May’s sad legacy is bigger than Brexit

The following editorial Bloomberg Opinion:

Theresa May will be remembered as the prime minister who couldn’t deliver Brexit. But she also leaves her successor another testing legacy: her failure to confront what she has called the U.K.’s “burning injustices.”

Britain is a rich country by any definition, but it scores badly on a range of social measures. Income inequality is higher than in many comparable nations, and economic mobility is lower. Pockets of deep poverty persist. There are pronounced regional disparities in education and health, and “deaths of despair” have been rising.

May has acknowledged these problems, but has done little to solve them. During her brief tenancy of 10 Downing Street, many have grown worse. Cuts to local-government budgets have undermined social care for the elderly and vulnerable, for instance. Efforts to curb substance abuse have faltered. A once-promising welfare reform, known as Universal Credit, was bungled, a failure that contributed to the recent surge of homelessness.

Assuming that semi-functioning government is one day restored in the U.K., these issues will demand to be addressed, not just named. To be sure, appears on there’s no single overarching remedy for this nexus of ills. And public funds aren’t limitless. It will be crucial to set priorities – and to pair additional spending, where needed, with reform.

Start with health care. Government health spending in the U.K., at 7.6% of GDP, is about half that in the U.S. and far beneath Germany, France and other rich countries. At first sight, genuinely universal health insurance at such modest outlay is a success. But the strains on the system are now painfully clear. May pledged an extra 20 billion pounds annually for the National Health Service by 2023. Even that is unlikely to suffice, given rising costs and a rapidly aging population. The NHS is already lean, so the scope for savings from greater efficiency is small. If Britain wants to retain its fully funded public system, it will need to raise taxes to pay for it.

Elsewhere, opportunities abound for spending more intelligently. For instance, funding for early-years development has been shown to have health and education benefits for children in poorer areas. In time, those benefits mean lower public outlays (on health interventions and control of crime) and higher tax revenues (from a more productive workforce and economy). Programs of this kind have been slashed by two-thirds over the past decade – a patently false economy, proving that “austerity” and fiscal responsibility aren’t always the same thing.

The divide between Britain’s prosperous southeast and the rest of the country continues to widen. Addressing this is increasingly urgent, because the rupture is poisoning the country’s politics. Throwing money at the issue has been tried and doesn’t work. Britain needs to rethink the management of these resources. Local authorities are often best placed to design programs that meet local needs. They should be given the power and budgets to overhaul provision of transportation, health services, training and social care in the areas they know best.

Successful enterprise and economic growth should be a constant theme: They might not be sufficient for redressing social ills, but they’re undoubtedly necessary. Smart investment in infrastructure, education and training can promote growth and equity at the same time. too.

Up to now, the candidates vying to succeed May have shown little appetite for grappling with these challenges – all of which, it hardly needs saying, will be compounded by Brexit.