The Coalition..is It Making The Wrong Sort Of Cuts

[Mikhail Liebenstein]

One interesting observation I'd make on the current cuts put forward by the coalition is that they don't seem to be addressing the real issue.

They have canned a few projects and cut a few helicopters etc. But frankly I don't see cutting investment in physical assets/capital as necessarily the right approach. My view is that these assets could in many cases deliver efficiencies and savings and also a reduction in personnel and therefore many years of savings in salaries and pension costs.

My suspicion is that rather than cutting personnel, the Civil Service is drawing in its horns and is surrendering a few projects, when really in many case the trick would be to carry on with the project, but cut the number of people working on it and in fact take the knife to the rest of departments staff as well.

The danger in trimming projects and other thing that are actually done and not the people is that you end up with worse services and a lot of people doing very little. Surely it is better to get the efficiencies out of the staff who perhaps work cushy hours etc.

For instance take a number of deprtmental officials who work 7 hours days, but need to provide 24 cover. You need 4 of them to provide 24 hour cover, but if you raised their hours to 8 hours with no pay rise (happens in the private sector) you could cut the number of staff down to 3 and save 25%. But instead, if this were the NHS, it would chose to forgoe the MRI scanner or the dialysis machine instead.

Edited June 18, 2010 by Mikhail Liebenstein

[Guest happy?]

One interesting observation I'd make on the current cuts put forward by the coalition is that they don't seem to be addressing the real issue.

They have canned a few projects and cut a few helicopters etc. But frankly I don't see cutting investment in physical assets/capital as necessarily the right approach. My view is that these assets could in many cases deliver efficiencies and savings and also a reduction in personnel and therefore many years of savings in salaries and pension costs.

My suspicion is that rather than cutting personnel, the Civil Service is drawing in its horns and is surrendering a few projects, when really in many case the trick would be to carry on with the project, but cut the number of people working on it and in fact take the knife to the rest of departments staff as well.

The danger in trimming projects and other thing that are actually done and not the people is that you end up with worse services and a lot of people doing very little. Surely it is better to get the efficiencies out of the staff who perhaps work cushy hours etc.

For instance take a number of deprtmental officials who work 7 hours days, but need to provide 24 cover. You need 4 of them to provide 24 hour cover, but if you raised their hours to 8 hours with no pay rise (happens in the private sector) you could cut the number of staff down to 3 and save 25%. But instead, if this were the NHS, it would chose to forgoe the MRI scanner or the dialysis machine instead.

And nobody's even mentioned the cynical Sir Humphreys who intentionally stuffed the budgets knowing they would be cut - makes their masters look good and keeps them off the trail for a while...

[Mikhail Liebenstein]

And nobody's even mentioned the cynical Sir Humphreys who intentionally stuffed the budgets knowing they would be cut - makes their masters look good and keeps them off the trail for a while...

I agree.  The mantra seems to be to deliver and do less, but that none of Sir Humphries little helpers should face the chop. Seriously for most of the public sector wages and pensions are 90% of the cost, the 10% is the useful stuff used to do the job.

The coalition is being hoodwinked, and the civil servants will just get to work even less hard until someone twigs and they finally get the chop.

[stu531]

They should:

- Reduce all pay across the public sector by 5%

- Reduce staff pensions by 10% across the board

- Make sure people actually work the hours they are contracted to

- Close down unnecessary offices by merging similar agencies (e.g. DEFRA, Natural England)

- Make people work from home and hotdesk to shut down even more offices and save on electric/heating and thereby reduce commuting times for the rest of us

- Get rid of the stupid idea that ALL public sector organisations have to spend money by year-end otherwise they lose it

You don't need to make masses of people unemployed - just be smarter about cutting costs.

[plummet expert]

They should:

- Reduce all pay across the public sector by 5%

- Reduce staff pensions by 10% across the board

- Make sure people actually work the hours they are contracted to

- Close down unnecessary offices by merging similar agencies (e.g. DEFRA, Natural England)

- Make people work from home and hotdesk to shut down even more offices and save on electric/heating and thereby reduce commuting times for the rest of us

- Get rid of the stupid idea that ALL public sector organisations have to spend money by year-end otherwise they lose it

You don't need to make masses of people unemployed - just be smarter about cutting costs.

Well, you are right except where you are wrong. I wuld say, we should not make people redundant for the sake of it, but rather do all you say AND remove the jobs which should never have existed. We should scrap 70% of Quangos many of which are pointless. Quangos cost a total of £80BILLION pa to run, so a good look at them is needed. Those that remain should be forced to accept sensible salaries. Things like £242k pa IS TOO MUCH. I am on offer for half at any of the posts. Perhaps they would like to put the matter out to tender? Some govt activities are done this way and even get good value.

