Government Archives - WA Communications

Balancing the health of the nation with the health of the economy – 10 key takeaways

On 15^th October WA hosted an event exploring the difficult decisions facing government in balancing the health of the nation with the health of the economy.

With a second wave of Covid-19 upon the UK and much of Europe, political, media and public pressure is building, and a difficult winter is approaching.

We brought together an expert panel to consider the issues, hosted by WA Director Caroline Gordon. The speakers included Tom Newton Dunn (Chief Political Commentator and Presenter at Times Radio), Poppy Trowbridge (former Special Adviser to the Chancellor and WA Advisory Board Member) and Dr Jonathan Pearson-Stuttard (Epidemiologist at Imperial College London).

It was a wide-ranging debate (watch here if you missed it), but what were the key takeaways?

Here are our top 10 points made during the discussion:

1) The prosperity of a nation is inextricably linked to the health of a nation:

The pandemic has taught us the value of public health cannot be underestimated. A legacy of Covid-19 must be a proper review of how we approach public health and what we ask of the NHS.

2) Devolved and regional politics has grown in power:

With healthcare devolved to national governments and Metro Mayors exercising influence over local lockdowns, leadership over the pandemic has often come from politicians not based in Westminster. What will this mean for the Government’s agenda beyond Covid-19?

3) Government is still stuck in campaign mode and not thinking long term

It’s no great surprise that a government of campaigners would think in campaign terms, but their focus has been too short term and the messaging too ambitious. With the pandemic creating complicated and long-term challenges they need to find a more nuanced way of communicating.

4) The libertarian principles of the Government are holding it back from decisive action

The restrictions being introduced to manage the spread of the virus are unprecedented for any democratic government, but they particularly jar with the PM’s brand of libertarianism. That conflict, manifested in hesitation and delays about enacting measures, has surfaced repeatedly through the crisis.

5) No 10 and No 11 have been closely aligned, but that could be fraying

There has often been tensions between the inhabitants of No 10 and No 11 Downing Street, but in Boris Johnson and Rishi Sunak there has been unusual harmony up to now. That consensus, however, is coming under strain with the Treasury keen to focus on keeping the economy moving and resistant to overly restrictive measures. How this relationship plays out could come to define the rest of this government’s term, particularly with the Chancellor being tipped as the most likely successor to the PM.

6) Internally government realise ‘Test & Trace’ is not working

With no clear vaccine timetable or even the promise that one will work, NHS Test and Trace is the only route back to a degree of normality. A fully functional test and trace system was the only reason SAGE agreed to the unlock over the Summer, but the Government’s centralised approach has been beset by problems. Whilst they have not publicly admitted it, quietly they are beginning to shift people and resources towards local test and trace approach which has been much more effective.

7) The government could do a lot more to help businesses navigate the crisis

Government offloaded too much responsibility onto businesses and were not clear about how long restrictions were likely to be in place. This uncertainty has meant businesses can’t plan effectively and many have taken an understandably cautious approach because of this. With unemployment rising, the Government needs to find a way to give business the confidence to invest and create jobs.

8) The public consensus is fragile compared to the first wave

People feel ‘cheated’ by being ask to lockdown again – they were willing to trust the process first time around, but a lack of faith in the government a second time around (not helped by the Dominic Cummings affair) could undermine the effectiveness of measures for the second wave.

9) England and Wales has one of the worst excess death tolls in Europe

Dr Jonathan Pearson-Stuttard’s research has shown that excess deaths in England and Wales were 37% above normal, second only to Spain’s 38% as the worst performance in Europe. When the public inquiry into the handling of Covid-19 finally comes, there will surely be questions to answer.

10) The Government’s long-term ambitions are on hold

It may not feel like it, but we are still in the early days of this Government. Elected back in December 2019 with a strong majority, the crisis has put the brakes on the broader policy agenda as they battle to tackle the virus and shore up an unstable party. The Government is a long way from making strides on its domestic agenda, businesses need to try to understand what each Department is trying to achieve despite the virus and bring solutions and opportunities for good news.

