Boom and bust in the public sector?

The government which gave you such a spectacular boom and bust in the private sector thanks to their crazy money and banking policies, now seems to want to repeat the experiment in the public sector – with the bust delayed until after the Election.

We learn that cuts will be needed after all. Some are pushing to scrap Trident. Clearly the defence budget is being singled out yet again for a mauling, with plenty of softening up with stories about poor and expensive defence procurement. Today Labour has adopted the populist mantle by attacking the so called Boomerang bosses – Council CEOs who earn too much, receive too large a pay off when asked to leave Council A, only to appear earning even more shortly afterwards at Council B. Readers of this blog will be well aware of the mis naming of some so called CEOs in local governent, who are not revenue responsible, and maybe cost irresponsible as well. The government has sanctioned the downgrade of benefits under the RBS pension scheme – is this a harbingner for their plans for civil service pensions as well?

Wouldn’t it be better to seek value for money now, instead of waiting for another year? Why does the mad over recruitment of so called managers have to continue? Why does the quango world need to expand more before it contracts?

This entry was posted in Blog. Bookmark the permalink. Both comments and trackbacks are currently closed.

20 Comments

  1. Mike Stallard
    Posted August 26, 2009 at 7:04 am | Permalink

    Mr Brown is determined to keep on being PM. He had to struggle to get there and, apparently, he thinks he can romp home on May 3rd next year.
    The disgusting silence over Lockerbie supports this view.
    In the Spectator is a picture of a fat man, smoking a large cigar and brandishing a stiff drink. He is obviously at a party impressing the guests with his wealth and tales of important people.
    He then admits to the admiring multitude that he is in the Public Sector, while they are only in the private.
    I think Labour wants his vote too – and perhaps a contribution?

  2. ken from glos
    Posted August 26, 2009 at 7:44 am | Permalink

    Final Salary Pensions are an unsustainable madness.I have now reached the stage where my ‘ take homepay ‘ is greater then when i worked for a living . We now have a two tier pension system in this country where the tax payers on poor pensions are paying for public sector pensions .

    Just look at the top pensions in the B.B.C for starters. It cannot continue.

    • Waramess
      Posted August 26, 2009 at 8:11 am | Permalink

      Another bubble?

    • Brian Tomkinson
      Posted August 26, 2009 at 8:24 am | Permalink

      Ken,
      I have noted previously your “complaint” about your generous pension. Just how is your take home pay greater than when you worked when there is a limit on final salary schemes at two thirds of final salary? Are you including the state pansion in your calculation?

      • ken from glos
        Posted August 26, 2009 at 9:48 am | Permalink

        Brian Tomkinson,

        Yes that inludes all pensions together with no N.I.C charges ( a tax by any other name) winter heating allowance, bus passes Christmas bonus! tax relief etc. Put togther it puts me way in excess of my old take home pay, a real State of madness!! Many of these ‘perks’ have to be means tested in the future. I expected comfort and dignity in ‘old age’ but not these riches. This nation must wake up as to what is happening.

        • Jalban
          Posted August 26, 2009 at 3:20 pm | Permalink

          Forgive me – I don’t know how long you have been in retirement. But most pensions go up with inflation and so are bound to catch up with your former salary or take-home pay eventually. And since today’s ‘average’ is to spend over 20 years in retirement, so they should! Imagine someone who retired from a fairly low paid job in 1989. Would you honestly expect that person to be coping today on less than they took home then?

        • ken from glos
          Posted August 26, 2009 at 6:17 pm | Permalink

          True but many people have to cope on an old age pension alone. I now get that together with a large final salary pension. Most in the private sector do not. I retired at 51 years .

  3. alan jutson
    Posted August 26, 2009 at 7:55 am | Permalink

    John, you have given the answer in your blog.

    They want cuts after the election because it may gain them a few more votes.

    See from the Telegraph this morning that as you say, RBS are looking to reduce their exposure, to their own pensions black hole, by reducing the employees possible future benefits. But a 15% company contribution (70% of which is taxpayers money) of an employees salary to their pension fund still seems like a reasonable deal to me.

    Ask a self employed person how much they would like someone else to contribute 15% to theirs, as well as tax relief.

    Again according to the Telegraph this morning, Surrey Council are looking for an Olympics co ordinator £45,000/year for 3 year contract. Only problem it would seem that no Olympic events are due to take place in Surrey.

    Oh to be a fly on the wall when these decisions are made.

  4. Waramess
    Posted August 26, 2009 at 8:08 am | Permalink

    Looks like Brown is setting up an elephant trap for when the Tories take office.

    His warped mind has it that he will not resign after the election but continue as leader of the Labour party. He will have laid the economy so low by then that in his view the Tories will push the country even deeper into the mire whilst trying to pull themselves out and Brown will be back in power in 2014.

    Robust right wing policies might just save the day but I cannot see how the Tories wet and timid attempts at pleasing all will do other than walk into Browns trap.

