The Futility Monster

He'll pointlessly derive more enjoyment out of your resources than you

Posts Tagged ‘public sector’

We’re All In This Together… Unless You’re A Business

Posted by The Futility Monster on June 23, 2010 @ 09:31

Aren't they a happy lot?

We’ve had many pro-business budgets in the past, but this one truly went out of its way to suck it up to them. After all, when was the last time you heard the CBI gush with such force about a government:

The Chancellor has achieved his twin objectives of setting out a credible plan for the public finances and producing a convincing growth strategy for the longer-term

Oh, yes, George! And all this before anything has actually changed yet.

It’s simple. There isn’t a single thing in the Budget that would have any negative impact on the business community. What’s that about VAT, you say? But most businesses, certainly the ones that employ people, claim back all input VAT anyway. And giving them till next January to plan for it eases the burden even further.

It’s those businesses that are more than one-man bands that are going to revel most in the plan to cut small companies’ corporation tax to 20%. And those medium and bigger businesses will also benefit from the year on year falls in corporation tax.

Then there is the changes to NI, which included a minor change to the thresholds, a reversing of Labour’s planned NI rise on employers, and an incentive scheme to encourage businesses to employ people outside the South East and London by reducing employers’ NI to zero on the first ten employees.

Meanwhile, the Capital Gains Tax rise on those who enjoy these kind of things was much less than it should have been, and George Osborne greatly improved an allowance for “entrepreneurs”, now allowing them to dispose of businesses at a very generous CGT rate of 10% below £5m.

Yes, banks are being hit… but even they didn’t seem too bothered. Very small ones will be exempted, and to them it may be a small price worth paying for the fact that they wouldn’t be in existence today but for the government. Furthermore, many of them are likely to play ball, keeping their powder dry for the bigger battle regarding breaking them up into smaller entities.

In other words, the totality of this package is the coalition saying to the private sector: we’ve done our bit, now get us out of this mess.

The question really is whether private sector growth is going to come roaring back to such an extent that it will make up for the withdrawal of 25% of the budget in all departments bar health and international development. It is also whether those cuts, which will affect public sector jobs, public sector wages and many private sector contracted-out jobs which rely on the public sector, will affect people’s spending and consumption. Coupled with the VAT rise, it simply has to.

George Osborne’s gamble appears to be that the public and private sector are in a zero-sum game. That’s a big enough risk on its own, without even considering the fact that the private sector is really not ready, willing or even able to prop up this stagnant economy.

Hold onto your hats…


Posted in Musings | Tagged: , , , , , , | 6 Comments »

In Defence Of The Public Sector

Posted by The Futility Monster on May 21, 2010 @ 17:19

My favourite picture of all time. OF ALL TIME.

Over the next few years we’re going to hear more about the “unproductive” part of our economy. We will hear endlessly about how it is pain-free to eliminate jobs from the public sector because they’re not “real” jobs anyway. Indeed, a tortured logic might even argue that rather than the government paying someone a certain amount of cash per year as a salary, they could pay them far less in benefits.

It’s not an argument I’ve ever heard, in truth. I thought it up now. In pure cash terms, its logic is probably unbeatable. I should have been an economist.

But the real point of today’s rant is to fight back against this concept that private sector jobs are the only ones that are productive. The private sector raises the taxes that pay for all those public sector fripperies that we spend over £600bn a year on.

The problem with this argument is that it assumes the private sector exists in glorious isolation. Free, untrammelled, providing the state with a glorious worry and risk-free treasure trove of cash to squander on the poor and feckless.

The private sector cannot provide reasonable and affordable healthcare for the masses. America proves that. Without health, there is no economy. If workers die young, or from preventable illnesses, then the private sector has no one to do its dirty work in the first place. Healthcare requires a huge range of healthcare professionals, from the humble social workers providing care in the community, to the consultant cardiologist earning a six figure salary.

The private sector cannot provide a decent basic level of education. Without education in the first place, none of those doctors and nurses will exist. In that sense, education is more important than all of them. That means we need teachers, teaching assistants and other educational welfare providers. That all needs paying for. Those workers don’t just arrive at the doors of private sector firms magically able to read, write and have a multitude of other skills ready to go.

Then there is order. Who provides it? Certainly not Securicor. We need a network of people to execute and judge the law. Oh, and then make attempts to rehabilitate the offenders, no matter how badly that system works at the moment. Without order, there is no society. Without society, there is no economy.

