The economic debate of recent weeks has centred around the credit crunch and the changing times of Northern Rock. The Liberal Democrats have shown leadership with Vince Cable’s well-respected comments on the nationalisation issue.

This week, the focus will shift to the Government’s plans for fiscal policy for the coming years. In Wednesday’s Budget, the Chancellor has the opportunity to set out a new model for government spending, based on long term sustainable public spending policies. If he does not take it, he will leave the field open for the Opposition parties, and the Liberal Democrats could capitalise on their recent successful economic commentary.

A new report published today by the independent think tank Reform argues that the programme of public sector expansion begun in April 1999 – the largest and longest spending increase of the last 35 years – has been unsuccessful on all fronts. It has failed to achieve its stated aims, it has restricted rather than boosted economic growth, and it has left the UK ill-placed to face the challenges of the coming years.

The Government has justified its programme of spending increases on the grounds that it would transform public services and boost the UK’s productivity (the celebrated post neoclassical endogenous growth theory), but these aims have not been realised. The scale of spending increases and the absence of reform means that they have acted as a flash flood rather than the planned irrigation that was needed. Entrepreneurial activity, business start ups and private spending on research and development have all declined over the period.

The picture of strong economic growth during this period is misleading. The report shows that 29% of GDP growth from 1999 to 2006 has been generated by public sector expansion. And while the UK has been increasing levels of public spending and borrowing - its ‘fiscal footprint’ - competitor countries have been moving towards fiscal consolidation. Government spending is now well above the average for OECD countries, the budget deficit is amongst the largest in the OECD and the UK has moved from having the fourth lowest gross public debt in the Euro 19 Area to the ninth. The UK has missed out on the opportunity given by a period of benign global economic conditions to reduce its fiscal footprint and taxation has risen to fund this. The UK is therefore no longer a leading low-tax economy and its competitive position in the global economy has declined.

As a result the UK Government and the wider UK political debate now need a change of attitude as well as policy. Above all, there is a need to move beyond the Pavlovian reflex of committing more public money whereever there is a problem. We commend the words of the Cabinet Secretary, Sir Gus O’Donnell, who in a recent speech called on the UK Government to start “to do more with less”. Partly this is realism – in a globalised world it will be increasingly hard for governments to raise taxes. And partly it is optimism – greater productivity in the public sector will enable reductions in the tax burden, increasing incentives to work and save and making the UK a more attractive business environment.

Over recent years the Liberal Democrats have moved decisively in this direction. Higher tax policies have been passed over. In his first major speech on the economy, last month, Nick Clegg went so far as to say that controlling public spending is his “top priority”, and to say that “improving public services … means focusing on “how”, not “how much”. At a time of economic change, when all parties are reviewing their positions, these ideas are a strong foundation for the Party to become the most authoritative advocate of a sustainable fiscal policy for the UK’s future.

* Elizabeth Truss is Reform’s Deputy Director and Lucy Parsons is Reform’s Economics Research Officer. A Lost Decade: Counting the opportunity cost of public spending 1999-2008 is available here.

The Labour and Conservative parties have both supported the academies programme as the key driver of educational reform. The Liberal Democrats, in contrast, have been more critical towards academies, ambivalent about their ability to select 10 per cent of pupils by aptitude and their status as a programme of central government rather than of local authorities.

But the Party appears to be revising its position. In his key speech on public sector reform, on 12th January, Nick Clegg said that there is “nothing wrong with allowing schools to exist outside direct daily local government management - as long as they are under local government oversight”.

A new report published by the independent think tank Reform argues that the current academies programme is the best available model for facilitating educational reform. Richard Tice, Chair of Governors at Northampton Academy and author of the report, shows that much greater freedom of management under the academy model has transformed the school leadership’s ability and willingness to take decisions. Specific improvements have included changes to the teaching and management staff and several changes to discipline policy including a new off-site centre for excluded pupils.

