Spending cuts will be tough enough without the social engineering

In today’s Guardian Andy Beckett paints a picture of what Britain might look like in 2015, once the government’s reforms are in full swing. It is a balanced article and he has taken soundings from a number of people with varying points of view. The overall outlook, though, doesn’t look too good. Even Conservatives like Tim Montgomerie sound a note of caution.

What really worries me about the government’s approach is the cumulative effects of trying to do three things at once; cost cutting, reorganisation and social engineering. The NHS is the most extreme example of this but the approach is similar in other public services.

It must by now be beyond all reasonable doubt that the government can’t cut public spending without having a serious impact on public services. Efficiency savings, if they happen at all, will be few and far between and will only have a marginal effect.

Government advisor KPMG claims that there are £60bn worth of savings waiting to be found in the public sector. But read the small print. This estimate is based on ONS statistics for private sector services which showed a 20 percent productivity improvement over a decade. Apply the same rate of savings to the public sector, says KPMG, and it would save £60bn. Or, to put it another way, if the public sector were to improve its productivity by the same rate as private sector service companies did, it would take ten years for it to save £60bn! And George Osborne wants to save £81bn in four years. Ain’t gonna happen is it? At least, not without major cuts in services.

As if that wasn’t bad enough, the government wants to subject much of the state apparatus to major reforms. On its own this will cost a significant amount of money but then comes the third layer of complexity. It wants to hand control of state budgets to people with no previous experience. GPs, bankers and journalists may be good at what they do but handing the management of state assets to them at a time when the country is supposed to be making huge savings seems almost cavalier. Today, the government’s director of immunisation Professor David Salisbury asked ministers to take control of the flu jabs programme away from GPs. I’d be interested to know what he thinks about GPs being given £80bn of the health budget to spend. 

Ideologues might be excited about Britain becoming “the West’s test tube” but whacky experiments like these are unlikely to deliver either better public services or reduced spending. At least for the first few years, they will cost more than they deliver.

By 2015, then, the public sector will probably look something like a mad professor’s lab, with a number of half-finished experiments and projects-in-progress littering the floor. Worse still, the costs of carrying out these experiments may mean that the fiscal targets are missed or that more money has to be cut to meet them.

Over the next decade, Britain has to cut the cost of its public services. Few people argue with that. But doing it will be tough and it will take people a while to come to terms with the material and psychological shock that major cuts to services will bring. On top of all this, our public services do not need the increased pressure of expensive social experiments. These reforms are unnecessary and will almost certainly counterproductive. If politicians want to experiment, the electorate may well tell them where to shove their test tubes, come the next election.

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One Response to Spending cuts will be tough enough without the social engineering

  1. Pingback: Spending cuts will be tough enough without the social engineering - Rick - Member Blogs - HR Blogs - HR Space from Personnel Today and Xpert HR

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