Saturday, September 19, 2009

the extra cost society

It's fascinating how Tories manage to pollute an otherwise sensible idea. Consider Barnet Council, fief of comedy food mountain Brian Coleman, and its so-called Easyjet model. I'm going to get at the lo-co fetish, but first, the substance. Among much else, they want to offer people who receive social care an individual budget, which they can use on the services they feel they need. This proposal is roughly sensible, I think.

One of the problems of the welfare state was always that it tended to work on the principle that if everyone had equal rights, then they also had equal needs and equal preferences. The more confident, articulate, informed, and supported by your peers you are, the more likely you are to defeat this, so there was a source of structural inequality embedded in it. It's also a source of structural inefficiency; if you're underproviding some people's needs, you're also probably wasting resources elsewhere.

Naturally, this was still an improvement over a system where some patients would be entitled to treatment and others would be charity cases. But it became increasingly necessary to protest and to hammer on the system with sticks to get it to adjust to human realities, and through the 70s and 80s, a combination of service-user activism and change in professional practices actually achieved quite a lot of this.

I suspect that this is considerably more important in social work than in medicine; much less can be reduced to specific procedures. So, budgets are good; on the other hand, I'd object quite violently to making this mandatory. Why?

For a start, there are people who won't be in a position to manage the budget, and this will be a class- and race-biased phenomenon, and there is a danger that they'll be left out. Voucherism is also almost irresistably tempting to people seeking low visibility cuts - the usual line is to suggest that you could also make a voluntary top-up contribution, and then shrink the actual funding by the same sum, which is a nice way of levying an invisible tax rise.

Another inevitable temptation, especially for Tories, would be to make the voucher valid with the private sector. Not only is this a giveaway to a client group, it also opens a second route for the user to get screwed - over the pricing of services, as it's really unlikely that you could take your social care voucher very far from home. The option of integrated public service provision has to remain open in order to contain other service providers' pricing, to guarantee universal service, and to signal to everyone involved that the service will still exist.

Now, those low-cost airlines. Whoever at Barnet Council or elsewhere thinks they're going to use "the EasyJet business model" is a prize oaf. For a start, both EZY and FR (Ryanair) borrowed it in some detail from Southwest Airlines in the US, and if you don't know that you don't know much about it. Secondly, it can be summed up in two words - yield management. Every airline does this, but Southwest and its followers simply did it harder and more.

What it means is that the fares follow a curve as the date of the flight approaches - some time out they are cheap, then they rise very sharply during the period when the average ticket is bought, and then they fall drastically in the last few days because even a couple of quid is better than transporting the empty seat. Hence the "1 million seats for £1" ads - you won't actually get a seat for that, but they are on offer in a legal sense.

I really struggle to see how a local council can apply this. But then, as I said, they don't mean it. Instead, they like to talk about "making the price of everything transparent"; this refers to all the extra-cost options and distress sales involved. But this is either silly or mendacious.

Does anyone imagine that one transaction on the Web application that does Ryanair's online check-in actually costs £5? If so, their IT department is incompetent to an unimaginable degree. In fact, transparency is the last thing to expect here, rather than a selection of suspiciously round numbers there is no possible way of checking and no competition against. But I suppose it's a viable model of society, if you're a Tory: Welcome to Britain, where life is an extra-cost option.

1 comment:

ejh said...

they fall drastically in the last few days because even a couple of quid is better than transporting the empty seat

Do they always do this though? I get the impression (from travelling a lot by Ryanair, generally Zaragoza-Stansted) that this doesn't necessarily happen, either because they reckon that the last few seats can be sold to people who find they have to travel and will therefore pay full whack for their ticket, or because they know that if they did slash the price late on, everybody would simply wait until the last few days to buy their tickets.

Incidentally, you do realise that what Barnet Council are doing here is operating a stalking-horse for education vouchers?

(On the general question of ticket-buying a long way in advance, it's not clear to me how much this is a localised phenomenon anyway. For instance, Spanish theatres, opera houses and football clubs won't, on the whole, put tickets on sale until the last few days. Nothing gets sold out weeks in advance here, simply because it can't. On the other hand it's not unusual for all the good seats to have gone within half-an-hour of online buying opening.)

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