Is the UK elite too soft to cut public spending?

8 09 2009

AP3JW14CAIC0UF9CAP1ZS3HCA08CDRACA06ZKDNCAO1S3HRCA2QEX80CAH39K4JCASTQ9QWCA6W1DG3CAT17RVCCA3R31ZVCAYORE6JCAP4TZJJCATQOWU7CADGR38OCA9AFAVJCA2EEGUBCAV998NYCAM0TUPO‘There is no one in the civil service with real hands on experience of fiscal hard times. They know they have to learn very fast.’

This comment from an academic who has been teaching civil servants about the UK’s economic past sums up some of the problems facing the UK political elite in dealing with its current economic black hole. In fact the civil servants who administer the state on a day to day basis are lacking in many of the qualities which enabled the UK to survive and prosper in the past, not just the experience of dealing with recession. One symptom of this has been the increasingly porous character of state institutions with leaks and whistle blowing becoming more and more prevalent.

More importantly, over recent years as expressed through the policies of New Labour, the state has become used to dealing with market research led, short term policies rather than longer term strategic ones. This is all fine when the issues concerned are trivial domestic political issues, such as drinking in the streets. The problem is that when a serious and profound problem does arise, the ability to respond effectively does not exist.

Now that such a deep problem, the recession, has appeared the state is confronted with an enormous problem with which it is ill equpped to deal. The price of bailing out the UK financial sector has been to create an enormous budget deficit. There are two main ways that this could be managed. One would be to mobilise the resources of  the state into stimulating new productive investment in order to grow the economy as fast as possible. But growth has become a dirty word in the UK unless caveated by the need for ‘green ‘ growth.  The UK economy, along with most of the developed economies, needs fundamental restructuring. New growth can only come out of the destruction of the old and out-dated. The kind of dynamic political leadership needed to push through such a programme simply does not exist.

The second way of managing the debt is more short term, and therefore more attractive to the UK elite, and that is to cut public spending in an effort to balance the books. Even this approach makes politicians of both main parties feel extremely uncomfortable. Both parties are casting around for the language in which to disguise the cuts both are planning to make.

As Frank Furedi has argued in relation to the Lockerbie affair, the UK elite has become so incoherent that it has become incapable of managing even the day to day affairs of government effectively. The UK elite has become soft and ineffective at its heart. One expression of this has been the fact that despite the huge amounts of money put into education and health over the past ten years these public services are still hugely inefficient and unsatisfactory.

The good news for public sector workers from all this is that no government, Labour or Tory, is likely to have the strength to push through the kind of public spending cuts which many now fear are necessary. There have only ever been two prior occasions when public spending has been substantially reduced, after the massive increases caused by World War 1 and World War 11. It is quite possible that only external pressure, from the IMF for example, would make this happen today. The bad news is that the inability of our political elite to do this shows it is equally incapable of taking the tough decisions needed to keep the UK on a growth curve in the longer term.

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6 responses

8 09 2009
Michael Massey

I comment as a civil servant from 1975 until 2005 when I volunteered to become an “efficiency saving” and took voluntary early retirement. In economic terms I would have been better keeping my head down and working out my years. But to borrow from the Peter Finch character in Network I ended up mad as hell and could not take it any longer.

I am very aware that I may just suffer from “old fart” syndrome but I left because I found myself increasingly out of synch with the prevailing culture. And I recognise that it may be a bit po-faced but I was deeply imbued with the traditional civil service culture: respecting an impartial service apppointed on merit, working within a culture of collective Cabinet responsibility, deeply parsimonious with taxpayers’ money and with Parliamentary business the priortiy that overrides everything else.

All that has changed.

Policy is driven by short term presentation – witness the cancerous growth of communications, strategy and diversity units.

Process reigns over substance – witness the “stakeholder” engagement units, and witness the numerous “machinery of government” tinkering, stitching and unstitching departments, each one costing fortunes and diverting resources from the substance to internal reorganisations and drafting new missions, objectives and all the rest of it, all fed down into increasingly convoluted personal objectives and targets to replace the last set on which the ink has hardy dried.

Parliament is treated with contempt – witness the extraordinary number of PQs that are simply not answered; the currency of legislation has been devalued: witness the laws that are passed “to give a signal” but are unimplementable eg supposed statutory duties like the one of ending fuel poverty which when tested by FoE was found by the courts to be meaningless.

White Papers have become throwaway PR glossies rather than serious policy statements

There has been “grade drift” down by at least a grade perhaps two; staff appraisal has become as meaningless as the formulaic drivel that infected school report some time ago and it has become so difficult to get rid of wasters that the stock strategy is to promote people out, passing the problem to someone else.

And above all, and finally to get to the point of your piece the instiututional memory which used to be a real strength has been thrown away. Experience is not seen as something to value and exploit but rather as a reservoir of resistance to change and “modernisation”. Progress up the Whitehall greasy pole has increasingly depended on skills to do Powerpoint presentation enthusing about the latest management consultant fad rather than analytical skills and experience to understand wider and longer term implications and unintended consequences to avoid; to ask difficult questions and find solutions rather than stitch together reams of management and politically correct bullshit about commitment to diverse sustainable communities with positive world-class outcomes where Britain leads the world etc etc

Can’t now remember the precise numbers or source but recall a figure from a couple of years back that the average tenure among Treasury officials had dropped to under 4 years.

So most will hardly have had experience of the Blair years let alone any economic downturn and will have known little other than the response to any issue being to throw money at it and set up yet another quango to keep reponsibility for ever making a decision a good distance away – and provide a nice little earner for party chums.

The client state and identity politics that have been key parts of New Labour will make change very difficult but the public policy culture will need to reward those in Whitehall who save rather than spend taxpayer’s money. But it will need to be based on net savings over a period with reward perhaps tied to pension entitlements rather than immediate pay.

8 09 2009
Andy P. Davies

Rob,

I am somewhat confused by your blog. You and Frank Furedi seem to be completely oblivious to the fact that you used to claim to be Marxists. It seems you now think you are the best advocates of managing Capitalism.

11 09 2009
John Roberts-Whitley

Rob, the title of your post mirrors what I have been wondering for some time, namely the seeming inability of the state to get things done, to make things happen, to make and execute decisions and follow them to conclusion. Now prove me wrong on this but it seems to be a feature primarily of ‘Anglo-capitalist’ countries esp. the UK and US. I’m not sure why this is but may be due to the fact that the state generally is held in lower esteem compared to, say, France or Germany. Not to mention the constant refrain from the right wing tosspapers about public servants etc being ‘unproductive leeches’ on the ‘hard pressed taxpayer’ and so on. (I wonder how the press will react when the aforementioned ‘leeches’ have all lost their jobs and are living on benefits but then hypocrisy is a privelige of being on the Right.)

Obviously with us being in so much debt the axe eventually will fall somewhere and certainly when it comes to quangos and the busybody classes there’s plenty of room for imaginative pruning. I’m fearful the axe will actually fall on those front line services that we all need, ie health and education- doubtless with roars of approval from the tabloids. I see no obvious answer to this issue.

@Andy P. Davies. I’m as confused as you are mate, me being a reader of Living Marxism in times gone by. We scratch our heads in vain. Unless Rob wants to explain all… ;o)

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