Elizabeth Truss

Budget 2009: The waste myth

Budget 2009: The waste myth
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Peter Gershon, David James and many others have scoured government for rare prey; wasted expenditure that no-one wants. And there are indeed signs that a culture of plenty, and a lack of cost control, has generated fat in Whitehall - the many new subdivisions of the Communities department testify to that. However, the unacknowledged truth is that the majority of government expenditure has taken place for a reason, however spurious, and there will be objections if it is taken away by what economists describe as the “losers”.

In our new report “Back to Black”, Reform argues that politicians will have to go beyond waste to achieve necessary reductions; tackling programmes and entitlements in the major spending areas to achieve change. We have identified £30bn cuts across the “big five”; defence, health, work & pensions, communities and education.

No department can be a no go area. This means the NHS, accounting for a sixth of government expenditure, cannot be put on a pedestal. Doctors’ pay which has risen inexorably needs to be restrained. Superfluous bodies such as Strategic Health Authorities, and health campaigns exhorting the public to stop “vegging out”, should be abandoned.

Reductions should be made to benefits and pension gimmicks for the well-off; to botched defence programmes that no longer serve a strategic need; and to the plethora of quangos that have sprung up in education and communities. These savings will not only serve the need to cut the deficit in 2010-11. They will also kick-start reform by removing the undergrowth that has furred up incentives and diverted departments from their core purpose.

Politicians must realise that these reductions should be grounded in a long term strategy for the state. Otherwise the result will be spending cuts on an across the board basis which will result in poor front line services. And, ten years later, there will be the inevitable calls for “more investment” and the whole cycle will repeat.  That is a fate that future taxpayers could well do without.

Elizabeth Truss is Deputy Director at Reform