As a result a badly underperforming school is quickly improving, though major challenges remain. GCSE performance has significantly improved since the new management has taken over, truancy has fallen by a third, teaching absenteeism is much reduced and the school receives three applications for every place.

Richard’s practical experiences thus point to a key conclusion – it is the management freedom, not the new buildings, which have transformed the fortunes of this failing school. He therefore calls for the academy principle of freedom of management to be rolled out across the state sector, not the capital investment of the academy programme. With very little cost, all schools would be given the opportunity to radically improve.

There is thus significant opportunity for the Liberal Democrats to lead calls for education reform. Nick Clegg has stated: “I want us to look at establishing a new liberal model of schools that are non-selective, under local government strategic oversight but not run by the council, and free to innovate to drive up standards for all our children.” This is clearly in line with the proposals of the Reform research and could go far further than the Government’s target for 400 academies after 2010.

There are issues that need to be addressed before the academy model can be rolled out. Independent appeals panels on exclusions should be removed and the role of the National Curriculum, performance tables and tests need to be reduced. Liberal Democrats should not shy away from addressing issues that go deep into the culture of the education system, in particular the role of the teaching unions. Unions should change their approach to academies and particularly to the ability to vary teachers’ pay and conditions locally in the interests of their members and ultimately the students they teach. By supporting the academy model, unions can transform their role from a blocker of reform to a positive driver of change.

The Reform report shows that there is already a model that the Liberal Democrats can build upon to achieve their vision of “Free Schools”. Existing academies have already demonstrated that positive steps can be taken for effective leadership, improvement in teaching standards and better discipline. With the further reforms that Richard Tice proposes, these measures could transform state education in England.

* Elizabeth Truss is Reform’s Deputy Director and Laura Kounine is Reform’s Education and Crime Research Officer.

I approach this guest article for Liberal Democrat Voice with some trepidation, not least because when I introduced the launch of Liberal Conspiracy a few months ago, it was greeted with some scepticism amongst Lib Dem bloggers. Jonathan Calder called it “a conspiracy against Liberals”, Joe Otten calls us the Lefty Conspiracy and, at worst case, Alix Mortimer said it could be “a plot to draw Liberal Democrats towards Labour”.

There’s no doubt British politics is an incredibly tribal affair and this is reflected in the fact that all our prominent political blogs are tightly aligned to specific parties. The over-arching philosophical question we face, by defining ourselves as being of ‘liberal-left’ persuasion, is the tension between statists and liberals on the left, which Duncan Stephen explored here. I’m not afraid of exploring these issues, and neither is it meant to be a “wedge”, as Charlotte Gore called it.

Instead, I approach Liberal Conspiracy from two positions: first, that most people are more interested in policies, values and ideals more than the party advocating them. The trick, of course, is to develop and debate good ideas. Secondly, to focus more on how political parties can be pressured, through online organising, to support those values and ideals (of liberal-left persuasion, of course).

Crucially, those ideas and policies are not necessarily party aligned. Our first campaign, against Home Office proposals to raise pre-detention charge to 42 days, is supported strongly by the Lib Dems, of course. We’re now gearing up to raise profile of the Human Fertilisation and Embryology Bill, which potentially poses a threat to abortion choice and offers the pro-choice lobby to propose more progressive policies. Also upcoming - pushing for electoral reform. In all these cases, the issue matters more than the party supporting them.

There are two points to make here. The Liberal Conspiracy position is somewhat inevitable given that both Labour and the Tories have been exchanging clothes over the last 10 years, and focused more on marketing and spinning their ideas than staying true to traditional values. If political parties have become promiscuous with their ideas, there is no reason why voters shouldn’t also become promiscuous with their choice. Arguably, the parties were only following voter trends anyway.

My second point is that there is, and should be, space for progressive activists and voters of all stripes to come together to push specific policy agendas that help make Britain a better place. To be honest, I don’t care which party gets into power as long as they have Good Ideas^TM. This isn’t to deny that people are attracted to parties on the basis of ideals and values, but to say that being more promiscuous may stop parties taking votes for granted and fight hard for their (leftist, liberal or conservative) corner.

