Over the last 13 years – as a response to the plethora of initiatives and government intervention – the public sector has grown disproportionately in relation to the private sector.
Whether in response to school places, planning restrictions, waste, recycling, health, transport, libraries or parking concerns, this growth has failed to usher in significant innovation in practices or behaviours which tangibly demonstrate any real advantages to the average citizen.
To many people our oversized public sector is seen as distant, punitive, petty, risk averse, defensive and unnecessarily procedural. This is why – at the current time – many people are ambivalent about certain public sector job losses.
In recent years, the predisposition of politicians has been to manage, control and direct the life of the citizen. This has resulted in the inevitable public sector growth.
Three things have emanated from this: there has been a perceptible shift-loss of power, control and influence from politicians who have become increasingly irrelevant decision makers, having placed increasing powers in the hands of public servants, quangos and Europe.
Secondly, due to a very little tangible link between performance, pay and promotion, public sector performance has at best been patchy and at worst life threatening, as seen in the cases of Baby P and Victoria Climbié.
Thirdly, any attempt at innovation has been stymied through a culture that is risk averse and preoccupied with form ticking and overbearing, though necessary, targets.
The plethora of (well meaning) government interventions, initiatives and schemes to reduce disadvantage and lift more and more people out of poverty has enabled and facilitated a culture of high-level dependency. We are now reaping the benefit of an expanded welfare state providing support to a recalcitrant core of long-term unemployed.
We are also reaping the affects of a whole tranche of employees who, while not on benefits, are totally reliant on the state for an income.
The welfare state
Over the last decade, 5 million Britons have been out of work benefits. In 2008-09 the cost of welfare benefits reached £170bn and projections suggest that it is likely to approach £200bn within three years. In 2008-09 the Department for Work and Pensions spent more than £135bn on benefit payments, a rise of £40bn in a decade.
However, the largest single spend was on pensions (£62.7bn).
The public sector
Even though economic growth last quarter was better than expected (1.1%), the £6.2bn of spending cuts is beginning to have an impact. October's comprehensive spending reviewis already having a deleterious effect on sentiment, the financial markets and the assumption of businesses.
According to the Chartered Institute of Personnel and Development the recovery in the jobs market will stall as a third of employers expect to cut jobs over the next quarter.
Their survey of 600 companies suggests that the size of the cuts now being considered has increased and across all sectors employers are expecting to make an average of 5.5% of their workforces redundant, up from the 3.6% average cut being considered three months ago.
The severity of the financial crisis makes it categorically imperative for radical action to rein in the burgeoning cost of the welfare state and the bloated public sector. The question is how radical and how quickly this is done.
What the government can do
Historically politicians have felt they have the solution to all of society's problems. This hasinvolved increasing welfare support to those on the margins, new legislation, new processes and tools for measurement, new systems and organisations to create and manage society and people's choices.
Government cannot solve every problem. In attempting to do so the previous administration created a few problems as it took strident steps to address poverty and the socially excluded. Inevitable consequences of these initiatives have been an increase in government spending and the huge growth of the public sector.
I agree with Eric Pickles MP and his war on non-jobs and the government's plans to cut red tape. Even in the late 1980's there was systemic problems – I know many people who made the decision not to work in the public sector, and in particular for local authorities, because they felt it was overly bureaucratic.
But the twin goals of the coalition government ought to be to make the public sector more efficient – not simply shrinking it. On welfare, the focus should not primarily be about reducing welfare payments but about ensuring that welfare is a safety net which encourages and promotes work.
Floyd Millen is the Director and founder of the public affairs think tank Yes Minister
From Flip Chart Fairy Tales
From Bubb's Blog
