David Blackburn

Where to start cutting

Where to start cutting
Text settings
Comments

Michael Portillo believes that a future Tory government, like those that came before it, will not succeed in cutting public spending. I agree with Pete: public finances are so parlous that cuts have to be made. Demolishing the state is not an overnight job; it will take time and cost money, and so it should because the stakes are too high for a quick fix, cowboy politics solution. But, immediate savings are to be made through efficiencies.

‘Efficiency savings’ are derided as being insubstantial. Such an analysis is simplistic. Endemic waste is perpetuated by irrational systems. The Department for Work and Pensions runs an administrative budget of £2.7bn. That is colossal - half an aircraft carrier’s worth of pens, paperclips and endless forms, which trap claimants in the world’s most complicated welfare system. Rationalisation is the order of the day and Iain Duncan Smith’s dual benefit reform provides the answer to the welfare conundrum and gives £3.7bn in annual savings.

 

If anything that figure is modest: other savings will be made through simplifying the system. An unpublished internal DWP report estimates that £900m is wasted every year by claimants miscalculating their entitlement. Streamlining benefits would significantly reduce the chances of confusion arising. The same report found that nearly £900m is lost through deliberate fraud. The current welfare monolith is easier to exploit than a gaggle of inquisitive convent girls; reform should close loopholes and ease the pursuit of benefit thieves.

 

Possible efficiency savings at the DWP don’t end there. A separate report estimates that administrative incompetence, which the authors sweetly term ‘silly mistakes’, cost the taxpayer £2bn per year. Along with death and taxes, incompetence is one of life’s certainties, but £2bn is several cock-ups too many. Tackling entrenched public sector incompetence and the recalcitrant civil service make Francis Maude’s provocative civil service reforms necessary to enable essential and cost effective public service reform, all the Tories need do is adopt IDS’ idea and get tough on inefficiency.