Public services in Wales are already facing a crisis, brought on by economic and demographic factors, exacerbated by a legacy of inequality and disadvantage. As welfare cuts start to bite, the impact will be devastating.

A report by Sheffield Hallam University anticipates that the cuts will result in an average loss of £550 per year for every working adult in Wales – the UK average is £470. And people in the most deprived communities will lose even more – up to £722 per head in Merthyr Tydfil, for example.

What Huw Lewis, the minister for communities and tackling poverty, called the "social atrocity" of the bedroom tax will add immeasurably to the crisis. Research suggests that 28,000 households in Wales are living in "under-occupied" social housing. But there are just 400 one-bedroom properties for them to move to.

Official unemployment is at 8.4% (7.7% for the UK as a whole) and rising; the high percentage of public sector workers in Wales means that we face both loss of jobs and loss of services.

So what do we have going for us? Wales has three advantages. Firstly we remain distinctly left of centre, with a Labour government and an explicitly socialist national party in Plaid Cymru. Consensus remains possible, notably in the recent social services and wellbeing bill, which eschews the market, reasserts the potential of social co-operatives and seeks to "draw on the strengths of people as members of their families, networks and communities".

Second, Wales is small. Just over 3 million people cuts the "six degrees of separation" formula down to two or three. There are easy and multiple connections between citizens, public-service professionals, policy-makers and academics. Politicians are accessible, and it is still possible for ordinary people to influence their thinking and their actions.

Our size also means that ideas can spread rapidly and, in spite of growing competition for a shrinking pot, there remains a willingness to share good practice and to work collaboratively.

Finally, we have a strong tradition of mutuality, co-operation and community. People still look out for each other. They still believe in "collective action to transform society and so lift all of us together". (Aneurin Bevan) This isn't just a nostalgic notion. In the small former mining village of Blaengarw, for example, 30,000 hours are volunteered by the community for the community each year, making it the largest active citizen network in Europe.

This context – small, socialist and strong on community – is providing fertile ground for co-production, a new paradigm for public services.

Co-production involves citizens, communities, and the professionals who support them, pooling their expertise to create more effective and sustainable outcomes. It is based on a philosophy which values individuals, builds upon their own support systems and considers their place in the wider community. This approach requires a move away from service-led or top-down approaches to one of genuine citizen empowerment, involving service-users and their communities in the co-commissioning, co-design, co-delivery and co-evaluation of services.

Despite its flexibility and well-evidenced advantages, co-production is neither easy nor quick to implement. It's a hearts and minds initiative requiring active and explicit support from government.

And here's our trump card. Mark Drakeford, the newly appointed health minister, is a genuine champion of co-production and is working to ensure that co-production principles are placed at the heart of public services in Wales.

More than 250 individuals and organisations are supporting that aspiration through an open letter to the Welsh government. We are asking the Welsh government to enshrine co-production within key legislation, to make it the primary approach to public services, and to ensure that the citizens of Wales truly have a voice – contributing as equal partners to decisions about public service commissioning, design, delivery and evaluation.

Ruth Dineen is founder of All in this Together and director of Co-production Training UK

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