The axeman cometh
Peter Hoskin 11:29am
Philip Hammond, the man the Tories have tasked with overseeing spending cuts should they get into power next year, has just given a speech to Policy Exchange on reducing waste and improving efficiency. Much of it reheated existing arguments about, say, transparent public spending - which doesn't make those arguments any less valid. But there are one or two other points worth mentioning here
First, the very fact that Hammond was making this speech. Introducing him, George Osborne complained that the Labour government has made Hammond's potential role - Chief Secretary to the Treasury - a non- job, and that the Tories would restore it to being "one of the most important jobs I'm government". For the time being, this is all presentational stuff intended to send a message out to investors: that the Cameroons are taking the fiscal crisis seriously.
Second, I was struck by the ambitiousness of Hammond's efficiency rhetoric. He kicked off by saying that there was still plenty of room to make savings along the lines of those set out in the Gershon Review. But he soon added that, according to Tory calculations, up to £60 billion of public money could be wasted each year because of the government's failure to drive more efficient, private sector-style services. Or as he put it: "half of out structural deficit; down to a failure to get value for money." His claim was that this could effectively be cut without negatively impacting services.
But how? Well, there's the nub of it. Hammond didn't provide many details beyond stressing that the Tories are "philosophically" happier with reform, and are "ready to embrace change". In which case, the two most ear-catching announcements were that the Tories are establishing a shadow board to work on public sector productivity, and plan to set up a incentivising structure whereby public sector organisations get to keep any efficiency surpluses they make - rather than having them snatched back by the Treasury.
I suspect that we'll have to wait for a Tory government to understand how this works in practice. In the meantime, it's all about reassuring us - and, crucially, potential investors - that the Tories understand the scale of the debt crisis, and have at least some ideas to match it. Hammond was (only) partially successful in achieveing that today.
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Forlornehope
November 27th, 2009 11:47am Report this commentHere's a very simple way that you can drive out waste. Give all the budget to the delivery units that provide the services to the public. Any upstream provider of services to them can only get funding if the final service provider is willing to pay for it. So, schools get the whole amount of the education budget for each child. They can decide if they want to buy services from the LEA or from central government or anybody else. This is a common way of operating in the better run private sector companies and it works very well.
Draft Crunt
November 27th, 2009 12:35pm Report this commentI strongly suspect that much is being kept under wraps to defeat Labour's scorched earth policy.
Tell Labour how you intend to do something and sure as eggs are eggs, they'll try and create obstacles to stop you being successful.
DangerDave
November 27th, 2009 1:07pm Report this commentGood. Bring a big axe.
Naomi Muse
November 27th, 2009 1:45pm Report this commentIt's a difficult waiting game for everyone at the moment.
The old adage that 'we don't know what we will need to do until we've got in' is correct, as no-one knows what else the government has hidden - like the banking support, for instance.
It's also difficult for the other parties to say what they specifically want to do either, or the government will do something to block it, or take the idea as their own, announce it as an initiative calling it something else, and modify it or put it in the bin of 'non-stick, sticking plaster initiatives' that this government is well-known for.
Gordon Brown's hanging on to power for more months is doing extreme damage to all of us, to our international standing, and to our AAA credit rating.
It could be that Philip Hammond will implement a true budget on government rather than how a budget is currently interpreted.
If we go back to the meaning of a budget, it is that tiller in a Thames River boat which steers the vessel. What it most certainly is not is a figure that you want to spend up to whether you need it or not, which is the interpretation that has been current for some years now.
Are we in for a new wave of looking at budgets, costs and value, roles, productivity and, more to the point, service to the citizen, perhaps?
It is heartening that at least the Tories are facing up to the debt crisis, and it must have been a blow to them to find out that G Broon and the so-called 'independent' Bank of England were in cahoots hiding funding of the ailing banks and running a long-term secret society about it.
What other such information will fly from Labour's Pandora's Box in the time before the election is declared?
I do not believe this is the only secret that has been kept from parliament and the people by the current government and their tiny coven of decision makers.
The Laughing Cavalier
November 27th, 2009 2:39pm Report this commentA bonfire of the QUANGOs would do nicely. It would make serious inroads into the deficit and the sound of NuLabour's apparatchiks being prized away from their inflated salaries and expenses would engender a much-need sense of schadenfreude.
TimC
November 27th, 2009 2:52pm Report this commentForlorn Hope's comment about budget rings a bell. When supplying IT to a ministry I recall the complaint from the people in local offices along the lines of 'They've pulled all our IT budget back to the centre and we have to take what they give us.' I suspect in that instance the outlying offices would have chosen to spend that budget in a different way. As a supplier I might have regretted that, as a taxpayer welcomed it!
R King
November 27th, 2009 3:04pm Report this commentI'd like to see Hammond as the next tory Chancellor.
He exudes more authority than Osbourne.
John Moss
November 27th, 2009 6:18pm Report this commentForlornehope,
Why not give all the budget to the users of the services and let the providers sink or swim based on how good they are?
TGF UKIP
November 27th, 2009 7:58pm Report this commentLaughing Cavalier, being his usual astute and acute self, Guido points out that this will be the 18th Cameron Green Party quango. Plus ca change ....................
Fergus Pickering
November 28th, 2009 10:05am Report this commentWho the hell is Osbourne?
Naomi Muse
November 28th, 2009 11:45am Report this commentThought about this some more. As a business person the whole way the public services work is appalling and the facts that arise years afterwards about how these are run are shocking.
I agree with the principles written up by forelorn hope and, then John Moss.
Even the private sector is surprisingly dreadful in medical situations. I was on private medical insurance and went in for a hip replacement to a Nuffield hospital. There was no hot water in my bathroom, the food was totally disgusting and my medical progress was held back by my not being aided in a shower before I left for home. Building work proceeded all day with thumping and drilling too. Many apologies were forthcoming and two visits from the Matron, but nothing done to put it right and I felt cheated. The bill for this was £8k! It was worse than the NHS. I would not recommend that hospital to anyone. Despite that, they were booking unwitting patients in all the time. The only warning of it was in relation to car park spaces - so the implication was that no disturbance of the patients or smooth running of the hospital would occur.
Let's go with John Moss' suggestion and that would stop all the jobs for the boys consultancies being the providers of everything.
R King
November 28th, 2009 2:36pm Report this commentFergus Pickering
November 28th, 2009 10:05am
Who the hell is Osbourne?
Who the hell is Broon?
John Richardson
November 28th, 2009 6:03pm Report this commentIt seems that the Con. Party is strangely unexcited by the prospect of power.
I honestly do not detect any enthusiasm whatsoever for starting to make changes in our country.
This is because they are the same 'stateist' liberals as New Labour.
This is why they obviously have zero idea how to reduce spending. They do not identify Govn. spending as problematic in itself. Only the funding of that spending.
These people in the current Conservative party are idiots and mediocrities.Not one single brain amongst them. If other contributers honestly think they will 'manage' to cut spending they are being suckered.Or suckering themselves in despair.
I'm moving to a country with a future.
Dubai here I come !
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