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April 26, 2004
The billion pound black hole

As governance in Britain staggers from one monumental cock-up to another and the public services gently decline, the level of surrealism mounts. The Prime Minister believes that the public services are actually improving and it's only the wicked media that say otherwise. He thinks this because apparently when pollsters ask people what they think of their local school/hospital, they reply 'It's great!' but when they ask them what they think of the public services nationally, they say 'They stink!'

In fact, people have always tended to be loyal to their local institution while slagging off everything else; nothing new there. But now consider two further pieces of rather more objective information. Yesterday's Sunday Times reported the revelation from a leaked Cabinet document that most of the extra money being pumped into the public services is simply vanishing into a black hole:

'The government has pumped extra tens of billions of pounds of taxpayers’ money into the NHS, schools and police forces but the confidential memo reveals that productivity in the public sector has slumped by 10% since 1997. The document discloses that in health and education, which will be the battleground in the forthcoming general election, the situation is even worse with productivity down by between 15% and 20%. This means every pound the government spends is producing up to a fifth less in public services than in 1997. In the past the government has publicly admitted only a 3% fall in productivity since Blair won office. Experts say the new figures suggest £20 billion a year of taxpayers’ money — equivalent to almost 6p on basic rate income tax — has been wasted on soaring wage claims and burgeoning bureaucracy, at the expense of frontline services.'

As the paper observed, therefore, the public perception that things were not actually getting better at all was true. Ministers responded in classic New Labour style by deciding once again to economise with the truth:

'The solution, outlined in the minutes of the meeting, is classic new Labour: ministers discussed how to change the way in which the statistics — prepared by the Office for National Statistics (ONS) — are presented in order to flatter the government’s performance. “A change to the definition of productivity in the public sector was vital, particularly in measuring health outcomes,” the minutes recorded. Even though no spin doctors were present, the group also discussed how to develop “credible stories”, the need for “lodging key delivery facts in the public’s mind” and the importance of setting up a “proper system of rebuttal”.'

Oh dear. Caught with their hands in the till again. But for that special twist which so enlivens contemporary political issues, now consider another story in today's Guardian which tells us:

'The government spent at least £1bn on management consultants last year, making Tony Blair's administration the UK's biggest buyer of business advice. According to the figures, published today by the Management Consultancies Association central government doubled its spending on management advice last year to nearly £3m every day. It is now the largest single buyer of consultancy services and its growth is "far outstripping the rates of growth seen in other sectors". Public sector bodies spent an additional £300m. Private sector clients, meanwhile, are clamping down on costs and their spending on advice from consultants shrank by 4%. The figures are likely to be an underestimate of the true extent of the government's reliance on external management consultants for delivering improvements in public service standards. MCA members represent only 60% of the sector, which generated £10bn in fees last year.'

So not only do we have an incompetent government machine; it has actually been spending a billion of our money on asking management consultants how to run the country. Doesn't it occur to anyone that the one thing management consultants don't do is, er, manage anything? Doesn't this explain why so much money being poured into our public services has been wasted on bureaucracy and red tape? And don't they realise that the taxpayer is now being forced to shell out for this incompetence twice over?

Posted by melanie at April 26, 2004