Dead Men Left

Wednesday, July 20, 2005

Wasteful, inefficient, yadda yadda

The Telegraph on "public sector productivity":

Until yesterday, Mr Brown's claim to be the heir apparent to Tony Blair looked unassailable. But that ambition is always going to be premised on his hitherto undeniable success as Chancellor. This success is suddenly looking rather threadbare. The public finances have consistently turned out to be in worse shape than he admits, and much of his spending has gone not on frontline services but on bureaucracy and pay rises. Productivity in the unreformed public sector is actually declining, so Mr Brown always has to spend more just to maintain output at current levels.

A thought: the most productive parts of the public sector have been hived off over the last twenty years. Outright privatisation hasn't touched the awkwardly labour-intensive areas of the public sector, like the NHS. If you take the most efficient parts out, it's no surprise that average productivity within the public sector falls. This is quite independent of any supposed "squandering" of extra public spending, though no doubt the targets and "quasi-markets" regime New Labour has tried to force down public sector throats has not helped.