Tuesday, January 17, 2006

British efficiency?

One of the pleasures of living in London is being able to read The Business, one of my favourite weeklies, in its printed form on Sunday morning (not to mention the fact that I've found out that I can easily get a "complimentary copy" from the Holiday Inn around the corner from my house...).
This week they ran a hair-raising essay on public sector inefficiency by the authors of a new book: The Bumper Guide of Government Waste. It is always a comfort to find like-minded radicals (they advocate, as do the Liberal Democrats, abolishing the Department of Trade and Industry outright!):
Nothing better symbolises the cancerous waste at the heart of government than the exploding bills on consultants. Despite a public sector recruiting binge and 650,000 new employees since 1997, government spending on consultants has almost doubled in the past year to an annual £2bn – equivalent to adding a penny on the rate of income tax or an £80 tax refund for every household.
Everybody in government is at it: the obscure Department for Constitutional Affairs spends £9m on consultants, compared to £700,000 in 1997. One of the consultants is on a daily £2,100 and another is on £800 a day. The Home Office spent £74m hiring 142 consultants in 2004 – a cool half million each. One project involved interviewing 300 drugs dealers and smugglers to assess the business model of the average drugs dealer, perhaps not the best use of taxpayers’ money.
After consultants, the other great government waste scandal is information technology. The bill for recent and continuing projects is estimated to be £30bn. Yet according to the Public Accounts Committee, one in three projects is not checked properly for budget and systems failures to prevent deadlines being missed and plans running over budget. The resulting waste costs taxpayers billions of pounds each year.
Economists worldwide increasingly agree that gross inefficiency is endemic in Britain's public sector. The most rigorous assessment of the problem comes in a European Central Bank working paper by Antonio Afonso, Ludger Schuknecht and Vito Tanzi. They discovered that if Britain's public spending were as efficient as that of the US or Japan, the British government could spend 16% less than it currently does while still producing the same level of public services. Public spending and taxes could be slashed by about £83bn without any deterioration in service quality.
Do read the whole thing. The litany of botched or irrational projects is simply staggering.
However anyone who thinks a revitalised Tory party will, Maggie-style, put some order into this vision of mayhem has another think coming. Yesterday's Financial Times ran an excellent editorial by John O’Sullivan about three groups of people who have been cast under an illusory spell by David Cameron, the new Conservative leader:
The activists are trying to convince themselves that he is pulling off a brilliant trick. He is presenting orthodox Tory ideas in glittering centrist garb – or, if not quite that, adding new ideas to the existing corpus. For instance, asking Bob Geldof to help forge a world anti-poverty programme may be a roundabout way of undermining the Common Agricultural Policy.
This is too hopeful. If Mr Cameron abandoned the Tory policy of "nationalising" the EU common fisheries policy because he did not want to deal with an EU refusal, he will certainly not challenge the CAP. It is also unpersuasive. As the philosophical innovations mount – abandoning choice and selection, embracing "redistribution", endorsing global economic regulation – the case that Mr Cameron is not changing the substance of Toryism becomes ever more implausible. Even if he secretly intended to govern like Margaret Thatcher on entering office, he is creating public expectations that would make such a course impossible.
A smaller group of modernisers, perhaps including Mr Cameron himself, is in the grip of a more subtle delusion. They see the new leader deliberately “dissing” traditionalist supporters in order to win over LibDem voters. And Mr Cameron’s early overtures have paid off to the extent of causing chaos in the LibDem party.
But there are obvious problems with this strategy – notably, that even today there are many more Tory voters than LibDems. To complicate matters further, the strategists seem to think that the nationalist and moral traditionalist voters they want to drive away are relatively few in number. Many indicators suggest otherwise: for instance, in countries with proportional representation such as Germany the economic liberal parties poll many fewer votes than the moral conservatives. Nor do the "dissed" Tories lack somewhere to go. They could stay at home as about 12 per cent of the electorate, including many pre-Major Tories, have done in the last three elections. Otherwise, the UK Independence party, the British National party, even the Labour party under the new flag-waving Gordon Brown would all welcome them.
That leaves the party faithful. The Tories think they have elected Hugh Grant. In doing so, they believe, they have solved a nagging existential problem. Until the mid-1980s, the Tory faithful felt themselves the natural party of the middle class. But since then they have drifted apart as the Tories became Thatcherised and the middle class changed its self-image, political opinions and sensibility – became, in a word, "Curtisland" after Richard Curtis of Four Weddings and a Funeral, Notting Hill, and Love, Actually, in which a multi-faith, multi-ethnic London middle class swears terribly but is otherwise awfully nice and holds excruciatingly nice opinions. This is a global phenomenon as parties across the English-speaking world change composition with blue-collar workers moving right and others left. But the Tories don’t know that and would like to be accepted in Curtisland once again.
None of these spells, alas, has anything to do with the actual or potential problems facing Britain in the coming decade. To see how the Tories will handle those, we are waiting for Geldof.
Do read the whole thing. Meanwhile the UK Independence Party, apparently having recognised some of these realities seems to be attempting what may be a very smart move for them:
The UK Independence Party, which campaigned for Britain’s withdrawal from the European Union, is to lay out a domestic agenda aimed at wooing Conservatives dismayed with the leadership of David Cameron.
The party has appointed David Campbell-Bannerman, great nephew of the former Liberal Prime Minister Sir Henry Campbell-Bannerman, as its new chairman with a remit of conducting a radical libertarian policy review.
It aims to recast itself as a party campaigning for independence from government "whether in Brussels or in Westminster" and believes it can win funding from disgruntled Conservative donors.
After last week’s conferences, UKIP – which finished third in the 2004 European Parliament elections – decided to pitch itself as the only alternative to what it will call the "social democratic consensus" in Westminster.
Its policy review is likely to result in calls for a flat tax in Britain, and full liberalisation of the state health and education apparatus using a voucher system. This will in effect position it as a protest party for libertarian Conservatives.
I don't know much about UKIP, and what little I have heard is not very flattering, but I'm certainly willing to hear them out, and if they have reasonable proposals (and David Cameron completely loses his marbles, as he seems intent on doing) they may prove to be an interesting new entity in British politics. It is a time of upheaval in the UK political spectrum, with the Liberal Democrat leadership race wide open, the sudden "Cameronization" of the Tories and the waning influence of Tony Blair as people look to the expected transfer of power to Gordon Brown at the end of his term. It will be interesting to see how things turn out.

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