Cutting public spending could be so easy

When waste, needless programmes, stupid jobs, pointless regulation, poor efficiency and rampant feather bedding are rife in an organisation, cutting costs is not only easy but rapidly makes the service better.

In the Sunday papers there was talk of having to cut 10% off total spending. That would not be difficult, nor need it be painful. As an MP who spends more than a third less than the average on running my office, if I had to cut another 10% that would just mean cancelling two of the three editions of the free newspaper each year, hardly a painful cut. Why haven’t I done that already you ask – because I promised to send one out each year when last seeking election, and have more recently consulted on whether I should cut it or not and been told No. I will propose no such spending commitment at the next election, given the financial climate.

In the 1990s when I was a Minister public spending was under much better control than today. The system was leaner and more efficient. Nonetheless,, coming in from running a cost conscious large industrial quoted company, I was shocked by just how much waste and inefficiency there was. I had far too many staff and far too big a budget in each department, and set about in each case getting it under control.

The Day One diary in a new department for any Minister has to include:

1. Impose a staff recruitment freeze – any new person recruited from otuside should require personal Ministerial approval following a submission showing why they cannot be appointed from within and posts removed.
2. Impose a freeze on new consultancy contracts. The Minister should say any request for him to give an answer on a new proposed consultancy contract will take him at least as long as it takes the department to answer the average letter from a member of the public. The answer will usually be as helpful!
3. Cancel most of the newspapers, magazines, tv subscriptions and other similar bought in items for the private office, and then ask senior officials to review their purchasing of the same. Tell them to run down their often huge stocks of paper, computer supplies, pens , paper clips and the rest.
4. Cancel all foreign trips and say you are going to sort out the mess at home first – unless you are in the Foreign office or helping the export drive.
5.With colleagues announce that no new recruit – if any are allowed – will be able to join the existing generous pension scheme.They will be offered a money pruchase scheme instead with a defined employer contribution.
6. Put into the diary a series of meetings to review all main areas of cost, with the purpose of closing down the inessential and making the necessary more efficient.
7. Call in all CEOs of quangos and related bodies, review their corporate plans, set them cost reduction targets or prepare them for abolition of their body.

When I was responsible for Companies House as a Minister, we had a typical public service efficiency and service quality problem. When I took it over there was large backlog of unopened post. This meant large amounts of information about companies that should have been on file was not available to the public, making it a very poor service. I was told we needed more staff to open the post.

We appointed a new CEO. I then discussed how we could remove the backlog with no extra staff. Our agreed approach was simple. We set the workforce a target to open susbtantially more post than they had been opening and filing each day, and said they could go home when they had achieved the new target. They started going home early, and the backlog fell sharply! We had probably underpitched the efficiency gain we knew they could achieve, but both sides were happy and the taxpayer was saved a big additional bill.

We need to do that or variants of it on a huge scale across the public sector.


  1. Johnny Norfolk
    May 4, 2009

    We all understand how important this is except the Labour government. They have no understanding of wealth creation. Controling what you spend is number one on the agenda of any sucsessful business.

    1. Sir Graphus
      May 5, 2009

      Yes; that was the most striking feature of this budget. We all believe that the state spends too much, and that the state is too endebted, and we used to imagine that, in some way, the govt understood this, and that at least some of the silliest schemes for spending public money would have to be ditched. Then Darling stood up and made it fundamentally, breathtakingly expensively clear, that they did not indeed understand it at all.

  2. Stan francis(Bromsgrove independent)
    May 4, 2009

    Trying to see how you managed to get more post opened John?….you could only have done that due to the workforce already being on a go slow and you threatening they must do more before they go home and you got away with that 21st century??…if they weren’t on a go slow then how did they manage to open more post, did they then go slow on something else they should be doing so that then had to be attended to later on, called trying to catch ones own tail?..note no ranting today John!
    Can you answer this question from my grandson who reads yours, wait for it John and most others on Quango’s. How do they come into fruition, who agrees to paying them and what form do you make out first?..he’s also been watching been watching some political comedian on You Tube, no not Gordon, on areas of land that are not mentioned on maps, these areas are areas of secrecy, so he says, the gov’t and opposition say if they want to cut back on expenditure, surely these secretive areas could be closed down, or is it stuff of the 23rd century where we all become zombies…this is the attitude of a 14 year old by the way and it’s recent gov’t’s that’s making children look ahead in such a way that’s now making adults feel, well hang on here, have I been in limbo all these years?..sorry John may have gone into a rant there?….Let’s hope we see more Independent candidates out there these County Elections?

