The public sector keeps on growing

 

 Despite all the talk and rows about cuts, the public sector keeps on growing in real terms.  In the first quarter of 2013 the public sector added 0.5%. It added 1.6% in 2012, 1.1% in 2011 and 0.6% in 2010.

Would all those who keep talking cuts try reading the latest output figures.

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33 Comments

  1. Richard1
    Posted April 25, 2013 at 9:52 pm | Permalink

    I see after all the fuss that Margaret Thatcher’s funeral actually cost £3.6m, of which £2m was notional opportunity cost, not cash cost. What a tiny amount compared with the £75bn she has saved us to date through the EU rebate, and in light of her momentous service to our country delivering us from the perilous position we were in both economically and internationally in 1979!

    • Mark
      Posted April 26, 2013 at 10:15 am | Permalink

      It also provided three hours of TV for BBC – something for which they would have been prepared to pay the equivalent sum of the cash cost to an independent producer:

      http://www.bbc.co.uk/commissioning/tv/how-we-work/business-requirements/tariff-ranges.shtml

      • Denis Cooper
        Posted April 26, 2013 at 12:52 pm | Permalink

        Nice point.

        At least Drama 5, £700k – £790k per hour, with “period settings” and large cast with leading figures “talent established”.

      • Jerry
        Posted April 27, 2013 at 6:10 pm | Permalink

        @Mark: Not sure what your point is, other than to show a total lack of understanding as to how such TV works, it has been years since the BBC owned its own OB trucks and crew etc. – so plenty of work and opportunity for the private sector on this event like many others. Even the producer and director might have been “Freelance”.

        Personally I would prefer if such ‘State’ (like) occasions were not allowed to fall into the grasp of the commercial media production ethics, we all saw what can happen when pure PSB presentation is given such ethics last year when the BBC attempted to make the Jubilee ‘accessible etc.’ People watch such broadcasts because they want to watch, not because it is good ratings entertainment…

    • lifelogic
      Posted April 26, 2013 at 4:06 pm | Permalink

      Indeed and hopefully to remind the country of what dreadful socialist leaders we have now. Any way we have plenty of those state sector people with nice uniforms, horses, cars, churches and cathedrals doing very little. Might as well put them to some use.

      Churchill on bank note too now I hear, I am not sure it will help Cameron much now.

      Once when Churchill was asked, by a boy, as to what he attributed his success he replied – Conservation of energy, never stand up when you can sit down and never sit down when you can lie down.

      • Jerry
        Posted April 27, 2013 at 6:24 pm | Permalink

        Lifelogic: “Churchill on bank note too now I hear, I am not sure it will help Cameron much now.

        Indeed it won’t as it isn’t due to enter circulation until 2016, a whole 12 months (or so) after the 70th anniversary of VE and VJ days – Mr Redwood, can someone please suggest to the BoE that these bank notes should really be introduced a year earlier, preferably on or some time between the 8th May and August…

        Oh and how about giving the good chap a higher value, the 10 or 20 quid note would do nicely! The £5 note is fast becoming irrelevant. 🙁

  2. Anthem
    Posted April 25, 2013 at 10:07 pm | Permalink

    Not something to shout about Mr Redmond. Labour were voted out largely because people felt that the public sector was, once again, sucking up too much money.

    As far as I’m concerned, these are damaging figures.

    • Anth
      Posted April 26, 2013 at 11:19 am | Permalink

      Redmond? My sincere apologies Mr Redwood (cringes in embarrassment).

    • Edward2
      Posted April 26, 2013 at 3:48 pm | Permalink

      Noel Redmond is one of my favourites Anthem, I love his programme Deal or No Deal

    • Jerry
      Posted April 27, 2013 at 6:26 pm | Permalink

      @Anthem: “As far as I’m concerned, these are damaging figures.

      I get the feeling that might have been Mr Redwood’s point!

  3. behindthefrogs
    Posted April 25, 2013 at 10:32 pm | Permalink

    Statements like this must be made about the same timescales. Most of the complaints about cuts, particularly in benefits, are about things which are happening after April 2013. Historical growth in the public sector have very little relevance.

    It is however extremely worrying that many of the cuts expected from the reduction in the size and numbers of quangos just haven’t happened. Many of the functions that were supposed to have been cut have re-emerged in another quango or government department.

  4. Lindsay McDougall
    Posted April 25, 2013 at 10:43 pm | Permalink

    I would be grateful if you would present exactly the same figures to Rt Hon George Osborne and ask him one question: Why?

    • lifelogic
      Posted April 26, 2013 at 7:36 am | Permalink

      Why? Because this government is not in control. Tax borrow and pour down the drain is everywhere in the state sector. Much of it doing nothing but harm.