I could go on. Who built the railways? Who built the roads? Who rescued the entire banking sector from collapse when the private sector had fucked the whole thing up?

But there is one bit underpinning all this. The bit that everyone thinks we can just slash and burn without any impact.

The bureaucrats.

Teachers don’t organise themselves. Healthcare professionals don’t. After all, we want the professionals on the “front line” (we’ll hear that one a lot too) to be actually doing the thing they’ve been trained and want to do. We don’t want doctors having to co-ordinate shift patterns between themselves. We don’t want nurses to have to worry about when the order for vaccines should be placed, and from which provider it should come from to reduce the costs involved. We don’t want teachers having to manage a database of names and attendance records to monitor whether the children that are supposed to be in education are actually there.

The civil service is the glue that binds all of the necessary functions together. Someone has to do the administration. Someone has to organise the lot. Someone has to co-ordinate the parts that overlap and interact. Someone needs to try and do the “joined-up government” that we all wish for.

That’s not to deny that there aren’t efficiencies that could be made. Of course there are. Anyone who says otherwise is lying. My head gets filled with anecdotes on a daily basis from the civil servants I know about the waste and mismanagement.

But let’s not assume that the simple answer to saving money is simply to get rid of the people in the back office. We need to be way more clever than that.

Because if we’re not, those very same “front-line services” that the coalition government love so much are going to take one hell of a beating, intentionally or otherwise.

Posted in Musings | Tagged: , , , , , , | 1 Comment »

The Recession Will Be ‘W’ Shaped

Posted by The Futility Monster on November 12, 2009 @ 10:11

Here's something else that's W shaped. Thanks, George.

Here's something else that's W shaped. Thanks, George.

Much ink has been spilled over what letter or symbol is best used to describe what the recession will be like. Some have said it will be a V –  a sharp drop followed by a sharp increase. Or maybe it’ll be a U, a sharp drop, followed by a prolonged stagnation, followed by a sharp rise.

But the most depressing of all is the idea of a W shaped recession, which is basically two Vs put together: a sharp drop, followed by a sharp rise, but not one that recovers the loss… and then a similar decline on the other side, before a final recovery. Only the problem is that to return to the square one, at the very start of the W, takes a huge length of time.

So far, the recession has been very much a plunge into the V. Or a U. There is some sign that we have bottomed out… as the latest GDP figures suggested. Bank of England governor Mervyn King also reckons that the recovery has “only just started”.

But the question remains… is this a sustainable recovery, or is it just the eye of the storm?

To me, with the horrendous spending round that’s on the way starting next year, there can only be one answer.

This is going to get worse before it gets better.

The private sector recession has been well under way. The economy has collapsed by about 5% since the start of it. We’ve seen local and national businesses go bust. But the public sector has carried on regardless.

Of course, to us Keynesians, that’s not a problem. In fact, public sector spending is supposed to make up the slack when the private sector goes into retreat. That, along with more spending on unemployment benefit, is supposed to make sure the worst edges of the recession are smoothed sufficiently.

Which makes you think: if the government hadn’t been spending, just how much more of a dip would there have been beyond 5%?

And there is the problem. Because, from next year, the government is going to have to stop spending. We’ve heard of the scale of the bloodbath the Tories, the Lib Dems and even Labour are planning. There is going to have to be public sector wage restraint, if not job losses, and whole programmes are going to be removed. Others curtailed.

That retrenchment will exert a further downward pressure on GDP. That public sector recession will be what definitively brings home of the strain of the recession to most people. Because, let’s face it, a lot of people have done well out of this recession. Low interest rates, falling prices… for those who looked after their finances in the good years, didn’t live beyond their means, they’ve had a very good time.

That, in a nutshell, is why the Tory claim that Labour didn’t mend the roof while the sun is shining is so deadly. Every individual and family knows from their own finances that you can’t live beyond your means forever.

Which is exactly what the government has done. They have spent and spent and spent in the good years. Maybe a lot of it was necessary. But they haven’t been honest about how to pay for the increased spending on health and education. We can’t have European style public services on an American tax take.

And now all of that spending is going to have to stop.

Before the private sector recovery has properly begun. And how can a private sector recovery be sustained if millions of public sector workers are suddenly tightening their belts?