    1. Johnny Norfolk
      May 4, 2009

      You find that everytime you put the work force on ” job & Finish” productivity goes up. Or an early finish bonus also works. People like to be rewarded with pay or extra time off.
      However labour just pays more for no increase in productivity. Another reason why we are in the mess we are in.

      1. But like I said, what about these secretive places that take £Millions of our money we never see on the balance sheet rthat’s about to give us 45% tax?…..also what happended to job description in the interview and being paid for that and not later trying to rewrite the contract?..Job and Finish?…another misnomer?…called really idle, plain idle and forgot what it’s like to be out of work….Decided to add the web site to show many of US that will do more than write to MP’s..Here in Bromsgrove there have been many more Election nomination applications going out than in the past, I hope this means that coalitions(proportional representation) will be the norm for ALL our futures, for surely as night follows day the present system of all one KIND does not work and that apathy and brainwashing is also a thing of the past, that people take stock and vote for themselves and not a party, that we get rid of District and Parish Council’s that cost us triple costs and form Unitary’s…won’t go down well here with our John, but independents still believe in FREE SPEECH, a fair wage for a days toil and cost effective services to th public-if this country is looking for REVOLT, let it continue in the same vein and we’ll see it VERY SOON…I SAY DON’T WAIT AROUND AND SEE WHAT HAPPENS, make it happen yourself?! …This will no doubt be termed as RANT by John?

      2. ……I would like to know why so many people have views, strong views, but no real names applied, what happened to the STAND UP AND BE COUNTED?..this country is the way it is because of people that will not go the extra mile and do something, type it out on a keyboard and that’s your lot-I am very glad that many are now saying, I can change it and I will chnage it, I will no longer follow somone that’s lost the map!

  3. backofanenvelope
    May 4, 2009

    No doubt all that you suggest is very worthy. But do you really think it will be enough? The size and activities of the state have to be reduced and bigger thoughts are required from the Tories.

    reply: Watch this space – more coming this week on what else to cut.

    1. Freddy
      May 4, 2009

      “Watch this space – more coming this week on what else to cut.”

      You, I believe.
      Cameron ? I simply have no idea.

  4. gyges
    May 4, 2009

    You say, “pointless regulation” but how would you stop EU regulation?

    This is part of the wider question: a large number of politicians are critical of Europa and make sweeping statements about regulations etc but they never explain how they will derogate from such regulations without seceding from the EU Treaty(ies).

    Can you spend some time explaining how you carry out this process, please?

    1. Freddy
      May 4, 2009

      I keep seeing articles about how everyone else in Europe passes the minimum amount of national law necessary to comply with EU regulations (and then ignores most of those laws). By contrast, here in the UK, the Civil Service is prone to gold-plate those EU Directives when implementing them into British law.
      So, it seems to me that one of the things a new Tory Government could do in its first 100 days would be to launch a program of “lead-plating” – take every UK law implementing an EU directive, and rewrite it to the absolute minimum necessary to comply with the Directive. (And minimise any powers and resources for enforcement of those laws, and penalties for infringing them.)
      Of course, the real solution is to reduce the amount of EU nonsense we are forced to swallow, but that is a longer term problem.
      “Lead-plating” could have immediate benefits, and could help business pull us out of this mess.

      1. Denis Cooper
        May 4, 2009

        No, our Parliament – the legislative branch – should just say to the government – the executive branch – “We’re not going to allow this”.

        If it’s an EU Directive, which needs to be transposed into British law, our Parliament should decide that no such transposition shall take place.

        If it’s an EU Regulation, which is “directly applicable”, our Parliament should pass legislation saying that this EU Regulation shall not apply within the United Kingdom.

