11 July 2010

Seeing the redwoods for the trees

I was reading John Redwood's blog the other day - not something I am proud of, but it was one of the many random feeds I get via Twitter, following UK politics. For those of you unfamiliar with his work, Mr Redwood was one of the swivel-eyed acolytes of what became known as Thatcherism, who has rested on his laurels of being a businessman ever since being elected to the cushiest public sector job in the land, as MP for Wokingham, some 23 years ago. What caught my eye was his column on public sector cuts, and his view of the heroic stoicism with which the private sector has borne the recession, as opposed to the mewling and puking he perceives within the public sector as Osborne's austerity budget begins to bite.

John begins his story thus:

In 2008-9 many private sector companies faced declines in their revenue of 25% or more. This was all far more horrific than the cash figures for the public sector this year and next. I do not recall these companies appearing in the media telling us they would have to take lumps out of their service to customers, identifying in public ways they could make their service or product worse, or proposing strikes to complain about the loss of public revenue support.

Instead they got on with the difficult but essential task of bringing costs down to meet the reduced revenue. Managers and workers worked together to reduce stocks, cut costs without damaging customer service, accepted pay freezes or even cuts in remuneration for the bad times, lost pension benefits and bonuses, negotiated cheaper purchases from suppliers. They often also at the same time worked on how they could improve their service or product for customers.

Speaking as someone who went through that painful process, I can identify one very significant cost reduction that John seems to have euphemistically skipped over, and not one that people did willingly or voluntarily. What he might call a total "cut in remuneration", as the ranks of the unemployed swelled, putting pressure onto the already contracting public sector. Which is, of course, a rise in demand for their "service or product".

Which is where John's tidy analogy breaks down, because the public sector receives highest demands for its services at exactly the times when there is less money to pay for it. In fact, given the enormous expansion in responsibilities local government has absorbed over the last 15 years, despite being at the mercy of central government for 75% of its revenue, most of the work of the front line delivery of public services is doing exactly what Mr Redwood challenges them to do: improving the service they provide while getting less money to do it with.

The huge contraction in the UK economy was down to an enormous reduction in demand, following the banking crisis. The total opposite to what local government is struggling to cope with as greater demands are placed upon its services; I do remember sitting in an office when the phone stopped ringing, not something I can imagine they have seen happening at the Social Services offices up and down the land.

05 July 2010

I predict a riot

To paraphrase Oscar Wilde, not only can we no longer afford to die beyond our means, it would seem any form of demand we place upon health or welfare services in the next few years is likely to end in an unhappy user experience. That is if we are to believe the government's projected plans for spending cuts, which seem to change on a weekly basis. Two weeks ago we were told there would be across-the-board cuts of 25%, now government departments must prepare for 40%. No doubt by the time you read this sentence, the coalition government's new website for the repeal of unhelpful legislation will abolished the laws of mathematics, allowing fiscal cuts of 150%.

The consequences of this, as has been much remarked elsewhere, not least by those wielding the axe, will not be pretty, with up to 1.5 million public sector workers finding themselves relieved of their ability to earn money. To balance this, George Osborne has promised on his mum's life that the private sector will leap into the breach to magic up 2.5 million other positions by way of compensation, like a fat-fingered, job-creating Dutch boy. Since such a scale of employment growth are unknown in even the boomiest of growth years, it doesn't so much beg the question as to how this will happen as grab it by the collar pressing a knife to its throat.

But when you put together the clues given by recent government policy announcements, the answer becomes clear: you're going to do it. Yes, you. Consider the newly-announced, misleadingly paradoxical Free Schools, where any Tom, Dick or Hermione with a bigger agenda than sense can set up his or her own school. Meanwhile, Ian Duncan Smith wants the Job Centres to be available for the distribution of Rwandan-style food parcels to the poor of this country; maybe we could combine the two, and get school children to grow food for the new starving to generate a wartime spirit and Dig For Victory? This is the Big Society at work or, should I say, at out-of-work. And here's where you come in.

Free Schools, Food Vouchers, growth of the third sector - it's all a bit piecemeal. And with attempts by the new government to tighten immigration from non-EU countries, it surely means it won't be enough to offer people the chance to run a school, job centre or orthopaedic surgery unit. Pretty soon we'll all be obliged to do so. As the rubbish fills the streets and the dead go unburied, everyone will be compelled to take a second job as road sweeper, social worker or Astronomer Royal to fill the gaps left by the collapse of local government under the Austerity Budget. We'll all be like a new immigrant class, with two jobs to hold down just to make sure there are enough people replacing the windows following the bread riots.

On the other hand, the extra money will come in handy to pay for all those tax rises.