By Vic George, Peter Taylor-Gooby (eds.)
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Additional info for European Welfare Policy: Squaring the Welfare Circle
This seems such an easy and obvious source of revenue that it is likely to attract the attention of even governments which are ideologically opposed to denationalisation. The fifth possible way of raising further funds is by introducing new or increasing existing charges for the use of services. There are obvious administrative difficulties with this approach as well as the danger that such charges may deter people in genuine need from making use of the service, particularly if such charges are high.
This is not the place to review these procedures but suffice it to say that only the idea of annual budgets can have the certain effect of reducing expenditure. The effect of the other measures on service costs can vary and it can be both upward as well as downward. Finally, from both the right and the left there has recently been a keen interest in involving the community in the running of public services for a variety of reasons, including the belief that it can reduce expenditure. Thus emphasis on care in the community for the elderly, the mentally ill, the disabled and other groups has been driven partly by the belief that it will be less costly than residential care.
Carried to its logical conclusion, this approach will inevitably result in a two-tier welfare state with high quality private services for the better paid and low quality state services for the others. By the very nature of things, those who opt out of services will not be prepared to pay high taxes in order to provide state services that are of equal standard to those in the private sector that they and their families use. It is true that this approach can be quite costly in the sense that the government forgoes large amounts in revenue, but this is seen by both its advocates and large sections of the public as different from the usual type of government expenditure.