Italy’s election delivered a decisive result, but now clarity on public services will be needed

The Italian election delivered no surprises. At 2:30am last Monday, a victorious Giorgia Meloni stepped on stage in front of a crowd of cheering supporters. In the front row you could make out the party top brass hugging and clapping; most of them have worked alongside Ms. Meloni for many years and have seen the party transform and grow from 4% in the polls to election winner and coalition leader.   

In a heated snap campaign running through August and September, party leaders traded blows primarily over the economy, Europe, and the welfare state. Missing from the discussion were public services and policies to improve their delivery and quality.

With Meloni now poised to lead the next government as Prime Minister, she has made her priorities clear: taming energy prices, growing the economy through tax cuts, and re-asserting Italy’s role in the EU. Public services have not been hugely prominent so far.

Likewise in the lead up to the election, both the Italian political discussion and the international commentary chose to focus elsewhere. The Italian press concentrated on ideological differences and coalition rumours, while the international narrative was centred around Meloni’s rapid rise to the top of the polls.

That of course doesn’t mean that Italian public services are not extremely important. Nor does it mean that they are not in need or want of reform.

Italy has high levels of public debt, very high government spending and a complex bureaucracy. There is a good deal of room for innovation and opportunities to maximise efficiency.  

And this has not gone unrecognised. The outgoing Draghi cabinet passed a law to improve competition in public services. This law was introduced to comply with EU objectives; these were the regulatory reform targets set by the European Commission to allow Italy to access the €260 billion it was assigned as part of the post-covid EU Recovery Plan. Article 2 of this law directs the government to establish a centralised system for procurement to simplify tendering procedures and improve transparency. Responsibility for the management of this new system is given to the Ministry of Economics and Finance, and the law authorises spending of €3 million over the next two years for the set-up and running of it.

As with many highly technical policy issues, despite being hugely significant, this law went, for the most part, under the radar. Indeed, compliance with EU reform targets often becomes process driven, and lacking in holistic vision of how to integrate and operationalise reforms which, in principle, could make a difference. In fact, for these latest reforms, there is still a lot of detail be published – about a third of all ‘secondary legislation’ (the enabling laws) are yet to be published.

Meloni’s future cabinet is likely to include many former Ministers from the Berlusconi years and, with them, a political milieu of reformers, changes in public services are on the horizon, even if they are not centre stage right now.

With tightening budgets, but stable or even growing pressures on many public services, modernising reforms will be needed if delivery is going to match demand. The key to these modernising reforms will be through greater transparency, openness and competition, ensuring the best of the public and private sectors can collaborate to deliver for citizens.

Independent research by Capital Economics, based on case studies and modelling in the UK, shows that when services are competed, this brings about savings of around 5% to 15%, with no discernible impact on quality and often improving it. There is no reason that such reforms in Italy can’t yield the same, if not greater results.

Public services are the elephant in the room of Italy’s election: in a country that has government spending currently standing at over 50% of GDP, reducing the cost of public services and improving their quality should be at the centre of the debate. What direction the future Meloni government takes on public services is yet to be seen. Doubtless that if her plan to “lift up” Italy starts to bear fruit, the discussion on public services will begin to move to the foreground.

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