Most of us know where we stand on the economy, welfare and jobs, but political and constitutional reform is often treated like the uninvited guest at a party. From the alternative vote to House of Lords reform, debates about democracy have proved deeply divisive or are viewed as peripheral to the project of regaining power. But if Labour wants to form a bold, reforming government it cannot duck questions about the constitutional landscape and how to bridge the yawning gulf between people and politics.

The Electoral Reform Society’s new report Reviving the Health of our Democracy offers a democracy diagnosis and argues that for three main reasons political and constitutional reform must be brought off the sideline and into the centre of the party’s debates about the economy and society.

First, the financial crisis proved it is impossible to divorce the process of decision-making from the decisions that come out the other end. A lack of checks and balances; vested interests; and corruptible individuals all contributed to devastating decisions that have helped encourage a general distrust of elites. Recent government measures on NHS reform and forestry privatisation have attracted criticism for woefully poor process in equal measure to critiques of their merits. If Labour wants to command public confidence in a radical reshaping of the economy and society at a time of stretched public and private funds it will have to take seriously the ‘how’ as well as the ‘what’. As David Judge of the University of Strathclyde has argued, ‘the foundations of authorisation upon which governments claim legitimacy are becoming exposed to and corroded by a vacuum of public disinterest.’

Second, in spite of devolution, by many measures Britain remains the most centralised state in Europe with Whitehall hanging on to the purse strings. As the Reid Foundation has highlighted, the UK has one local councillor for every 2,860 citizens. After the next general election a new government will inherit public services with varying models of democratic governance: free schools answering to Whitehall; police services overseen by locally elected commissioners; and local authorities given responsibility for promoting public health. But options for citizens’ involvement are patchy or often confined to a council’s consultation on one specific local development without any opportunity to debate wider issues.

Another part of the democracy jigsaw is the extent and type of participation we aim for. We know from the latest Hansard Society Audit that 38 per cent of people want to be involved in local decision-making compared with 33 per cent for national decision-making. John Denham argues for this to take shape as ‘grown-up conversations’ in place of confrontation over scarce resources. At the constituency coffee mornings he runs people are able to demonstrate their capability to weigh up tricky decisions over who gets priority on the housing waiting list or who gains or loses from council tax reductions. This deliberative approach chimes with our view that a customer-orientated approach where individuals are engaged in a continual cycle of over-expectation and under-delivery is damaging our politics. Citizens can help shape the big issues – Iceland put people, not politicians, in charge of writing a new constitution. But, as Denham suggests, starting with the ‘bite-sized’ issues that are close to people’s homes and lives is the most practical and relevant arena to start a more general re-engagement of citizens in our democratic institutions.

Third, there are concrete ways in which our democracy diagnosis impacts on Labour and the other parties. Party memberships are in long-term decline (just one in 100 of the electorate are members of a political party, compared to one in every 12 people in 1964). This reflects a general trend whereby voters increasingly see politicians as aliens and tune out from formal politics. Labour is acknowledging this problem by experimenting with alternative models of democratic engagement. Movement for Change, for instance, is helping local activists see citizens as agents of change rather than passive recipients of member-recruitment drives.

Beyond the party, government reforms to voter registration (the most far-reaching since universal franchise was introduced) threaten to make under-registration among young people, tenants in private rented accommodation and certain ethnic minority groups even worse and exacerbate inequalities in who votes and who determines election outcomes. This underlines why Labour cannot afford to detach the nuts and bolts of our democracy from the kind of society it wants to see.

Our report is more diagnosis than cure,  but we strongly prescribe debates about the type of democratic institutions, ‘Devolution Mark 2’ and style of citizens’ involvement (the ‘how’ with the ‘what’) as a given for any party determined to find sustainable solutions to the social, economic and environmental challenges ahead.

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Katie Ghose is chief executive of the Electoral Reform Society