        I know that I’m on safe ground with this, because in 2006 Mr Redwood voted for Bill Cash’s proposed New Clause 17 for the Legislative and Regulatory Reform Bill, and in fact started the debate on it at Column 750 here:

        and he voted for it the next day, Division 239 here:


        ‘(1) An order made under Part 1 containing provision relating to Community treaties, Community instruments or Community obligations shall, notwithstanding the European Communities Act 1972, be binding in any legal proceedings in the United Kingdom.

        (2) In section 1 and this section—

        “Community instruments” and “Community obligations” have the same meaning as in Part 2 of Schedule 1 to the European Communities Act 1972 (c. 68);

        “Community treaties” has the same meaning as in section 1(2) of the European Communities Act 1972.’. — [Mr. Cash.]”

        Moreover he stuck to his guns last year when Bill Cash proposed New Clause 9 for the Bill to approve the Lisbon Treaty, an amendment to affirm and protect the legislative supremacy of our Parliament, Division 120 here:

        “Supremacy of Parliament

        ‘Notwithstanding any provision of the European Communities Act 1972, nothing in this Act shall affect or be construed by any court in the United Kingdom as affecting the supremacy of the United Kingdom Parliament.’.— [Mr. Cash.] ”

        Even though the Tory leadership tried to dissuade “their” MPs from voting for it, on the specious grounds that to do so would “create a constitutional contradiction”.

        1. gyges
          May 5, 2009

          @Dennis Cooper – thanks for your note. This is the sort of thing that I am asking about. And thanks for your comment re: the metric martyrs.

      2. gyges
        May 4, 2009

        @Freddy launch a program of “lead-plating”

        EU laws are implemented in England and Wales by the European Communities Act 1972; more specifically, section 2(1) which provides,

        All such rights, powers, liabilities, obligations and restrictions from time to time created or arising by or under the Treaties, and all such remedies and procedures from time to time provided for by or under the Treaties, as in accordance with the Treaties are without further enactment to be given legal effect or used in the United Kingdom shall be recognised and available in law, and be enforced, allowed and followed accordingly; and the expression “enforceable Community right” and similar expressions shall be read as referring to one to which this subsection applies.

        What you are suggesting is that an incoming government sets out to break the law as laid down by Parliament.

        Look up Factortame.

        I wonder if John was around at the time Factortame and could give us some insight?

        1. Freddy
          May 4, 2009

          “What you are suggesting is that an incoming government sets out to break the law as laid down by Parliament.”

          No, I am not. I am suggesting we do the minimum necessary to comply with the letter of the law.

        2. Denis Cooper
          May 5, 2009

          And you, gyges, should look up “Metric Martyrs”.

    2. Love your description ‘EUROPA’…yes completely frozen over!!

  5. Colin D.
    May 4, 2009

    To your list I would add: get rid of bonus payments. Senior people on outstanding pay should deliver outstanding service commensurate with their pay without the need of ‘carrots’ to further incent them.
    (For junior staff I would retain the possibility of ‘Reward and Recognition’ payments.)
    I would also establish a tight grip on travel costs and related ‘jollies’.

      May 4, 2009

      Good add-ons to the kind of simple businesslike common sense approach for which we have craved!
      To use the well-worn cliche – ‘It’s not rocket science’ – not by a long chalk.
      Not only, across all the departments, would this approach make substantial savings, it would set the culture from Day 1 and other substantial ongoing reviews and savings would follow once members and staff got the message.
      We will be sending a copy of this blog far and wide.

      Our excellent Maltese break from actual blogging was enhanced with the drip of good news coming from Westminster of late via Sky and the Blogoshere! At last we feel confident that Brown and Co have been rumbled by the majority and are on their way to the knackers yard.

      There was much awareness and leg-pulling from overseas guests in our complex. It’s widely known that the British economy has fallen from grace with a bump and there were smirks of Franco-German satisfaction.