This period of uncertainty in the economy is far from over.

Posted in Musings | Tagged: , , , , , , , | 3 Comments »

How To Sack A Civil Servant

Posted by The Futility Monster on September 15, 2009 @ 06:30

Of course, before this scenario is enacted, one has to comply with all relevant legislation and conduct a through job performance evaluation, attaching appropriate, relevant, unbiased evidence over a period of time...

Of course, before this scenario is enacted, one has to comply with all relevant legislation and conduct a through job performance evaluation, attaching appropriate, relevant, unbiased evidence over a period of time...

As someone with many contacts who work in the civil service, this morning’s article on BBC News about bureaucrats having “no fear of the sack” is particularly interesting.

The article only talks about “senior” civil servants. But I can assure you all that the article is applicable across the entire service.

The problem seems to be that, unless the member of staff commits obvious gross misconduct, or is actually removed through genuine redundancy, a job in the civil service is extraordinarily well protected, regardless of performance level.

Now, I’m not so miserable as to be calling for more and more people to be sacked… but there does come a point where the tales I hear make me wonder just how some idiots got jobs in the first place.

There is a government agency that is current very high in the news agenda. It has, like most departments, got lots and lots of staff.

I understand from my sources that a significant number of these staff are incompetent. In any other half-decent private sector organisation they would have been moved on by now for the fact that they simply cannot do their job. It’s not that they are not trained sufficiently; it is simply a grave error that they were employed in the first place, a failure to weed out the brain dead at interview stage. This tends to happen when a new agency is formed – a large wave of recruitment washes onshore a great deal of debris.

And getting rid of them is a challenge any line manager would avoid like the plague. The procedures for getting someone sacked are long and onerous. Most managers don’t tend to stick around for long enough to see them through, and in any case the managers may actually be too close to those underneath them to want to do anything about it, such is the nature of the hierarchy in the agency in question. (We’re talking about an EO wanting to sack an AO)

Even if they did want to do something about it, they are open to challenge at every turn, facing union action and legal procedures that most sane people just wouldn’t want to trouble themselves with at work. Particularly if their days are stressful enough as it is.

So the incompetence remains, badly affecting the performance of the agency. Some cracks are papered over, but not without the effort of the better staff, upon whom extra work falls in order to make up for the shortfall.

My sources also confirm that, as in the news article above, the problem is very much one in senior management too. The SEOs and Grade 7s are frequently “moved sideways” if it appears they are unable to do their job, upon which time they will simply unleash their idiocy on another section of the agency.

That’s not to say the private sector is a beacon of human resources best practice. Some places are just as bad.

But when it comes to the vital question of whether taxpayers’ money is being spent on delivering efficient and effective public services, there is an endemic culture of tolerating failure that needs a thorough examination.

Posted in Musings | Tagged: , , , , , , , | Leave a Comment »

Even Public Sector Workers Want Cuts

Posted by The Futility Monster on September 14, 2009 @ 12:30

Any recession that involved these things would be very welcome, and would remind me of my long, lost childhood.

Any recession that involved these things would be very welcome, and would remind me of my long, lost childhood.

Yesterday’s papers were filled with comment on a poll carried out by YouGov for the Policy Exchange think tank. Most of them focused on trust in government, but, as is always the case with these polls, there was a little more to it than they could fit in the headlines.

The full details of the poll are available directly from the Policy Exchange site.

I’ve had a quick look through the figures, and this question caught my eye:

Spending on public services such as schools, hospitals and the police has risen sharply in the past ten years. Overall, how much of the money do you think has been wasted on such things as bureaucracy paperwork and penpushing?

First of all, questions like this bug me. I don’t like to read too much into them, because they are explicitly negative and almost invite the respondent to join in the browbeating of government. The media have conditioned us to “hate” bureaucracy, as if to say that any money spent on administration must be bad. Perhaps they would like doctors and nurses sitting at computers making their own appointments, booking patients in, arranging rooms, etc…

But regardless, there is a widespread impression that vast swathes of government spending goes to feed the paperwork monster (my cousin, I think). This has been true for years and will continue to be so no matter which government is in power. There’s no doubt that fat can be trimmed from the civil service and local government, but the demands of the wider public for such efficiency savings are unrealistic and insatiable.