These are just a handful of takeaways from a wide-ranging and fascinating discussion, you call watch the full video exploring how to balance the health of the nation with the health of the economy here.

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Government’s Covid-19 response: What it means for private equity

The government’s response so far to the Covid-19 pandemic provides for a mixed report card.

Disasters have been averted in the NHS, but death numbers are among the highest in Europe and coronavirus is having a devastating impact on care homes. Questions about the timing of lockdown and the government’s testing infrastructure also remain. The government’s business support measures have been more successful. The furloughing scheme has undoubtedly saved hundreds of thousands, if not millions, of people from unemployment and credit is finally making its way to businesses who need it via the Bounce Back Loan Scheme and the Coronavirus Business Interruption Loan Scheme (CBILS).

Private equity firms and their portfolio companies have not been at the front of the queue to receive government financial support, nor have they been at the forefront of the government’s mind throughout the policy development process. The furloughing scheme has allowed portfolio companies to keep staff on the payroll, while the government subsidises their wages, and the news the scheme will continue until October provides certainty to both workers and management teams for the next few months at least.

CBILS, when it was announced in March, gave the impression that it could provide a vital line of credit to support the liquidity of many private equity-backed portfolio companies. CBILS allowed firms with a turnover of less than £45 million to borrow up to £5 million, with 80% of the loan backed by the government.

However, many portfolio companies were ineligible for the loans as turnover was originally calculated on a group basis, taking into account the portfolio as a whole. This rule was later relaxed to allow portfolio companies to apply as separate entities for the government-backed loans, alongside the introduction of the Coronavirus Large Business Interruption Scheme (CLBILS) that provided credit to firms with turnover over £45 million. CLBILS was created after it was pointed out to government that many firms were too large for CBILS but were not of investment-grade so could not access the Bank of England’s Covid Corporate Financing Facility (CCFF).

Just when private equity firms thought it was possible to dip their toes into this new pool of credit, another issue raised its head that has proved to be a significant barrier to portfolio assets accessing the government-backed loan schemes.

Under EU state aid rules, firms that had accumulated losses greater than half their subscribed share capital as at 31 December 2019 are not eligible for government support as they are deemed to be a ‘business in difficulty.’ Due to the leveraged structure of the vast majority of private equity portfolio companies, this rule has made them unable to access CBILS and CLBILS.

Both the British Private Equity and Venture Capital Assication (BVCA) and the Confederation of British Industry (CBI) are currently lobbying the EU Commission to change the rules, but so far the Commission has held fast.

The saga of how the government’s various support measures have arguably fallen short in supporting PE-backed companies illustrates two important facts about government.

The first is that the old adage about not wanting to see how the sausage is made still holds true. The government has had to conduct policy development that would normally take years in a matter of months, with every mistake or problem that would have been caught along the way being made in full view. Fortunately, industry groups like the BVCA, and expert advisers supporting individual investors have been on hand to support the government and ensure the measures have been refined enough to help the majority of businesses.

The second is that while government has been willing to make some concessions to private equity, the sector is clearly nowhere near the top of the government’s agenda. This partly comes down to a lack of understanding of how the private equity model works, for which the industry itself must take some responsibility. If policymakers buy in to many of the enduring myths about the sector – that UK private equity firms are sitting on huge amounts of cash that could be deployed to support their portfolio companies – for example, there is little incentive to go to any special lengths to provide them state-backed financial support

The post-coronavirus recovery will offer private equity firms the ideal opportunity to rectify this problem and ensure a more prominent position in the government’s thinking. By demonstrating how private equity firms bring expertise, innovation and growth to businesses in all sectors across the UK, private equity can make its case that it is a force for good.

Government will be looking for every opportunity to promote growth and investment, and private equity firms will be in a strong position to contribute to this.

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Covid-19: what will the recovery look like?