      A new bar-room game was invented by the UK residents – ‘Keep ’em Guessing’.
      The gist is that a participant has to talk for 1 minute on any subject he likes but attempt to disorientate the others by making his words at complete odds with his tone of speech and facial expressions.
      Try it. It really is very hard to know whether to believe the sombre words or the upbeat delivery – or vice versa.
      We were reliably informed that the game owes its origins to a recent Youtube posting by a senior British politician!

      Yes a truly excellent fortnight and it’s going to get better for those of us who have long been looking for a shaft of light at the end of a 12 year tunnel but a real nightmare for Mr Brown and his dissolute cronies!

  6. alan
    May 4, 2009

    Mr Redwood.

    Thank you for another interesting article.

    On this anniversary of the election of Mrs T. I do hope the Tories will make more of the situation the tories came into at that time…Brown loves quoting interest rates at 17% etc. why not remind him of what the last Labour Government left:-

    Income tax rate then peaking at 83% incurred from a ridiculously low level of income alongside an investment rate surcharge on bank deposits etc of 15% giving an absurd top tax rate of 98%.

    But then I do hope the Tories will also learn from their mistakes, when in power. So what went wrong? Much analysis has been undertaken, but in my view, arrived at some ten years later when, before Maggie’s final overthrow, was the failure to properly hold former Government Ministers properly to account for their actions (if necessary through the courts) and leave them to continue to poison society with their subversive ideas. This is particularly valid today as then.

    There has to be a full ROYAL COMMISSION into the IRAQ WAR to find out the full truth and to name and proscute those found to have lied to the country causing so many deaths!

    The Economy. A full enquiry conducted by Independent Auditors into every government department and to name and prosecute those identified with any misdeeds

    And also not to give seats in the Lords to Brown or any of his failed government until all the above has been carried out and they have been ‘cleared’.

    Lastly I would love a Tory government to finally tackle the closed shops of the middle classes, particularly in the law and accountancy professions, as had been done with the Trade Unions.

    WHY? can judges only come from the legal profession?

  7. Stuart Fairney
    May 4, 2009

    Outside of immediate combat related expenditure, you could go for a blanket 10% cut on everything. If we are undergoing deflation, that should be easy and anyway, a business or an individual would have to cope, why not government?

    The BBC will accuse you of cuts whether you do so or not, so spike their guns? (Before abolishing the ********)

    A more serious point perhaps, mandatory sunset clauses for every quango in the land whereby they must make a compelling case for their continued existence every two years, or close.

    Oh, and dare I mention welfare reform?

  8. Josh
    May 4, 2009

    Use typewriters to type up letters and save electricty from the computer.

    Every little helps!

  9. ManicBeancounter
    May 4, 2009

    Some of these proposals are worthwhile, but will not amount to much more than one-off savings. The only long-term savings will be pay-freezing and the closing of final salary schemes to new entrants. These will lead to strike action and a long-term depression of morale and hence effectiveness.

    A major problem of the massive increases in public expenditure in the past decade is that it has not been accompanied by similar improvements in the level of service provided. In otherwords productivity has declined. The long-term solution to controlling the public sector is to change the mentality of government from
    “If there is a problem, government should be seen to be doing something about it”, to “government should seek to improve the common welfare, recognising it can impose burdens on society

  10. Acorn
    May 4, 2009

    Don’t forget the public sector trade unions JR. You may have to introduce a massive expansion of Employment Tribunals and Employment Appeals Tribunals. You will be aware that this is the mechanism used by trade unions to prevent productivity changes and any form of staff reductions.

    Like it or not, you have got to make it a lot easier to sack people in the public sector. A whole mess of employment law has been manipulated into a nice little earner for a significant subset of the public sector and trade union officials.

    There are major savings to be made for the taxpayer and the private sector by getting rid of this, not so little, lot.

  11. figurewizard
    May 4, 2009

    In the seven years to 2007; largely thanks to a policy of stealth taxation, net disposable income rose by 29% while personal borrowing in the form of mortgages and consumer credit doubled. The enormous disparity between the value that these two percentages represent disappeared into the public sector. Some of this new money was then recycled in the form of new credits and grants designed to expand welfare dependency in place of more efficient tax cuts. The rest went on expanding budgets, as in the case of the NHS for little or no perceived benefit. In short most of the money was wasted.

