Author: johnredwood

The civil service has too many grades, switches people around too often and then has to buy in expertise from consultants.

If some one is only going to spend a couple of years or so in a job before moving onwards and often upwards there is difficulty in that person learning enough, building enough relationships and contacts to do the job well and having a wide and deep body of knowledge about that set of problems. The civil service needs to keep more people in jobs for longer, and reward them better for staying in post with performance pay or with promotion whilst staying in the same area.

I remember as Single market Minister finding our officials were often switched whilst some other countries kept people in post in Brussels for much longer to build their contacts and understand how the system worked.

Regular  switching is linked with several grades of official being involved in Decisions and framing advice.It means no-one is ever to blame or responsible for handling a problem when it emerges. If something goes badly wrong the enquiry usually concludes it was a system failure an£ recommends a set of procedural changes for the future. In business there is more individual responsibility set out in the definitions of jobs and the authority levels granted to the staff. There can then be a more direct relationship between performance, pay and promotion, and faster response  to problems which may need staff change.

There needs to be more regular review of tasks and staffing in the civil service. Flatter structures for more matters would help. Clearer named responsibility and build up of expertise is  essential. there should be less resort to consultancies to do the work when there are officials on the payroll to do it.

The areas of the private sector that achieve the highest levels  of efficiency are usually very driven by competition. The leaders of the businesses know if they cease the search to do better with less and give up the drive to innovate and change, their competitors will take their customers.

Advocates of nationalisation say that should  be more efficient and low cost because it removes the need for competing management teams, multiple head offices and advertising. Looking at past experience  shows this is just not true. Large nationalised monopolies offset the economies  of scale with the inefficiencies of monopoly provision.

When the U.K.electricity industry was privatised the nationalised management fought against creating competing generators, claiming it would be dearer and less productive. The  government split up the industry and created competition. In the first decade moving to a competitive system labour  productivity doubled and electricity  prices came down. The industry that had believed in fuel inefficient  coal power stations went for the dash for gas. The new power stations were 60-70% more fuel efficient, greener and cleaner.

Public sector trading bodies that charge the customers should be subject to competition.

MPs are meant to run the complaints department. Much of the case work is trying to remedy failings in public services. I will be writing a few blogs on some of the reasons there are so many complaints.Many of the Statements and  debates are about what to do when things go wrong..

One of the principle causes of complaint is rationing. Key public services have too little capacity, leading to access denied or inadequate service performance  or long waits to get the service.

We have fully nationalised roads. All my life we have been kept short of road space by local and national road managers who want to deny or limit access to roads or think it a good idea to allow bad traffic jams. There is still no south coast motorway, the M25 remains too small, the A 303 to the West Country has not been fully dualled, with similar gaps in provision elsewhere in the country. Many Councils now close or limit what roads they do have to make access to towns increasingly difficult.

The NHS dominates healthcare. It has excessively long waiting lists, delays in getting appointments and lets  some down who need urgent treatment.

The fully  nationalised rail regions have poor records for delays and cancellations to train services. Train travel fails to offer much capacity for freight traffic in ways that could shift loads off the roads.

The heavily regulated and controlled electricity utilities rely more and more on imports as government will not design national security into its over managed system.

The water companies under nationalised ownership and more recently under privatised and regulated ownership have lacked capital and permissions to replace worn out old pipes and put in enough capacity for a rising population.

So now we read confirmation the the EU wants us to accept freedom of movement for under 30 s.
They want to grab more of our fish for longer, demanding an extended and generous access for their trawlers and super trawlers to our waters.

They want to impose more of their  laws on us. They are offering no new and improved access to their market.

None of this makes any sense for the U.K.Still the U.K. government fails to ask for anything that we might need to make our lives better.

Although the U.K. establishment did its best to wreck Brexit and avoid taking advantage of the freedoms, we are saving £12 bn a year and putting that into the NHS, We have avoided a large Share of Euro 800 bn of extra EU borrowing they agreed as soon as we left, and do not have to impose hundreds of costly and unhelpful laws they have imposed since we left.

I was pleased to see the government now recognises the productivity collapse in the public sector. They say they wish to reduce the civil service by 10,000. That would be a modest start.

They need to be more ambitious. Applying a policy of natural wastage to avoid any redundancies should free more than 30,000 a year. As people retire or move to another job so you can slim the establishment and promote or transfer existing staff into the important jobs you need to keep. A speedier policy could augment this with a call for voluntary redundancies, though this requires suitable severance payments.

It is also important to widen this to include the enlarged administrative cadres of the wider public sector, especially the NHS.

We read a suggestion the government may find £1.5 bn of extra money to help buy ammunition in an EU scheme. If the Chancellor can find such a sum it should be given to our military and spent on munitions, equipment and personnel from the U.K.