Since the Covid-19 crisis hit, the focus has been on crisis response.

Government, businesses, trade associations and charities have all been grappling with an existential threat that would have been unthinkable just a few short weeks ago.

The Government’s response has been swift and significant. Hundreds of billions of pounds have been made available to prop up businesses in the form of grants, loans and tax deferrals.

What does the Recovery look like?

The priority up to now has quite rightly been how we manage the health and economic emergency that Covid-19 has created. But parts of the Government are already pivoting to think about what the recovery could look like, how we can speed it up and what policy levers they need to pull to make it happen.

A lot will depend on the nature of the economic recovery and governments around the world are using every tool in their arsenal to try and prevent a drawn-out recession.

But even more will depend on people.

How will we all respond once restrictions are lifted? How can we be encouraged to start pumping money into businesses who will desperately need it?

Policy Innovation

Policy teams across Whitehall are looking at their programmes and trying to work out which parts are still viable post-Coronavirus; which parts will need to be reworked and which parts put away for another day.

Policy innovation will have to occur almost everywhere.

And the situation with businesses is no different.

The past few weeks at WA Communications have been about helping clients understand the developments, put their cases to government and manage crisis communications.

But already the conversations are starting to shift from disaster response to recovery. We are talking to clients about what work they can do now to maximise their chances for success once the crisis passes.

Structural Reform

But more than that, structural reform questions are already beginning to surface.

After the 2008 crisis the financial sector went through unprecedented scrutiny and regulatory change.

This time the questions will be broader; about our long-term investment in public services, the role of the state; the readiness and structure of the NHS; the nature of employment; and the capabilities of the domestic manufacturing base to name just a few.

Central figures in this government are born reformers and will relish these types of challenge to conventional thinking.

Dominic Cummings may no longer be able to go to war with the BBC or civil service hierarchy, but he may yet find room for his reformist agenda in the response to Covid-19.

Message and positioning are key

Given the unprecedented upheaval the Government is having to manage, making your message stand out is key to being heard.

Measures that drive economic recovery and protect or create jobs will draw the most attention.

But there will also be possibilities to think more creatively about how you can work with government, what policy innovations can fit into the broader narrative of recovery and which sectors can lead the charge.

Despite the pandemic, it’s important to remember this is a government fresh off the back of a resounding election victory and with a huge swathe of first-time Conservative voters to please.

In the midst of a crisis it seems premature to be thinking about a recovery, but the Government is already looking for ideas.

Positive policy ideas that can help support the economy will be listened to.

Organisations that bring solutions will be welcomed.

Using this time to think about what role you could play in the recovery would be time well spent.

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Governing in a Crisis: How the UK Government is adapting to Covid-19

We are living through unprecedented times, but just like all of us, government and parliament are adapting to a new way of working.

New structures within government as MPs head home early

The immediate attention of the Government is understandably and rightly on responding to the national public health and economic emergency that we face. As the Prime Minister put the country on a war-like footing, camp beds have been dusted off, and families have been told not to expect to see loved ones working on the front-line for days, weeks and possibly months.

But this bunker is far from isolated from the outside world.

It is relying on a network of communications channels, some hastily set-up, to feed those inside with information and intelligence in order to guide their next move.

As a priority, the prime minister created a new ministerial structure framed around four new implementation committees focusing on health, public sector preparedness, the economy and the international response. Each committee is chaired by the relevant secretary of state and brings together officials and ministers, reporting into Downing Street.

Number 10’s business team and its sector specialists have been tasked with triaging the huge amount of correspondence pouring in from companies up and down the country who are requesting additional clarification, detail and support.

And within the ministerial departments, officials and advisers are having to manage an unprecedented amount inbound communication. Their job is to identify common themes and to spot worrying outliers, relaying this information up through the chain of command for action.

Outside of Whitehall, it was confirmed today that MPs would leave for their constituencies a week earlier than planned for Easter recess.

