Tackling the public deficit must mean tackling the front line08 December 2009
The pledges by Gordon Brown and David Cameron to protect spending on the NHS - the biggest budget of all - discredit their Parties' commitments to tackling the public deficit and hide the truth over what the coming years of austerity will really mean.
New research out today from the independent think tank Reform shows we are right to question politicians' promises to safeguard front line services for two reasons.
First, because the bulk of public spending is on public services and front line workers absorb most of this cost. While there is much talk from politicians of cutting administrative waste, of the 1.4 million people working in the NHS in England, only 220,000 provide 'back office' support.
There are over 80,000 more nurses and 165,000 more teachers and teaching assistants than in 1999, while the number of civil servants has grown by only 23,000 in that time.
Official estimates show that staff costs account for over half of the total costs of the NHS, over two-thirds of education and three-quarters of the police. Reducing the deficit will therefore mean reducing these costs drastically.
What no politician is prepared to say is that for this to happen, the public sector headcount will have to fall - considerably. Reform estimates that the 6 million strong public sector workforce will need to shrink by the equivalent of around 1 million jobs in order to cut the deficit by close to £30 billion. Services that have seen the greatest increases in budgets and the worst falls in productivity, such as the NHS, should see the biggest reduction in costs and workforce.
Second, and more importantly, the front line of services is the biggest factor in their success or failure. On average public sector workers deliver lower productivity, worse sickness absence and lower morale than the private sector. Yet on average they earn more money.
Last year, the average public sector employee lost 10 days to sickness, while in the private sector the average was just over 6 days. Public sector workers can expect to receive a pension of two and a half times that of someone in the private sector (£28,900 compared to £11,600) and average redundancy payments in the public sector are over double that of the private sector (£17,926 compared to £8,891).
Poor management in the public sector, of both people and money, is the biggest factor in these measures and the root cause is lack of accountability to users of services or to local electorates.
Despite the rhetoric of reform from both Government and Opposition, politicians have fallen short of the actual policies to deliver these changes. The structures and cultures of our public services have remained largely unchanged while government spending has risen by almost 50 per cent in the last decade.
In a white paper released on Monday the Government set out plans to deliver £12 billion of efficiency savings in Whitehall over the next four years. Whitehall does need to become more accountable, with greater transparency over salaries and performance and an end to the 'job for life' culture of the public sector. But efficiency savings alone will not be enough to fill the size of the public finances hole.
What is missing is political leadership. Politicians must end the charade of making speeches about the urgent need to tackle the budget deficit one day followed by announcements of protecting front line services, or even new spending commitments, the next. This leaves voters baffled over what their choices are and it send mixed signals to public servants who will be responsible for driving through these changes.
Instead, politicians must spell out what the coming years of spending cuts mean - radical changes to front line services.