My feeling is that campaigning and discussing issues rather than simply party politics is more likely to attract a bigger audience and grow the blogosphere. Though I may be wrong. It’s still early days.

* Sunny Hundal is editor of the online magazine Asians in Media and founder of the thinktank New Generation Network.

Centre Forum have sent this information about a meeting they are holding tomorrow

Coalitions and minority governments remain unusual in Westminster but the Scottish Parliament and Welsh Assembly now mean they are no longer a purely foreign import in the UK. Yet despite a hung parliament at the next general election more likely than at any point in the last thirty years, little or no preparation is being made at Westminster for the possibility of an election result which might require coalition or minority government.

It is this which spurred the independent liberal think tank CentreForum’s recent publication, ‘In the balance: coalition and minority government in Britain and abroad’ which examined Scottish, Welsh and German experiences of operating within non majority governments.

Following on from seminars held in Cardiff and Edinburgh, CentreForum will be holding the final seminar in the series on Tuesday 22nd January to discuss the experience of non-majority government in Wales and Scotland during the first eight years of devolution and to consider the implications for Westminster. Read more »

We are, said George Orwell, ‘a nation of flower-lovers, but also a nation of stamp-collectors, pigeon-fanciers, amateur carpenters, coupon-snippers, darts-players, crossword-puzzle fans’.  We think we can top that list.  We collect statistics on parliamentary voting behaviour.

And over the last decade we’ve noticed the remarkable change that has come over Lib Dem MPs.  Out of the 182 whipped votes in the last session of parliament, they voted with the Government on just 22 occasions.  Of the votes that occurred on the Second or Third Reading of Bills - what are effectively the votes on the overall principle of the bill - they voted against 94%, backing just one Government bill.

So what?  Isn’t this the point of opposition?  Except that it hasn’t always been like this.  Go back a decade, and you find the Lib Dems sharing their parliamentary favours much more evenly.  In fact, in the first Blair term, the split was about as even as you can get: between 1997 and 2001, Lib Dem MPs voted with the government on 557 occasions, but against on 556 occasions.  You can’t get much more equidistant than that.  And back then, when it came to votes on the principle of government bills, the Lib Dems voted with the Government in 68% of votes.

The ten years since have seen a steady, and almost continuous, rise in hostility towards the government.  By the end of the 2001 Parliament, the Lib Dems were voting with Labour on 25% of whipped votes, and against 75% of the time.  The figures for the first two sessions of this Parliament are just 18% for, 82% against.  Some recent research from the Constitution Unit at University College London revealed a similar transformation in the Lords, where the Lib Dems are effectively the swing voters, from a position where Lib Dem peers were more likely to vote with the government than not during the first Blair term to one in which they were more than four times as likely to vote against the Government by the end of the second term.

Lib Dem MPs we know sometimes complain that this is an unfair way of looking at their behaviour.  Because the practices and procedures of the Commons make it difficult for them to map out an independent policy position, in most votes they are forced into making a tough choice between Labour and the Conservatives.  And just because on one vote they might vote with the Conservatives against the Government that does not necessarily mean that they agree with them.  It might just be that on that individual vote they disagree with the Conservatives less than with Labour.

But given that the Party does have to make that binary choice, over a mass of votes we can still draw meaning from their behaviour.  We may prefer to travel in a chauffeured car, but life’s a bitch, and so we’re forced to use trains and buses.  And if in one year we travelled by train 60 percent and by bus 40 percent of the time and in another year we travelled by bus 90 per cent of the time and train just 10 percent, then no one would doubt that there had been a change in our behaviour.  That is exactly the magnitude of the change to have come over the Lib Dems in recent years.  And it’s a long way from equidistance.

Philip Cowley and Mark Stuart are based at the University of Nottingham.  They run www.revolts.co.uk, which publishes regular research on parliamentary voting.