The 'wrong cuts'! They have only cut the paper clips. They have hardly started. Remember that £6BN announced recently is only 2 weeks of over spending in a year. The £2bn is only Mon to Thurs pm of a one week of a years overspending. We need to cut £60Billion+ fast. Then support the private sector and cut another £30bn each year for two more years. It is a £155bn over spend pa and a national debt of £900bn so far and rising.

[Mikhail Liebenstein]

Well, you are right except where you are wrong. I wuld say, we should not make people redundant for the sake of it, but rather do all you say AND remove the jobs which should never have existed. We should scrap 70% of Quangos many of which are pointless. Quangos cost a total of £80BILLION pa to run, so a good look at them is needed. Those that remain should be forced to accept sensible salaries. Things like £242k pa IS TOO MUCH. I am on offer for half at any of the posts. Perhaps they would like to put the matter out to tender? Some govt activities are done this way and even get good value.

The 'wrong cuts'! They have only cut the paper clips. They have hardly started. Remember that £6BN announced recently is only 2 weeks of over spending in a year. The £2bn is only Mon to Thurs pm of a one week of a years overspending. We need to cut £60Billion+ fast. Then support the private sector and cut another £30bn each year for two more years. It is a £155bn over spend pa and a national debt of £900bn so far and rising.

I would tend to agree. Efficiency in the public sector has fallen, its not the fault of the MRI scanner, the Xray machine, the search and rescue helicopter. Its the result of overmanning and fat layers of overpaid management. 

[unclefester]

Back in the 80's both my parents worked for the Health Service, the civil servants did the same then. Thatcher rightly called for cuts in the NHS to curb waste yet the only place the axe fell was on the front line staff, ensuring Thatcher was forever remembered as some kind of monster.

[stu531]

Don't get me wrong - I think there are a number of QUANGOs that really should justify their existence. And I also agree that no-one in the public sector should be paid £242K - in fact I'd suggest as low as £100k. But there are a lot of decent people who work in the public sector and do put in the effort. I was suggesting some items that I think would make some difference, whilst causing waste and inefficiencies to be reduced.

There is a movement in the right wing press to suggest that the public sector is *all* inefficient and unnecessary. That just isn't true. I agree that it does need sorting out, but just lancing randomly here and there (as the OP said) isn't the right way of doing it.

[dubsie]

But you lot still don't get it. They will never cut the fat cats because it's the fat cats who make the cuts. Central government has very little control over the running of a hospital. The Tories are going to drag this country backwards and create the biggest recession in our history.

You can't make these cuts without hurting the wider economy. Massive cuts of this type when the UK is lumbering along will cause a long deep recession. Plenty of evidence that backs this argument.

[dubsie]

Back in the 80's both my parents worked for the Health Service, the civil servants did the same then. Thatcher rightly called for cuts in the NHS to curb waste yet the only place the axe fell was on the front line staff, ensuring Thatcher was forever remembered as some kind of monster.

What a load of bull. Thatcher brought the nhs to it's knees and if you think there is a better alternative to the nhs then please take note that most countries regard our nhs as the best in the world. Thatcher was a monster she destroyed this country. I lived through it.

[okaycuckoo]

But you lot still don't get it. They will never cut the fat cats because it's the fat cats who make the cuts. Central government has very little control over the running of a hospital. The Tories are going to drag this country backwards and create the biggest recession in our history.

You can't make these cuts without hurting the wider economy. Massive cuts of this type when the UK is lumbering along will cause a long deep recession. Plenty of evidence that backs this argument.

Linky? (Please, not some union claptrap.)

[stu531]

I am inclined to agree with Dubsie. Let's see what happens in the next year or so. Remember what the Kaiser Chiefs sang...

[Bootsox]

What a load of bull. Thatcher brought the nhs to it's knees and if you think there is a better alternative to the nhs then please take note that most countries regard our nhs as the best in the world. Thatcher was a monster she destroyed this country. I lived through it.

Having lived through the Thatcher years, and been a NHS user, I don't particularly remember it being on its knees.

Was this a localised issue?

[Ash4781]

You should consider the governance structures. The idea is that decisions to cut are pushed to the periphery so that they can be held accountable and protect front line services. Though in practice this is likely to be applied recruitment freezes, and carrying vacancies in the first instance . The problem is productivity though what is the incentive to generate cash savings ?

[Zngland]

But you lot still don't get it. They will never cut the fat cats because it's the fat cats who make the cuts. Central government has very little control over the running of a hospital. The Tories are going to drag this country backwards and create the biggest recession in our history.

You can't make these cuts without hurting the wider economy. Massive cuts of this type when the UK is lumbering along will cause a long deep recession. Plenty of evidence that backs this argument.

But it's all linked to tax revenue which is collapsing. Robbing Peter to pay Paul

can't continue indefinitely, and to cover the gap you can't borrow indefinitely look at Greece.

