The £15 billion cut in public spending 3

TaxPayers Alliance Economics 101

Darling's budget projections are based on some wholly implausible assumptions about public spending.

Post the next election he forecasts that current spending growth will fall to 0.7% pa in real terms (2011-12 onwards). That's a virtual halving from the 1.2% pa he incorporated in November's Pre-Budget Report. Yet while real public spending restraint is always difficult, Darling claims to be making this cut painlessly.

How?

By having another round of the magic Gershon efficiency programme, that's how.

Gershon was launched in 2004 by Gordon Brown, with the aim of getting better value for money in Whitehall and across our public services. The government claims it has already "saved" £26.5bn pa.

Yet when the National Audit Office did a detailed study of these claims, it found that only one one-quarter of them were dependable – in other words, the rest merely comprised the usual Whitehall deckchair rearrangement, or cuts in service standards. There was no magic. Indeed, the NAO found that some of the Gershon "savings" had actually resulted in knock-on cost increases elsewhere. A classic example was the surge in emergency hospital readmissions caused by sick people being discharged early from hospital in a Gershon drive to make "more efficient" use of scarce beds.

Darling is now claiming he can save a further £15bn pa from more of the same (including £5bn he announced in the PBR). Yet the detail of how he will do this includes several of the measures we know to have failed already, such as another £500m pa from those self-same counterproductive early hospital discharges.

There is no doubt that the dire state of our public finances demands some substantial cuts in future spending, and an attempt to produce £15 billion of savings is a good start. However, £15 billion is the tip of the iceberg, and these savings are not guaranteed to actually materialise as promised.

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John Brown

Could not agree more with the sentiment of the article. You just have to look at the NAO report on the Red Dragon project at St Athan to see how clueless Government Departments are. How the f*** can MoD and the Welsh Authorities manage to convert a cost saving project into yet another drain on public resources. Easily apparently – by simply having differing departmental agendas and strategies. So no sooner than MoD agreed to build a new super-hangar than they decide to hold a strategic review the outcome of which is to remove the work that the super-hanger was built for from the base. Yet another criminal waste of taxpayers money. Darling’s latest round will be no different – all spin, smoke an mirrors!
Roger Baker

The main problem with saving costs in the public sector has always been that its employees cannot be made redundant against their will. They therefore have to be offered obscene amounts of voluntary redundancy pay or retired early at vast cost to the taxpayer.
Since the government on many occasions has shown itself to be too timid to take on the public sector unions, we are faced with the “smoke and mirrors” of cuts that never materialise or cuts in services to the public while the number of bureaucrats sitting behind their desks remains the same.
Only a complete revolution in the employment terms of public-sector employees (including pensions)will allow any real efficiency savings to be made.
As they say: “don’t hold your breath”!
http://profile.typepad.com/DonaldG Don G

The Gershon agenda, and the McClelland agenda in Scotland, centres on creating agencies staffed by more public sector buyers to buy in bulk. These prats were obviously buyers, not economists, but our politicians seem too thick to realise the long term economic destruction these guys have started.
Now instead of each council, NHS, Uni etc buying things locally, these many, centralised buying agencies aggregate the contracts into mega-contracts which then have to be advertised across Europe. The first contract from the new “Procurement Scotland” has just awarded all the country’s public sector stationery contracts to Lyreco… a French company, and removed them from dozens of small and local business. The NHS National Procurement Scotland aggregated all the Telecoms work into a big contract, and replaced many small and local suppliers with… BT – a PLC who recently came bottom of a YouGov survey for customer satisfaction!!!
So the planned efficiency savings along the Gershon/McClelland lines which Brown seems to like may be good for reducing invoice cost, but destroys the local economies… which Mandleson is trying to protect! Just get rid of all these agencies and take the savings from there.