This measure follows on the back of the Speaker telling all visitors to stay away from the parliamentary estate, select committee hearings being wound-up with no witnesses to interview, and Westminster Hall debates being pulled for fear of transmission.

New ways of working

Against this backdrop you would be forgiven for thinking that nothing else but coronavirus matters.

It is true that priorities have shifted, and that the coronavirus response is without doubt the single biggest item on the Government’s agenda. The response, and its aftermath, will preoccupy the duration of this Government, and probably the next.

But it is noticeable that, even now, most meetings already in the diary to take place in person with ministers, parliamentarians and officials on matters outside of coronavirus, are being quickly re-arranged to take place over audio and video conference lines.

Postponed not cancelled. Moved in the diary not removed from the agenda entirely.

Similarly, all current select committee inquiries have had their deadlines for evidence submissions extended.

While Easter recess could not have come sooner for many MPs, parliament is expected to return – in some way – on April 21^st. Robert Halfon MP, chairman of the education select committee, is pushing with many others for remote working to be enabled.

Central to this will be video conferencing and, potentially, digital votes. This may not be possible to arrange at full-scale in just a few weeks, but the Commons has already approved temporary use of video conferencing by select committees until June 30^th, with the option for the Speaker to extend.

We can expect more information to follow in the coming weeks as 21^st century parliamentarians lobby the new speaker to bring parliament up to speed to allow much required parliamentary scrutiny to continue.

Looking ahead

The attention and focus of the Government and parliament will, of course, remain doggedly on coronavirus for the foreseeable future, but we should not forget that this is a Government at the start of its journey not the end.

It is a Government with a manifesto that – while surpassed by recent events – was built on a lot of promises that people will remember, not least the levelling up agenda.

This Government will have a mammoth task in responding to the fast-moving crisis and realising its commitments through tangible outcomes.

In the fog of war it can be hard to see, but this Government is lucky to have a business community standing ready with ideas and solutions to help it in its immediate response and in the delivery of previously made pledges.

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Restructuring the Civil Service – is the government ready for post-Brexit Britain?

Now that the country has decided it is time to get Brexit done, the Prime Minister can use his whopping majority to push through the necessary legislation over the coming weeks and, hopefully, move onto the much-neglected domestic agenda while the trade talks carry on in the background.

But this need to push through the legislation to have us out, as promised, by the end of January is leaving many of those on the frontbench enjoying a lengthy interview process for their own jobs – or one higher up the ladder – while we all wait for the much-anticipated epic reshuffle in February.

Rumours in and around Westminster about who is out (Truss? Wallace? Barclay?), who could be coming up (Sunak? Dowden?) and who may have to be moved to allow them to spend more time with their constituents (Raab saw a huge drop in his majority in Esher & Walton) are making some hopeful and many nervous.

Talk of a significant reconfiguration of Whitehall departments is being played down, with a smaller-scale re-jig now looking more likely but Dominic Cummings’ determination to shake-up the Civil Service machine is anything but dimmed.

You only need to look at his blog from 2014, where he says: “If we want serious government then we need fundamental changes in the way ministers and officials are selected, trained, paid, managed and held accountable”. His recent blog post calling for “weirdos and misfits” to apply for roles should not be seen in isolation but the first step in him seeking to put his ideas into action. With the backing of the Prime Minister, this could be more than just an expensive change of the Whitehall stationery.

“With the backing of the Prime Minister, this could be more than just an expensive change of the Whitehall stationery.”

Unnamed cabinet ministers were quick to warn about the destabilising effect of shaking up a civil service that has gone largely unchanged since its creation, pointing out that it is the ‘envy of the world’, but many acknowledge that it is far from as efficient as it could or should be to deal with the demands of 21st-century government.