      Look at the drivel poured out by the tax funded BBC every days by the mass of hugely over paid and pensioned, big state, quack green, pro EU lefties.

      • lifelogic
        Posted April 26, 2013 at 4:12 pm | Permalink

        I see the BBC now finally want to limit pay offs to £150,000 – well a small start at last. Salaries should not exceed £150,000 and pay offs perhaps £50,000.

        After all dopey guardian reading lefty, art graduates are very cheap in the employment market and very numerous. The should pay no may than the market rate they currently pay about 3 times that.

        • Jerry
          Posted April 27, 2013 at 6:51 pm | Permalink

          @Lifelogic: The BBC has, traditionally, paid below industry average wages/salaries, in the past (when the BBC was allowed to do such things) the BBC tended to train studio technicians and production staff only for them to leave, going to work for the commercail sector who paid far more – so perhaps not only should the BBC be forced to cut wages, after all 9and especially with the commercail and subscription broadcasters who screen adverts) we all have to pay, and unless we stop actually buying consumer products and services there is no opt-out either – unlike with the BBC and TVL fee, choose not to have a TV, you still pay for the TV adverts.

          Funny, when the BBC acts like a commercail company people complain, when they act like a arm-length (from government) Public Sector Broadcaster people like complain, if they were to act like “TASS” people complain -when their political dogma wasn’t the flavour of the day- all such ranting does is prove that the problem is not actually the BBC!

  5. NickW
    Posted April 26, 2013 at 3:30 am | Permalink

    Cutting bits off an organism that is eating too much and getting fat is futile.

    There needs to be a blanket reduction in food supply.

    • lifelogic
      Posted April 26, 2013 at 7:38 am | Permalink

      But there is no drive from Cameron and Osborne so to do. They like all this, state sector, tax borrow and waste.

    • Bob
      Posted April 26, 2013 at 8:39 am | Permalink

      @NickW
      “There needs to be a blanket reduction in food supply.”

      Never a truer word spoken.

  6. lifelogic
    Posted April 26, 2013 at 6:30 am | Permalink

    Not only growing but becoming less and less competent and more and more directed toward things that are entirely pointless or worse actually negative in effect.

  7. Martin
    Posted April 26, 2013 at 7:19 am | Permalink

    So that is what is known as “healing” the economy. At this rate Mr Osborne will be getting a special award for growing the public sector from the more Soviet elements at the TUC.

    How much of this inflation (sorry growth as Comrade Osborne would say) is Housing Benefit both as in work/retired/JSA benefit?

  8. Steve Cox
    Posted April 26, 2013 at 7:43 am | Permalink

    According to the figures I have seen, 600,000 public sector workers have lost their jobs since 2009. So what happened to all the savings that were supposed to have been made there? Something doesn’t add up.

    • behindthefrogs
      Posted April 26, 2013 at 12:18 pm | Permalink

      A lot of the money has been spent with private companies who do the jobs that were chopped. Using these private companies costs more than the doing it in house used to even though they employ some of the original staff often on lower salaries.

    • Denis Cooper
      Posted April 26, 2013 at 12:32 pm | Permalink

      From last December:

      http://www.ons.gov.uk/ons/rel/pse/public-sector-employment/q3-2012/stb-pse-2012q3.html

      “Total UK public sector employment decreased for the twelfth consecutive quarter in Q3 2012, by 24,000 to 5.745 million.”

      So a 600,000 drop since 2009 would have been 0.6 million divided by about 6.3 million = less than 10%.

      But:

      “The Q3 2012 total public sector employment estimate is 324,000 lower than the Q3 2011 estimate. The Q3 2012 private sector estimate is 823,000 higher than the Q3 2011 estimate. These were affected by the reclassification of English colleges in Q2 2012, which resulted in 196,000 employees being reclassified from the public to private sector.”

      So just from that alone, about a third of the claimed reduction in the number of public sector employees has been achieved by reclassification; meaning that for cost purposes the apparent 10% contraction in numbers has actually been no more than 6% if their reclassifications mean that the costs of those people are still indirectly paid for by the government.

      Then of course those 196,000 were an addition to the great number of private sector workers who were already indirectly paid for by the government; with public spending running at well over 40% of GDP it is obvious that a large proportion of the total of 29 million employees must depend on that public spending for their employment even though they are in the private sector.

      If you want a significant reduction in the total number of workers whose jobs directly or indirectly depend on public spending, which at present must be somewhere around 13 million, then there has to be a reduction in public spending as a fraction of GDP affecting both the numbers employed in the public sector and the numbers employed in the private sector to service the public sector.

    • sm
      Posted April 26, 2013 at 1:02 pm | Permalink

      Unemployment/depression is an expensive business for taxpayers as well.

      Where is the reduction OR elimination of employee/er taxes like NI?
      Major simplification (no need for NI tax dodges).

