Tag Archives: expenditure

A better way to cut government costs

A supporting document to the Chancellor’s Autumn Statement includes the ritual undertaking to outsource more services to the private sector, despite the absence of hard evidence that such measures save money or improve service quality. But if George Osborne really does want to shrink the costs of the state, he needs to be tough on the causes of those costs.

The state does not grow, or even maintain itself, on its own.  Despite the decades-old practice of pointing the finger at self-serving bureaucrats being the cause of public sector aggrandisement – a charge that certainly used to have some truth – the real cause lies elsewhere. It is with those who at the end of the day provide legitimacy for the bureaucrats’ activity, in other words, Ministers.

The current government has just over 100 ministers with departmental responsibilities (ie not counting the Whips). Of these, 22 are Cabinet Ministers and a further 11 have “also attend Cabinet”. That leaves well over 60 junior ministers, almost all of whom are eyeing a place in the Cabinet.

Promotion up the ministerial ladder depends on many factors; bur key among them is being noticed. Junior ministers tend to get noticed by launching new initiatives which have some news value, however transient. Such initiatives can take many forms, including publicity campaigns, tiny pots of cash to bid for, making minor changes to the law or to a quango’s remit, launching a performance survey, publishing a new good practice guide, and so on.

However trivial, each initiative adds to the cost and scope of government. Officials need to work out the detail, consult inside (and perhaps outside) government, steer any necessary legislation if necessary, publicise and launch it, and then maintain whatever new process is the by-product.  And of course local government may be told to deliver it.

This practice – from which Cabinet Ministers themselves are not exempt – has led to the state getting involved in whole rafts of activity that it need not do. Why does the Foreign Office compile and publish a quarterly report on the Hong Kong economy? Why does government run a business support helpline? Why does the Department for Education publish a “step by step guide” on setting up a childminder agency, given that the information is available on the Ofsted website? Why does Defra produce annual reports on agricultural wages?

Ministers could put a stop to these and much more. But doing so reduces the opportunities for announcements and self-promotion. The Chancellor has his work cut out.