Meanwhile the Metrology Bill is working its way through the Lords. This is a Bill to enable Ministers to lock us back into EU laws more easily. Why? Exporters need flexibility to follow US rules when selling to th3 Americas, Asian rules when selling to Asia and EU rules when selling to the EU. We must not be bound into the EU way of doing things.

The Chancellor failed to spell out what she wants from Brussels that would help growth. Our growth was very slow  this century when fully in the EU. Some say the U.K. needs relaxations to sell more milk, cheese, beef  into tge EU. What we need is better support for farmers to grow food for the domestic market. We import too much food with long food miles from the EU already.

U.K. productivity has been disappointing this century. The Chancellor and civil service call it a puzzle. The main reasons are obvious and need treating.

The public sector is the main cause. There has been no productivity gain all century so far. There has been huge spending on many more computers and digitalised services, and reductions in customer facing staff. At the same time there has been large scale recruitment, many promotions and much increase in the complexity of process and audit. There has been a proliferation of new public bodies and of EU and domestic regulation. Much of this has failed to make things safer and better.

The second cause is net zero high priced energy policies leading to accelerated run down or closure of highly productive sectors like oil and gas, steel, and other energy and capital intensive manufacture. There has been growth in labour intensive services instead. Even successful and internationally competitive sectors like banking  and business services have  had to recruit many more employees to implement waves of additional regulatory requirements.

The simplest way to lift overall U.K. Labour productivity is to reverse bans on energy using industry and go for lower energy prices.Essential to the task is also to effect a managerial revolution in public services. I will be writing more about this following yesterday’s headline agenda for change.

If anyone wishes to comment on Syria feel free to do so. The U.K. does not have any military commitment there and should leave it to Turkey, Lebanon, USA, Israel and Iran that do have military commitment to sort it out with the new Syrian transitional government and each other.

There are numerous ways to boost public sector productivity.

1. Recruitment freeze, forcing managers to promote or transfer existing staff into the important roles and eliminate other jobs as people leave or retire.

2. Regular review of old initiatives to wind  them up and transfer staff to better uses. Old initiatives in government often linger on long after the Ministerial impetus has gone.

3. Rule against both employing staff to do a job and employing consultants to do the work for them, Consultants  should only be used where the state lacks expertise and does not need permanent expertise of that kind.
4. Contract out more activities. Give staff the opportunity to buy out or be given their activity with an initial contract to supply the government.

5. Reduce office space for home working, with more hot desking.

6. Sell surplus assets.

7. De stock with more just in time delivery contracts for bought in goods.

8. Review energy use in public buildings, More insulation, better thermal controls.

9. Try to avoid heavy use of bought in contract Labour at higher pay than existing staff.

10. Identify overlap and excessive process by function to reduce duties of various departments and quangos.

Some briefing from the government suggests they are not willing  to agree further substantial increases in public spending as they did for 2025-6 in their first budget, or as the previous government did from the outbreak of the pandemic in 2020. Given the large cash and real increase in both health and welfare spending in the last five years attention should shift to getting value for money for all the increases agreed so far this decade.

I will update my thoughts on controlling public spending whilst improving core public services in a number of blogs. Today let us begin with the second and third largest increases in spending in recent years, Bank of England losses and debt interest.

There is no need to restate the detail of how the Bank’s losses could be slashed if they stopped selling bonds in the market at much lower prices than they paid for them and if they adopted the European Central Bank approach to paying interest on commercial bank reserve deposits.

When it comes  to debt interest the numbers surged 2022-4 thanks to the Bank losing control of inflation. The U.K. has issued substantial indexed  debt. It then charges to public spending the increase in repayment value of the debt as it occurs, though the Treasury does not make these cash payments. On maturity the government borrows the enhanced cash cost of repayment to meet the extra  bill.

As the Bank cannot be trusted to keep inflation low it would make sense to stop issuing indexed debt or greatly reduce its quantity, to avoid any future surge in these accounting costs. To control the rest of the debt interest programme the government needs to reduce the build up of  borrowings. Bringing spending and tax revenues into line is the obvious way to do this but governments find this difficult.

In order to speed transition to less borrowing government should in the short term have more recourse to selling assets it does not need to own. It can get on with the sale of Nat West, Channel 4, investments held in the U.K. Infrastructure and British Business banks, surplus property, local government investment holdings, and other assets.
The aim of lower borrowing should be to get the average interest rate down. The last budget put the 10 year rate and some related mortgage costs up. With a lower deficit and better spending controls it would be possible to lower the average borrowing rate by say a quarter which over time would bring down borrowing costs from current elevated levels.