      If the benefit cap is £26k, that is where tax should kick in!

      What do you expect with a government without any real control of borders etc etc, with a still functioning welfare state.

    • Dan H.
      Posted April 26, 2013 at 2:31 pm | Permalink

      Probably a trick such as sacking the full-time employees, then re-employing them as contractors. The allows a department to simultaneously get rid of employees, spend more on staff and increase the total numbers of staff “employed”. As Northcote Parkinson so aptly put it, bureaucracy exists in order to expand.

    • uanime5
      Posted April 26, 2013 at 3:19 pm | Permalink

      Don’t forget about all the savings that we’re supposed to get from benefit cuts, privatising the NHS, and getting 1 million people off welfare and into the 1 million private sector jobs that have been created.

  9. Chris S
    Posted April 26, 2013 at 8:44 am | Permalink

    Confirmation of what most of us contributing to this blog have known for a long time.

    The “cuts” and “austerity” are nothing of the sort. The government has not got to grips with spending and the only really tough decisions have been to slash the defence budget and keep on increasing health and overseas aid.

    How much of this is down to the LibDems and how much down to Dave being ineffective I don’t know but I am certain that we are going to continue to bump along the bottom until there is a change of policy.

    Yes, manufacturing and construction need a shot of adrenalin but the money has to come from real cuts somewhere else, not rising taxes. Some modest welfare cuts, halving the aid budget, or at least providing the same amount of aid in the form of vouchers to be spent on British goods and infrastructure assistance, and a removal of the health ring fence would be a start.

    If you want an indication of how the NHS is responding to the need for austerity have a look at this job advert :

    http://jobs.telegraph.co.uk/job/4193265/chief-operating-officer/?utm_source=indeed&utm_medium=feed&utm_campaign=Standard

    Do we really need “a brand new national organisation” with 3,000 staff to manage NHS properties when the whole thing could be devolved to Health authorities ?

    Seeing Balls doing the rounds on radio and TV yesterday, the hypocrisy was sickening.

    How long is it going to take Milliband to realise that he has no chance of credibility on economic policy while his spokesman on the subject is one of the principal architects of the mess we are in !

  10. Denis Cooper
    Posted April 26, 2013 at 10:09 am | Permalink

    Just in numerical terms a 0.5% growth of the public sector in Q1 2013 would more or less account for the estimated 0.3% growth of the whole economy.

    • uanime5
      Posted April 26, 2013 at 3:21 pm | Permalink

      Especially if this money was mostly spent in the services sector.

  11. mactheknife
    Posted April 26, 2013 at 10:32 am | Permalink

    I think most people on here recognise that there have been no real cuts in terms of the public sector, but the left wing press constantly use “cuts” to hammer the government, and therefore perception becomes reality in the eyes of many people.

    The cuts in welfare (housing benefits etc) are in fact very popular with the public in general as polls have shown. So maybe the chancellor is missing an opportunity to cut more deeply in areas which the public know need to be cut ? Rather than the Labour mantra of “too far too fast” perhaps adopt a different slogan of “not far enough, not fast enough” which would reflect reality ?

    • uanime5
      Posted April 26, 2013 at 3:30 pm | Permalink

      There have been cuts in the public sector but the Government has also increased spending in other areas, so overall there hasn’t been a reduction in the amount the public sector spends. For example reducing the public sector by 600,000 since 2009 is definitely a cut but overspending on academies by £1 billion is likely to have reduced any benefits from this cut.

      The cuts in housing benefits are not popular with the 660,000 people who have had their benefits cut and further cuts to welfare will certainly see the Conservatives losing the next election. The Conservatives failed to win a majority because they couldn’t attract enough voters and bullying the poorest in society will no encourage people who wouldn’t normally vote Conservative to vote Conservatives.

  12. Wokingham Mum
    Posted April 26, 2013 at 11:14 am | Permalink

    We are conservative voters but we are fed up with this government. Don’t think he’s getting our vote next time.
    Cuts in benefits and the public sector are backed by the public but where are the saving?
    Cuts to government depts where are the saving?
    Austerity, cuts, but spending is up?
    Investment where? Silly projects not where real impact could be made
    Growth where?
    We don’t want token tax cut, council tax freezes We want real income increases, job’s, a driven growing market, security in the future, economy growth, yes cut benefits culture, save money in the over spending public sector but get this economy moving.
    When people and businesses start to feel good, secure and see positive real growth and a strong Government saving and spending our money wisely they will spend. Restore peoples confidence, fix the banks, fuel private industry.
    Yes cuts and austerity but also if required borrow to invest, invest in growth,
    Growth will pay our depts.

  13. Mark
    Posted April 26, 2013 at 10:00 pm | Permalink
  • 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.

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