Friday, February 5, 2010

Public sector cuts don't mean service cuts

There’s an interesting article in the Telegraph by Reform Director, Andrew Haldenby, suggesting something that to most people in the private sector must seem obvious. You can cut budgets without affecting the quality of services.

This idea is total anathema to your average public sector worker, union leader and sadly government official. To them the only way to improve services is to increase the amount of money that is already being thrown at it, and normally increase the number of people to. It is like a hotel that has a reputation for bad customer service saying well what we’ll do is hire more staff and increase our charges!

Luckily Andrew points out that the leaders of public sector organisations (those ones that everyone complains about being paid a huge salary) disagree he says that they know that they can save up to 20% whilst still improving their services citing examples such as the closure of inefficient and failing larger hospitals, to be replaced by smaller more efficient units in Birmingham, or the changing of inefficient fire shift patterns in Merseyside (Fire service changes are a classic example of Unions not wanting to see efficiency changes though)

It is the statistics and his comparisons to the private sector that are the most shocking though:

  1. If public sector workers took the same amount of sick leave as private sector workers that would save 3% of their wage bill or £6 billion a year.
  2. If public sector workers worked the same number of hours a week as private sector workers then they would save a further 10% or £26 billion a year.

So two incredibly simple solutions, that any struggling private sector business would look to do straight away (It was in fact part of Adam Crozier’s work at Royal Mail to tackle endemic sick leave and increase working hours), but two things that are simply not in the line of sight of the government.

Ultimately this is the problem, despite what are the equivalent of reducing sales income in the private sector, (decreasing and squeezed budgets from central government caused by a reduced tax income) no public sector organisation is truly looking at themsleves as if they are a struggling or even potentially failing business.

Something we’re really back to again is established narratives, the government and the public sector unions have established a narrative that says that public sector budget cuts equals less or worse services. This simply isn’t true though, and it’s a narrative that we have to tackle with the wider public if we are to see the defecit decrease and improve our front line services in a meaningful manner.

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