    The legacy of this Labour government will be a bloated public sector that has become an unsustainable burden on the taxpayer. While the first step for any new government must be to stabilise costs to deal with the immediate crisis, economic recovery will call for a much more radical approach to public expenditure than we have heard so far. The culture of the inviolability of the public sector that has dominated our politics for the last twelve years must be brought to an end.

  12. Frustrated taxpayer
    May 4, 2009

    I agree with all you have written, but feel that these measures fail to address the cultural malaise in the public sector towards efficient expenditure. Some really positive steps towards cutting waste and inefficiency would be:
    (a) increasing accountability by stengthening the role of the NAO. Stop this pitiful study of failure after it has occurred and turn it in to an organisation more like the US GAO which has considerably more powers – its too late for the PAC to review a disaster after it has occurred, it should be quizzing officials during the projects/programmes/initiatives;
    (b) publish all Gateway report and name the responsible Minister, SRO and other key officials on all major projects – this transparency would rapidly eliminate the nonchelant attitude in Whitehall towards effective management of these projects and programmes;
    (c) publish clear documentation on all cost saving and efficiency measures – lest not have more of the Gershon smoke and mirrors – we want real, bankable reductions in public expenditure.

    All of the above can easily be implemented and will provide real benefits – we need commitment from the future Conservative Government to take these steps, to start winning our trust back, and to demonstrate a real intent to change the way public money is spent. The above measures will not be popular among the Whitehall insiders, but their cosy world needs shaking up and the fresh air created by more publicly available information would help to speed a culture change towards more responsible spending.

  13. Neil Craig
    May 4, 2009

    Wikipedia says John “in 1995 he returned £100,000,000 of Wales’ block grant to the UK treasury unspent following efficiency savings and cost-cutting measures”. I assume total savings were several times that but most of it was used, nore usefully in Wales. On a proportionate basis that sum was £2 billion accross the UK & probably twice that now & multipled again several times because Major clearly did run a much tighter ship than Brown.

    He can credibly talk the talk having walked the cost cutting walk.

    Reply: Yes, I saved more than £100 m and spent the rest of things Wales did need. It is never easy getting them to spend on things people want, as the establishment always wants to spend on itself.

  14. Pat
    May 4, 2009

    How about requiring anyone promoted (as well as any new recruits) leave the pension fund (they receive the pension they’ve already paid for but no more). It would mean paying more salaryn to them (else they wouldn’t apply) but would stop (or at least reduce) the build up of unfunded future obligations. RPI inflation rises would have to be the max. for anyone staying in post.
    Re Stan- the chances are the workforce was on a go slow- just because they’d rather talk to each other than open envelopes. Of course it’s quite likely that they did neglect other activities where there was no incentive. Incentives matter!

  15. Obnoxio The Clown
    May 4, 2009

    5.With colleagues announce that no new recruit – if any are allowed – will be able to join the existing generous pension scheme.They will be offered a money pruchase scheme instead with a defined employer contribution.


    All civil servants (state and county and town) should be told to re-apply for the jobs within 12 months and salaries offered will be slashed by 25% across the board.

    You’re halfway there, John! ;o)

  16. Sterence
    May 4, 2009

    This is an excellent post: thank heavens someone is talking sense at last. Additionally you should insist that there is strong control of public procurement, for instance of IT projects. I would favour having a Cabinet minister responsible for ensuring delivery of projects under budget, with the power to overrule any changes to the specification.
    What are the chances that the Conservative leadership will adopt your excellent policies?

  17. Robert
    May 4, 2009

    I would like to see a short Act of Parliament put through which introduces a sunset clause with regard to the continued existence of all Quangos. As at least half the ministers in any government are no good ie. fall under the sway of their departments, therefore responsibility for executing the sunset clause should be taken by a separate minister whose sole responsibility is cutting costs.

    Obviously the majority of Quangos could be axed but the threat of the axe would make the remainder perform rather more sharply.

