6 - Quasi-markets in Welfare, or the Non-withering State

Summary

This chapter examines UK welfare reforms. The strategy of ‘quasi-markets’ in welfare was a New Labour innovation, and this chapter sets out why even intentionally ‘progressive’ neoliberal state reforms succumb to the flaws in neoclassical reasoning. The ‘choice and competition’ agenda was conceived in arguments about the relative benefits for ‘end-users’ of publicly funded but privately provided welfare services. As a closed-system argument about a marketplace, it thus wished away the actual terrain of education policy in which the state becomes the disempowered, and yet still responsible planner of outsourced educational enterprises, now governed through contract. The chapter investigates how quasi-market theory played out in the Academy Schools programme in England. It demonstrates why outsourcing complex welfare provision will tend create the worst of public and private regimes: the exploitation of incomplete contracts by producers, informational fragmentation, a loss of public accountability, financial corruption and increasingly Kafkaesque efforts at bureaucratic remedy, all reminiscent of Soviet enterprise planning failures.