So this result is not surprising:

  • A lot: 62%
  • A fair amount: 22%

The next result, however, is more interesting. Instead of it being the result of the entire sample, it drilled down to only include those who worked for the public sector…

  • A lot: 59%
  • A fair amount: 25%

Overall, the same percentage in these two responses as there was for the entire sample.

In other words, the public sector workers, those who see the waste on a daily basis, are just as likely to be fed up with spending on needless things as the general population. One might have expected the public sector worker to be more defensive of their line of work. They have often been considered Labour’s “payroll vote”… but if even they are getting fed up, I think the battle is already lost.

Cuts are on their way. Even Lord Mandelson has admitted it today… in ways which might even excite the Labour Party, especially if he cancels Trident.

The final remaining political point of interest is this… when the public sector recession begins, will it be so severe that it does indeed cause the dreaded “double-dip”, W-shaped, recession?

If so, the Tories are going to have an extremely bumpy ride in their first couple of years in office.

Posted in Musings | Tagged: , , , , , , , | Leave a Comment »

Labour Builds A Strawman

Posted by The Futility Monster on September 4, 2009 @ 06:30

I was toying with a picture of Worzel Gummidge, but I wasn't sure if people would remember him. In any case, he used to scare the hell out of me.

I was toying with a picture of Worzel Gummidge, but I wasn't sure if people would remember him. In any case, he used to scare the hell out of me.

When I first read about the “plan” to slash health spending on frontline staff yesterday I didn’t really think all that much about it. It was just another contribution to the debate.

But with hindsight, I was wrong.

It’s all so convenient. Government department asks management consultants (evil, evil people!) to come up with ways of saving money. Management consultants (who are evil, by the way) co-incidentally suggest cutting 10% (heard that number before?) off the budget. But not just any old cut – a cut directly on the frontline staff. Labour government rejects the plan. Then they take the credit for rejecting something that only really existed in the mind of a PR man/woman.

Now, excuse my cynicism, but it all just fits together too nicely. Labour gets a chance to rail against management consultants, whom no one has a favourable opinion of, and also gets the very fortunate opportunity to talk about their real plans to defend the health service from cuts as a result. Oh, and by the way, they also get to talk about the 10% cuts figure again… subconsciously planting the idea, once more, that the Tory plan is going to be bad. Even better, it now associates the Tory plan with management consultants.

If that all seems a bit too stretched, too much to believe, then I think you may be a touch naive. Politicians in this day and age plan media attacks to the letter, co-ordinating them with any compliant media they can get their hands on. Obfuscating the neutrality of the attack by using think tanks, pressure groups and so-called “independent” reports from experts or inquiries is also an essential part of the strategy.

In this case, it was a clever leak to the Health Service Journal. Note that the BBC article implies that the government also invited other management consultants to suggest ideas for savings. How come they haven’t been leaked too? Why cherrypick the 10% one for the spin exercise? Well, it’s obvious now isn’t it.

What this story does suggest though is that Labour still haven’t got it. Contrary to recent expectations that we are over the worst of it, the British economy is still in crisis. The government is going to have to borrow more than it predicted, saddling us with even greater debt, a burden to be passed on to future generations – all at a bad time when the costs of the public sector, and the pension and benefits systems, are just overwhelming.

But even if we accept this story at face value, the conclusion is that Labour is indeed planning for significant cuts in services. That’s somewhat contrary to their public image of Labour investment vs Tory cuts.

Either way: Labour’s demise continues.

Posted in Musings | Tagged: , , , , , , , , , , | Leave a Comment »

In The Know, In A Knot

Posted by The Futility Monster on August 31, 2009 @ 09:32

Changing the public sector spending habits is going to be quite a battle...

Changing the public sector's spending habits is going to be quite a battle...

While I was caught up in my sudden rush of greenmoaning – a topic I will doubtless return to in the future – I didn’t get a chance to post about an initiative being launched by the Lib Dems.

It’s called In The Know, which, I’ve gotta say, is an appalling name. It always helps if a name actually tells you something about what it’s going to do. This project is about asking people “in the know” for ideas to cut the bill of the public sector on the taxpayer. So surely it should have been called something like Saving Taxpayers’ Money, and launched it in a blaze of publicity with Martin Lewis of I don’t know. I’m not paid to think up PR ideas…

Now… superficially it seems such a simple idea. Ask the public sector workers to trim the fat that they see every day. And, I assure you, they do see it. This is not just yet another of my posts whinging about how expenditure is going to have to be slashed and burned in the coming years.