    But John , for all these good intentions I have grave doubts whether David Cameron can run anything at all . After all his only work experience was in PR. And if the boss cannot do the hard yards there is no way his ministers will do what is required.

  18. Brigham
    May 4, 2009

    Getting people to work harder and then go home, used to be called piece work. The unions hated it. The only difference was that the workers did more work and got paid more than the layabouts. I remember that in the early 60’s I worked for a cable TV company and we had a meeting to decide if we wanted to be in the ETU. A couple of union officials took questions afterwards. One man stood up and said, “I have two questions for you.” “How long do we have to be in the union before we can have a strike, and what can the union do about a worker that is being victimised for continual lateness.” The union official was taken aback and gave the man short shrift. Later I heard he became a councellor for Hammersmith Council. The questioner that is. He couldn’t see what was wrong with his questions, and this is, to my mind , a typical Labour voter.

  19. mikestallard
    May 4, 2009

    I am so pleased that this thread is devoted to positive and helpful ideas on the most pressing of challenges (State wastage) instead of wasting time on the wretched and doomed government.
    Any day now, it will implode.

    PS Anthony Eden had to handle the Suez Crisis with a temperature of 104. He was a sick man. I wonder myself if Mr Brown isn’t doing the same thing. Is he well? He looks awful.

    1. Brigham
      May 4, 2009

      I don’t think that the PM is physically ill, however, I have thought for a long time he is mentally ill. At first I gave him the benefit of the doubt and believed he just had no social or people skills. Now with his posturing and false grimaces on U tube I think he is teetering on the brink of insanity. His reported mood swings, sudden rages, smirking when being torn off a strip etc., leads me to feel he should be away somewhere quiet and peaceful, and out of the hurly-burly of politics.

  20. The Economic Voice
    May 4, 2009

    Labour don’t want to reduce their spending.

    Their response is always to look for more tax revenue. Where do you stand on their proposal to tax Google to raise money ‘for the BBC’.

  21. John Moss
    May 5, 2009

    5.With colleagues announce that no new recruit – if any are allowed – will be able to join the existing generous pension scheme.They will be offered a money pruchase scheme instead with a defined employer contribution.

    John, to have the moral authority to do this, do you not think that all MPs elected at th enext election should accept the same?

    Reply: Yes, the Conservatives have already proposed that

  22. UK Voter
    May 5, 2009

    Government departments genuinely need more skills from the private sector. Your experience with the new CEO is a prime example. However, you only have to look at any government advertisement and you will find that they use the ‘key skills’ are to exclude the majority of potential applicants, making it something of a close shop. This is simply wrong.

  23. Dr Dan H.
    May 5, 2009

    A good many years ago, I worked on the DSS Year 2000 programme. As a result I got a very good look at the dire and appallingly shoddy nature of Civil Service computer systems and practices. A good example of this was how the Civil Service deals with printers in offices.

    An office printer is a strange beast; it is mechanical, physically moves things and has a finite lifespan. As such a printer can be expected to need consumables and to break down regularly. The DSS solved these problems by using a large number of small office printers dotted about, which works but means you have a lot of money tied up in depreciating assets and need to keep a lot of printer consumables in stock, plus you need people going about fixing and/or swapping out printers.

    Commercial organisations know that this approach is expensive bunkum. Commercial organisations rent in large, high-capacity printers from external companies which specialise in keeping these machines running and operate under strict service level agreements to replace the printers at regular intervals and keep them running come what may.

    The commercial system is cheaper, more efficient and works better than the Civil Service option. Why don’t we implement this instead?

  24. Amanda
    May 5, 2009

    Mr Redwood. Over at the Spectator Coffee House there are some pretty horrific graphs on our finances from the EU Commission’s report -under the item Fiscal collapse.

    Could you please do a resume of just what this has been spent on since 2007. And indeed if any of it at all has been ‘invested’.

  25. Howard
    May 7, 2009

    Systems Thinkers know that by focusing on cost cutting, costs increase and quality goes down.

    In the public sector systems thinkers have evidence from many different systems

    Shared services are already ramping up costs and reducing quality, but the statistics are being stifled.

    See The Systems Thinking

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