But should anyone really be surprised? Changes made during Cummings’ time at DfE were surely just the warm-up act, confined to a single department and clearly with the full support of Gove as secretary of state, but the resulting anger from teachers and many parents had an impact of the 2017 election result. Later, running the Leave campaign, he seemingly had no issue with sidelining lifer-Brexiteers including Bill Cash and Bernard Jenkin, as well as keeping those with much to say on the subject such as Mark Francois away from media. Upsetting Cash, Jenkin, Francois et al. might have bruised a few egos but ultimately it was in the name of a greater cause they all believed in and hasn’t had longer-term consequences for the Party’s ability to win a convincing majority. Can the same really be said for Cummings’ radical plans for the Civil Service?

Much noise is coming from the left about all this meaning that Boris is now running a right-wing, revolutionary Conservative government. But remember – Cummings isn’t a Tory, he’s a disrupter. An unpredictable force who enjoys mischief. Yes, he is a very serious person who genuinely believes in what he is doing, but if he has a fault it is perhaps that he is over-impressed by people who know things about the stuff he doesn’t. Take his call for all those “weirdos and misfits”, about not wanting “confident public school bluffers” and “Oxbridge humanities graduates”. Cummings, a former Durham School pupil, with a first in Ancient and Modern History from Oxford, is not seeking to create a civil service in his own image but instead is putting his faith in those with the skills he considers the civil service is lacking.

“Cummings isn’t a Tory, he’s a disrupter.”

As Jill Rutter has made clear in her recent piece for the FT, Cummings is right to point to the lack of scientific expertise in the heart of government, noting that those with science degrees made up less than 20 per cent of the Civil Service fast stream intake in 2018. With so few scientists coming through the door, it’s hardly any wonder there is a lack of expertise higher up. While Cummings may be right about the lack of those in our civil service with science and maths degrees, he is wrong that the solution to all of Whitehall’s problems is a load of bright disrupters at the top. Much deeper change is needed and Jonathan Portes , writing in the Guardian, is right that Cummings’ plan doesn’t make getting a GP appointment any easier for the millions who are frustrated by their lack of access.

In any case, while the political world may well be obsessed while they play the waiting game until the Brexit deadline, what may well matter far more in the long-term for the Prime Minister is whether UK troops are killed for something that Trump has done. Forget Cummings and his disruptive tendencies, this is real statecraft.

Ultimately though, change is coming to the Civil Service and it is long overdue.

Whether Cummings’ radical vision is the right one at the right time, or too much too soon is yet to be seen but civil servants, ministers and those of us in public affairs would do well to pay close attention over the coming months.

There will be implications for business and, combined with the renewal of the domestic policy agenda and the upcoming Budget in March we will soon learn where No10’s priorities lie. Being ready to make the case to ministers and departments, in the context and language of Cummings’ changes and vision will ensure closer alignment with the Government’s priorities and a much better chance of success.

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Posts Tagged ‘Government’

Balancing the health of the nation with the health of the economy – 10 key takeaways

1) The prosperity of a nation is inextricably linked to the health of a nation:

2) Devolved and regional politics has grown in power:

3) Government is still stuck in campaign mode and not thinking long term

4) The libertarian principles of the Government are holding it back from decisive action

5) No 10 and No 11 have been closely aligned, but that could be fraying

6) Internally government realise ‘Test & Trace’ is not working

7) The government could do a lot more to help businesses navigate the crisis

8) The public consensus is fragile compared to the first wave

9) England and Wales has one of the worst excess death tolls in Europe

10) The Government’s long-term ambitions are on hold

Government’s Covid-19 response: What it means for private equity

Covid-19: what will the recovery look like?

What does the Recovery look like?

Policy Innovation

Structural Reform

Message and positioning are key

Governing in a Crisis: How the UK Government is adapting to Covid-19

New structures within government as MPs head home early

New ways of working

Looking ahead

Restructuring the Civil Service – is the government ready for post-Brexit Britain?

“With the backing of the Prime Minister, this could be more than just an expensive change of the Whitehall stationery.”

“Cummings isn’t a Tory, he’s a disrupter.”

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