No… it is too much of a coincidence that every public sector worker I’ve ever talked to – and there are many these days – will tell me about something that is a huge waste of money. From spending on specifically designed chairs for employees, to outrageously good, and unquestioned, sick leave. From jolly after jolly in first class to London and back, to a “go slow” work culture during the week so that overtime is offered, at 1.5 time or 1.75 time, at weekends.

This simply isn’t good enough. I know some parts of the public sector work incredibly hard and get poorly compensated. One such example is teaching assistants, whose pay is shocking for the responsibilities they have. Some say this is why the public sector has such good “other” perks to the job, like more holiday leave, more understanding for all time off, huge flexibility in working hours… to make up for bad pay.

I’m not “in the know” enough myself to know if this is true. But the examples of frittering taxpayers’ money are just numerous.

One might expect, then, that In The Know will be inundated with ideas for how to trim the fat. I even spoke to my dad, a civil servant at HEO grade, and said that he should submit some of his experiences to the site.

Unfortunately, I don’t think he will. And similarly, I don’t think many other people will either.

The prime reason is that In The Know has no incentives. In this age where capitalism is king, it is probably not enough to expect people to submit ideas which could save hundreds to thousands of pounds purely out of the goodness of their hearts.

There should have been some sort of competition attached. All genuine ideas submitted should be entered into a competition with several winners picked at random. On top of that, there should also have been a prize for the idea that would save the most amount of money.

Because there’s nothing ideological about this. There’s nothing stopping the Tories or even Labour launching a similar campaign within weeks. And if they launch theirs with incentives, the Lib Dems are going to look even more of an irrelevance than usual.

Once again, a good PR opportunity wasted.

But then again, I’m not paid to think up PR ideas.

I wish I was.

Posted in Musings | Tagged: , , , , , | Leave a Comment »

Cuts, Cuts, Cuts

Posted by The Futility Monster on July 11, 2009 @ 17:22

Who Has The Finest Pair? (I'm talking about scissors, Obama!)

Who Has The Finest Pair? (I'm talking about scissors, Obama!)

In case you’ve been asleep through boredom at all recent Prime Minister’s Questions, the political rhetoric is all full of who will be the nastiest public spending cutter at the moment. Labour say the Tories want to shave 10% off various government budgets. The Tories say Labour are planning cuts but Gordon Brown won’t admit to them. The Lib Dems are saying they want cuts, but nobody really gives a fig. Meanwhile, the Civil Service is allegedly preparing for up to 20% cuts in the wake of an election.

In other words, there appears, at last, to be a consensus that current levels of spending are unsustainable. We are entering into extremely uncertain times as a result of that. One can imagine how the public sector unions are going to respond if there are talks of massive job cuts – but I don’t think it will come to that. The axe will fall – but without a doubt after the next election when a new government is at its most legitimate and virile; confident that its recent backing in the polls will give it the power to squelch all opposition.

Of course, we all know the Conservatives are going to win next time, either big or small – but it will be a victory. I think their boldness will very much depend on the size of their majority and alleged “mandate”.  But either way, I genuinely don’t believe the Conservatives will be able to unravel the huge depths of Whitehall bureaucracy at the stroke of a pen. I very much expect some token abolitions which attack the voiceless in society: perhaps SureStart is in trouble, as would be any funding for youth projects, or prison rehabilitation. But nothing so initially inflammatory that would cause all the unions to unite in a campaign to damage Cameron before he’s even begun. No – he is far too clever for that.

He knows that his victory will be played out in the long run. One election win will very probably lead to another – unless Tory tinkering happens to seriously damage the economy. That gives him at least eight years to put his agenda into place.

But what of Labour? What if, by some miracle, they pull this one out of the fire? Well, Alistair Darling has gone on record contradicting Brown to some degree, saying he will outline his cuts before the next election.

In all honesty, he had no choice. But if even Labour are now admitting the state will need to be snipped, it gives the Conservatives plenty of cover for their arguments. It’s going to make a cost-cutting, job-cutting mandate at the next election even harder to protest against when the new government tries to put its agenda in place.

There appears to be no two-ways about it.

The public sector is about to get the shock of a lifetime.

Posted in Musings | Tagged: , , , , , , , | 1 Comment »