    Maybe I underestimate Cameron and Co or perhaps I overestimate the depths to which the currrent recession will take us in any event.

    I hope so because otherwise I fear we will all be acting out a nightmare come 2014.

  5. Mick Anderson
    Posted August 26, 2009 at 8:09 am | Permalink

    It’s all part of the scorched earth policy.

    The more non-jobs this discredited administration can create, the more they can bleat about the next administration throwing people (these parasites) out of work.

    It also has the added bonus of those in non-jobs being beholden to the Labour government. I thought that gerrymandering was meant to be a criminal offence….

    • oldrightie
      Posted August 26, 2009 at 9:43 am | Permalink

      I’m with you and furthermore I suspect The EUSSR dream is still a driving force behind the ruination of our economy. The EU then are made to look a “knight in shining armour” as they gather us up into their dubious clutches.

  6. Alfred T Mahan
    Posted August 26, 2009 at 8:29 am | Permalink

    A wonderful example is what is happening to adults with learning disabilities. On the ground that is a “human right” the government is hell bent on moving people from residential care into so-called “Supported Living” – essentially giving everyone their own accommodation – and has set up the funding so that even though in many cases this costs more overall it’s in the financial interest of councils as they can access more funding streams. It’s a policy which is costing billions, and yet many people moved into Supported Living regret it and can’t move back.

    I had a meeting yesterday on this very subject with officials from a very left-wing inner city council, and even they agree the policy isn’t sustainable – and, shockingly, the Conservative front bench aren’t interested – the words “no votes in it” and “what’s in it for me to rock the boat?” come to mind from conversations a number of those with portfolios in this area. Next time, I’m going to take a tape recorder.

  7. Brian Tomkinson
    Posted August 26, 2009 at 8:29 am | Permalink

    Value for money and Labour politicians is like oil and water they don’t mix.

  8. Adam-
    Posted August 26, 2009 at 9:14 am | Permalink

    Not only have these Labour stooges stolen my wealth, using their final salary pension schemes they’ve bagsied any future wealth I earn too.

    Wish I’d set my emigration date before before King decided he wanted to fund the deficit with an extra £75bn of crisp new tenners. The pound sure has taken a battering. A weaker currency is good, but not when caused by loss of confidence and flight of capital.

    • Freddy
      Posted August 26, 2009 at 3:17 pm | Permalink

      You ain’t seen nothing yet …

  9. Little Black S
    Posted August 26, 2009 at 10:44 am | Permalink

    Under the old system of local government (was it destroyed under Mr Heath?) we had town clerks who would go to great lengths to avoid any increase in the rates. That motivations seems to be completely lacking today, and I wonder why. Is it because local government is not local enough? And a whole caste of “Chief Executives and their courtiers has come into existence who cost an immense amount of money, which you would think people would resent more than they apparently do.

  10. Demetrius
    Posted August 26, 2009 at 11:08 am | Permalink

    When a gambler is down on his luck, he may put all his wealth at stake, and then his families. It the luck is still missing, he will borrow up to the hilt. If the luck is still not there and the lenders want some money back, he is likely to steal. Discuss, at what point are we now at in the government’s history of recent speculation?

    • StevenL
      Posted August 26, 2009 at 2:08 pm | Permalink

      Still in denial, they don’t believe they have a problem.

      • APL
        Posted August 26, 2009 at 3:10 pm | Permalink

        StevenL: ” .. they don’t believe they have a problem.”

        ‘THEY’ don’t! ‘THEY’ have fat tax funded index linked pensions – apparently you only need to spend two Parliamentary terms to be able to retire quite comfortably.

        But even if the parliamentary pension isn’t quite up to snuff, ‘THEY’ can quite easily land a sweet little number as UN envoy to BOSNIA or perhaps the leader of the TRIPARTITE peace mission to the middle East or who knows, the trade commissioner to the EUROPEAN UNION or even the Commissioner in charge of EUROPEAN UNION REFORM. Then if any of those haven’t sated your desire to ravage the public purse, you could get your self a sinecure in the United Kingdom House of Lords, where you can see out your years in afluent comfort……(allegation left out)

        ‘THEY’ are never measured by results, ‘THEY’ never have performance related pay, unless doing so implies the pay scale will only escalate.

        Cynical, me? Never!

  11. Jon
    Posted August 26, 2009 at 7:02 pm | Permalink

    And now, finally we hear the start of cuts to the gold plated pension schemes.

    Long Long Long overdue. Funny? Really funny, what a pleasant fiction they were for the civil service. Good news that its announced (in a small way albeit) during this government, the government that stole from the private sector pension funds.

    They can strike for as many unpaid years as they want, the more the better.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

  • John’s Books

  • Email Alerts

    You can sign up to receive John's blog posts by e-mail by entering your e-mail address in the box below.

    Enter your email address:

    Delivered by FeedBurner

    The e-mail service is powered by Google's FeedBurner service. Your information is not shared.

  • Map of Visitors

    Locations of visitors to this page