There is no choice the unbreachable debt wall has been reached GDP is going down.

[Injin]

The structural reforms that need to be made are politically impossible before a collapse.

What we are getting is tinkering around the edges and soothing noises for the bond market and idiots who continue to hold sterling, all designed to get another month/week/day/hour out of the current paradigm.

[Guest Noodle]

The structural reforms that need to be made are politically impossible before a collapse.

What we are getting is tinkering around the edges and soothing noises for the bond market and idiots who continue to hold sterling, all designed to get another month/week/day/hour out of the current paradigm.

Need to ask who holds the most Sterling and who risks losing value if Sterling collapses further?

I think it won't. I think it has already. Same with the Dollar, not sure on the Euro. This isn't because of 'sound fundamentals' in the West.

This all comes back to LuckOnes' bit about the pan-Asian bond market and the internal market in Asia replacing the current export (out of Asia) dependent Asian GDP. We're 60% plus dependent on exports here for GDP, likely 20% dependent on tourism (official 6% but . . . I won't go there).

[unclefester]

What a load of bull. Thatcher brought the nhs to it's knees and if you think there is a better alternative to the nhs then please take note that most countries regard our nhs as the best in the world. Thatcher was a monster she destroyed this country. I lived through it.

"A load of bull" - actually no its not its a factual recollection of the period commenting on the thoughts of two people working within the organisation at the time - keep your sniping to yourself.

You lived through it you say - so what are your recollections and experiences? Probably limited to reading the latest propoganda from the students union while enjoying your free uni education.

And if you take the trouble to read my post correctly and not snarl and snap with typical left wing anti Thatcher sentiment I did not say the NHS went unscathed I merely pointed out that when Thatcher attempted to curb some of the undoubted waste within the NHS the civil servants tasked with the job attacked front line staff rather than culling their own ( as per the observations of the opening poster on our current situation) leaving Thatcher with what I believe in this instance was an undeserved reputation. Also where exactly in my post did I even hint that there is a better alternative to the NHS. Though quite where you get the idea that most countries view ours as best in the world I dont know. I cant recall ever hearing in the press about the french or the germans ever attempting to copy our system.

[Si1]

please take note that most countries regard our nhs as the best in the world.

not any more they don't

[erranta]

But you lot still don't get it. They will never cut the fat cats because it's the fat cats who make the cuts. Central government has very little control over the running of a hospital. The Tories are going to drag this country backwards and create the biggest recession in our history.

You can't make these cuts without hurting the wider economy. Massive cuts of this type when the UK is lumbering along will cause a long deep recession. Plenty of evidence that backs this argument.

The Institute of Directors? (which advises directors pay rises every year) is on a great ruse.

For the past 15+ yrs they have awarded themselves way above inflation pay rises+bonuses.

The way they do it?

They get other directors in complimentary companies to act as 'consultants' to work out how big a 'rise' they get each yr. The other parties then act as 'Consultants' to vote the other side similar rises to place/CON before the shareholders/exec committees etc

To keep the act going, they also gave managers similar above inflation wage rises (hush money)

The end result is "austerity" doesn't hardly touch them, because the fat cats really are on stratospheric, undeserved wages!

[dissident junk]

What a load of bull. Thatcher brought the nhs to it's knees and if you think there is a better alternative to the nhs then please take note that most countries regard our nhs as the best in the world. Thatcher was a monster she destroyed this country. I lived through it.

You might want to look at the rates of perinatal deaths in Northern NHS hospitals during the 1970s. It was covered up at the time, but the scandal came to light sometime in the early 90s, if I remember rightly. The idea that the NHS was marvelous before Thatcher is ludicrous.

Thatcher never actually cut health spending in real terms. In fact, health care spending tripled over her tenure at Downing Street from £9.1 billion in 1979 to £29.3 billion in 1990. The health budget increased some one or two billion every year under Thatcher, whilst, in the preceding decade, you were lucky if the budget increased by a billion a year.

Many mistakes about Thatcher's spending are made because people view the figures as a percentage of GDP rather than real spend figures. The thing was that Thatcher's increases in spend were largely enabled through deregulation that boosted GDP, enabling here government to increase spend "under the radar".

[TeddyBear]

Acquaintance in a public sector monolith told me there have been many job cuts in lower bands, no top or 2nd tier management cut. Those with power are looking out for themselves, not surprisingly, it's going to make for a dreadful mess, cutting those who are actually doing the work, leaving those left with the same targets, driving them to burnout and management hanging in as long as possible while "evaluating" rather than working.

[Executive Sadman]

The only conclusion i can draw so far is that they are cutting things which havent started yet. Which i guess makes sense. Its a lot easier to not give people jobs in the first place than it is to get rid of them later.