Public sector employment and council waste

January 21, 2011 2:46 PM

In a post on Tuesday Chris Daniel pointed out that public spending cuts are vital.  Which they are.  And that councils should try to run leaner operations instead of passing cuts in central government grants straight to taxpayers.  Which they should.  You can't run a £100 billion structural deficit indefinitely and, after a decade in which tax rates have gone up not down you aren't going to fill that hole with more revenue.

He then made the simple point that it wouldn't be possible to make substantial cuts without some effect on employment.  Again, very realistic.  To support that point he provided a graph showing that under the last Government there was a substantial increase in public sector employment.

For making those simple points he is castigated on Liberal Conspiracy.  Essentially, Tim Fenton uses the term "clear inference" to set up a complete straw man.  Fenton claims that the graph was really a claim about local government employment, which it wasn't - it was an attempt to provide the broader context in a post about local government, and that actually the recent increase was due to the banks and earlier increases driven by expansion in services like the NHS.

Yes, the nationalisation of the banks did create a significant recent increase in public sector employment.  That doesn't mean the graph and trend Chris presented was misleading though.

Over the decade before the bank bailout there was a far more significant increase that came just from the public sector hiring a lot more people.  While all that hiring was often in services like the NHS, there is good reason to think that it has not translated into results.  There has been no discernable improvement in the pattern of the NHS slowly closing the gap with other European healthcare systems since the early eighties, for example.  The number of managers in the NHS has been increasing at a much faster rate than the number of qualified clinical staff.  Cost pressures, particularly on the staffing side, absorbed a lot of the additional money.  We can definitely get better value.

On the other hand, if you want to look at the numbers for well-paid staff in local government, then fine.  TPA research in 2009 looked at records in local authority accounts and found that:


  • Over the past eleven years, the average local authority has increased the number of people on £50,000-plus packages dramatically; an average of 7 people in 1996-97 has increased to an average of 81 people in 2007-08. This means, the number of staff earning more than £50,000 is more than eleven times higher than it was in 1996-97.

  • By contrast, in the economy as a whole, the number of people earning more than £50,000 has increased by only 3.2 times over the past ten years.



It was a shame Fenton wrote his rather smug post, instead of actually trying to get to grips with the data.In a post on Tuesday Chris Daniel pointed out that public spending cuts are vital.  Which they are.  And that councils should try to run leaner operations instead of passing cuts in central government grants straight to taxpayers.  Which they should.  You can't run a £100 billion structural deficit indefinitely and, after a decade in which tax rates have gone up not down you aren't going to fill that hole with more revenue.

He then made the simple point that it wouldn't be possible to make substantial cuts without some effect on employment.  Again, very realistic.  To support that point he provided a graph showing that under the last Government there was a substantial increase in public sector employment.

For making those simple points he is castigated on Liberal Conspiracy.  Essentially, Tim Fenton uses the term "clear inference" to set up a complete straw man.  Fenton claims that the graph was really a claim about local government employment, which it wasn't - it was an attempt to provide the broader context in a post about local government, and that actually the recent increase was due to the banks and earlier increases driven by expansion in services like the NHS.

Yes, the nationalisation of the banks did create a significant recent increase in public sector employment.  That doesn't mean the graph and trend Chris presented was misleading though.

Over the decade before the bank bailout there was a far more significant increase that came just from the public sector hiring a lot more people.  While all that hiring was often in services like the NHS, there is good reason to think that it has not translated into results.  There has been no discernable improvement in the pattern of the NHS slowly closing the gap with other European healthcare systems since the early eighties, for example.  The number of managers in the NHS has been increasing at a much faster rate than the number of qualified clinical staff.  Cost pressures, particularly on the staffing side, absorbed a lot of the additional money.  We can definitely get better value.

On the other hand, if you want to look at the numbers for well-paid staff in local government, then fine.  TPA research in 2009 looked at records in local authority accounts and found that:


  • Over the past eleven years, the average local authority has increased the number of people on £50,000-plus packages dramatically; an average of 7 people in 1996-97 has increased to an average of 81 people in 2007-08. This means, the number of staff earning more than £50,000 is more than eleven times higher than it was in 1996-97.

  • By contrast, in the economy as a whole, the number of people earning more than £50,000 has increased by only 3.2 times over the past ten years.



It was a shame Fenton wrote his rather smug post, instead of actually trying to get to grips with the data.

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