Thursday, June 05, 2008

Waste not, want not

David Craig is a man who writes books about public sector waste, primarily in the areas of consultancy and IT systems. He has written an article advising David Cameron on how to save money called 'the easy way to save £50 billion'. He says that it is possible to do this without harming public services.

When someone has an argument like this, I tend to look to see if what they have to say makes sense in the areas where I know a little bit about the subject. I know nothing about IT consultancy procurement, so I'll skip the bits about reducing use of IT consultancy, and pick it up at the point where he argues that we should:

'Impose a three-year pay freeze on all public-sector employees earning more than £50,000 a year, tax their retirement lump sums and introduce a special pensions savings tax to make their generous pensions self-financing rather than paid for out of our taxes - about £2.5bn.'

Highly paid public sector employees are an easy target, but one thing worth remembering is that a bad manager in the public sector has the ability to waste enormous sums of public money, and a good one to save similarly large sums of money. Compare the best headteachers, local authority directors or top police officers to the worst, and the point is clear. So Mr Craig's idea of 'forcing all the talented managers out of the public sector and into the private and voluntary sectors' is more likely to involve greater levels of waste, certainly won't save anything like £2.5 billion, and will have a substantial negative effect on the public services.

Next up is, "Reduce benefits fraud, halve the number receiving invalidity benefits and make housing benefits only payable after the age of 21 - probably another £10bn."

Nice use of the word 'probably'. Halving the number of people receiving incapacity benefit is either just about changing the name of the benefit and paying people less or getting them into work. If the former, then there's an effect on public service (making sick and disabled people poorer), if the latter, it actually involves spending more money, not less. Throw in an increase in the number of young people sleeping rough and it's another terrible idea.

Skipping the EU, the next one is "Cut the number of non-teaching education staff by 30 per cent - at least another billion."

a.k.a. 'sack loads of teaching assistants and make teachers do masses more admin'. If you want a laugh, mention this idea to any teacher and explain that someone on the internet thinks that this wouldn't have any effect on their ability to do their teaching.

Then he gets back on to the audit office, IT systems and ID cards, and finishes with 'we should hand the Olympics back to Greece'.

Now either this article was half things that Mr Craig knows about to do with IT procurement, and to pad it out he's copied the other half about public services from the Taxpayers' Alliance on the basis that people who want to read about waste in government aren't going to be too fussed if he uncritically includes a chunk of right-wing prejudices and spin. Or, all the rest of what he's got to say is as big a load of nonsense as it is on education, welfare and public sector management. Either way, his article proves the exact opposite of what he is trying to argue - big cuts in public spending will have a significant impact on public services.

1 Comments:

At 12:28 pm , Anonymous harrythehorse said...

Impose a three-year pay freeze on all public-sector employees earning more than £50,000 a year, tax their retirement lump sums and introduce a special pensions savings tax to make their generous pensions self-financing rather than paid for out of our taxes - about £2.5bn

Free-marketeers do seem to suspend their belief in market forces when talking about pay in the public sector. 50K really isn't a big pay packet in middle/senior management or professional careers. It is undoubtedly below what a competent person could earn in the private sector. I know this as a fact, having worked in both public and private sectors over the past 20 years. Attacking their pension provision, which makes the relatively poor pay a bit more acceptable, just means that he is incentivising its best senior people to leave. I do not see how that is not going to have a negative effect on the provision of service or on the efficent spending on public money. It would add extra complexity to the tax system, with special codes for public employees. It would be tied up in the courts for years as it faced legal challenge. It's just totally barking.

He is of course completely right about cancelling the ID Cards programme. But just like stopped clocks can tell the right time twice a day so nutty libertarians can occasionally be right.

 

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