In my world good quality public sector health and education services are a good thing. In Labour’s world high levels of public spending on health and education are a good thing. The two things can be different.
Labour have always peddled two myths – that spending more on the public sector is always a good thing, and employing more people in any given service area is always a good thing. That is why it was such a breakthrough when a small group of Conservatives in the 2001-5 Parliament forced Labour into accepting that there were inefficiencies in the public sector, and persuaded them to set up a unit to try to get more for less, to run things better. The significance of that change or break through was not fully understood at the time. Part of the reason is that Labour adopted the rhetoric of efficiency, but were not good at securing it. Many Labour people, and the government itself, have often lapsed back since into the high spend is good, higher spending is better mode of thought. So often if you ask a Minister about the quality and reliability of a given public service you get an answer about the increases in “funding” instead of an answer about what is being delivered.
Now, deep into Mr Brown’s return to socialism, we are given a third myth about public spending – “it sustains the economy” and the withdrawal of the spending ” would undermine the recovery”. They have no understanding of the dynamics of the economy. The extra money spent by the government has to be taken from the private sector by higher taxes or more borrowing. The increase in one sector is therefore matched by a decrease in the other sector. It is not reflationary. Because their banking Regulator is busily squeezing the private sector to free the money for the public sector, it is arguably unhelpful, because private sector lending through the banking system would increase activity by more, given the gearing involved.
This morning we learn that many CEOs in the Health Service have had inflation busting wage increases on their generous pay. They belong to that large, growing and privileged group of senior Executives in the public sector who are called CEOs and have pay comparable to larger private sector companies, but whose jobs are nothing like private sector CEOs. As I have pointed out before, around 70% of a private sector CEO’s job is winning business, increasing the revenue,taking steps to secure and grow the turnover. Public sector chiefs simply bill the taxpayer, who is sent to prison if he does not pay. The remaining 30% of the typical private sector CEO’s job is controlling the costs and seeking to do more with less. Few publlic sector CEOs bother with this bit of the job either, preferring to write continuous propaganda to say that if they are not sent more money their service will fall to bits.
Labour have employed more than a million extra public employees. The overwhelming majority are not “front line” employees like nurses, teachers and doctors. They are administrators, auditors, regulators,spin doctors and advisers. The Conservative party has made clear it is not going to make anyone compulsory redundant. It is also clear that as around 300,000 or more leave or retire every year, any government that wants to control the deficit is going to have to employ fewer as the vacancies arise, whislt replacing the “front line” employees. They will also find as I did when I applied just such policies to parts of the public sector I have been responsible for in the past that service quality as well as efficiency can rise. They should discover you can employ too many managers, administrators and bogus CEOs. As they leave voluntarily, abolish the post or promote someone from within who is good whilst abolishing another post. That’s good for morale and for cost control.
Promoted by Christine Hill on behalf of John Redwood, both of 30 Rose Street Wokingham RG40 1XU