 31 per cent of all current UK public spending. By contrast, the transformative effects of UBS are accessible with relatively minor changes to the fiscal structure of the UK economy: additional UBS spending represents only five per cent of existing budgets.

Most plans for basic income include keeping the existing public services in place, and distributing cash in addition to the cost of services. Focusing on more comprehensive provision of services rather than giving cash handouts also means there remains a strong incentive on citizens to work.

Professor Moore and the report’s co-authors – Professor Jonathan Portes of King’s College London, Andrew Percy of the IGP and Howard Reed, director of the economic research consultancy Landman Economics – add that an important aspect of UBS would be the opportunity it could give to rejuvenate local democracy and local involvement in the design, financing and delivery of local services. And they also suggest that UBS could be complementary to a modest basic income.

One recent report by McKinsey estimated that almost half (49 per cent) of the activities people are paid almost $16 trillion in wages to do in the global economy have the potential to be automated by adapting currently demonstrated technology in robotics, machine learning and Artificial Intelligence.

Professor Henrietta Moore, Director of UCL’s Institute for Global Prosperity, said, “Without radical new ideas that challenge the status quo, we face a future where the changing shape of our society and labour market leaves more and more people struggling simply to achieve the basics – let alone having the resources and mental energy to allow themselves and their families to flourish.

“As a society, we already accept that certain services like health and education should be provided free at the point of use to the whole population, because we understand that all of society benefits as a result. The concept of UBS is a logical extension of this principle.”

Andrew Percy, the IGP’s citizen sponsor for the research, added "The safety net of a society must be just as modern as its economy. Universally available public services have the potential to provide the flexible, need-specific, and responsive support that could replace much of our current, conditional benefits, while also preserving the value of paid work, conforming with public attitudes, and building social institutional fabric at the same time.

"It cannot be sufficient to excuse hungry school children or an uncared-for elderly population with a notion of ‘unaffordability’ in a society that is as rich as any that has ever existed.”

Professor Jonathan Portes of King’s College, London, said, “The role of the state is to ensure an equitable distribution of not just money, but opportunity to participate and contribute to society. For that to be meaningful, there are likely to be certain services everyone should be able to access.

"UBS, like basic income, has the potential to improve work incentives, especially for lower paid workers. It reduces the cash income required, through the benefit system or from savings, for individuals or families to survive at an acceptable standard of living if they have little or no income from labour; and if services are provided to all regardless of work status, then there is no disincentive effect from the loss of access as people move into work or increase their earnings.”

Read more about the proposal for UBS here

* UCL Institute for Global Prosperity


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