Gordon Brown's state is still getting fatter

As Gordon Brown gets closer and closer to the threshold of Number Ten, ConservativeHome today publishes a powerful report on the bloated and innefficient public sector that he has created.  The report - The Machinery of Government (And How To Reform It) - has been written by William Norton, a regular ConservativeHome contributor.  William has advised the Tory frontbench on tax and legislative affairs since 1998 and was a member of the permanent staff of the James Review. 

In William's comprehensive study you will see - for the first time - a list of every entity, body and quango controlled by Government, a far fuller list than the Government chooses to publish itself.

You will also read extraordinary stories of waste:

• The Royal Mint, for example, has conspired to turn coining money into a loss-making activity;
• The Department for International Development has not one but two UK headquarters in order to fight third world poverty; and
• The Assets Recovery Agency costs more money than it recovers from criminals.

William's most important contribution, however, is not so much the paper's compelling account of the inefficiency and size of Labour's state but his analysis of the root causes of why the British state has become so inherently wasteful.  Rather than simply adding to the catalogue of criticism and despair, his ideas to reform 'The Machinery Of Government' provide a plan to restore efficency and purpose to the British state.

William's crucial insight is that reform depends upon ensuring that the public sector itself embraces reform.  Slimming the state will not be implemented effectively, William writes, in a climate where the departments and agencies (“us”) see the reformers (“them”) as hostile outsiders.  Public sector bodies need to be persuaded - internally - of the necessity and merits of reform.  William is hopeful that this can be done if there is genuine and consistent support from the Prime Minister:

"Civil servants are just employees.  They are not a hermetic order of invincible wizards.  They have more generous pension arrangements, and are harder to dismiss, than most employees.  They may deliberately see themselves as even more divorced from the interests and objectives of their Board of Directors than most employees.  But they are still employees.  They have the same propensity to swing the lead as other employees, and the same basic desire to enjoy a fulfilling, satisfying work experience and the knowledge that they have achieved something worthwhile.  (In fact, because they work in the public sector, there is an excellent chance that they have above-average levels of public spiritedness.)  Above all, they will have middle-managers who want to become senior managers.  They will respond to modern change management techniques in the same way that any other group of employees respond (for good or ill)."

Download The_Machinery_of_Government.pdf

Comments

[Chris Palmer]

I hope William will excuse me for not reading his entire document at 145 pages yet (I will have to browse through it fully later.) However, briefly picking up on the Key findings featured above; how is it that the Conservative party can be pledging to expand public services funding without reducing any needless expenditure? With so much obvious waste within £523bn spending on the public sector, surely a Conservative Government would be able to find some sort of means to reduce unnecessary costs rather than just seek to expand it further? At the moment, under the guidance of Oliver Letwin, and bearing in mind recent statements, that would seem an impossibility.

[Donal Blaney]

There was a detailed debate about this earlier on the Today progr....oh, hold on - no there wasn't. Because it doesn't fit in with the BBC/Guardian agenda (unless and until they debate this excellent document in the context of Tory cuts and nasty Conservatives wanting to privatise air, slaughter the first born and bring back slavery)...

[Big John]

The disollution of the monasteries had a huge effect on the people, some bad as well as good, but was necessary. The disollution of the Civil Service may well be as difficult but is just as vital for the wellbeing of the country, long after I am gone.

[Will T Power aka The Orator]

Hark! I hear echoes from the commons chamber. What's that they say? An Etonian voice answers, "Fat government is just too unfit to deliver". Oh how I long for the days of Ollie Letwin at his belt-tightening best. Hooray for the Homies keeping this on the agenda.

[Bob B]

There are good substantive reasons for pruning back government policies and commitments - a selection of news items reporting monumental wasteful and ineffective government spending are included here below with links to sources. Readers here can probably add many more from following the news but the inevitable political issue with inviting a stark headline such as: Tories to slash public spending, is that many folks don't follow political news stories closely and are therefore apt to interpret such headlines as a looming threat to the wellbeing of their families.

We can be absolutely sure that is precisely how Labour will present promises to cut public spending when it comes to the general election and the fact is that Britain's tax burden (tax revenues as per cent of GDP) is relatively light in comparison with most other EU15 countries. Try the Public Finance section in the: OECD Factbook 2006:
http://titania.sourceoecd.org/vl=8756024/cl=21/nw=1/rpsv/factbook/

Examples of government waste:

"A failed government scheme to offer UK university courses online has been branded a 'disgraceful waste' by MPs."
http://news.bbc.co.uk/1/hi/education/4311791.stm

"Truancy rates in England's secondary schools rose by over 10% last year, according to government figures. Despite £900m spent on anti-truancy initiatives, the annual figures show the highest truancy rates since 1994."
http://news.bbc.co.uk/1/hi/education/4265536.stm

"The government's flagship Sure Start programme is setting back the behaviour and development of young children in the most alienated households, according to the first big national evaluation of the scheme. Though the £3bn programme is benefiting some poor families, the government commissioned study published yesterday concluded that children of teenage mothers and unemployed or lone parents did worse in Sure Start areas than those in similarly deprived communities elsewhere."
http://politics.guardian.co.uk/publicservices/story/0,11032,1654721,00.html

"The government's tax credit system lost at least £460m two years ago because of mistakes, or fraud by claimants. The estimate is contained in an audit of the Revenue & Customs' accounts by the National Audit Office."
http://news.bbc.co.uk/1/hi/business/4327260.stm

"The Public Accounts Committee (PAC) has denounced the government's new tax credit system as a 'nightmare'. In their second report so far the MPs say tax credits have been routinely overpaid to 1.8 million claimants. The committee also claims that the system may be fatally undermined by its complexity."

"Billions of pounds are being wasted by government departments which have failed to learn the lessons of the past, a Commons committee has warned.

"'Basic errors are repeated time and again,' the Public Accounts Committee said, adding public services were marred by complexity and bureaucracy."
http://news.bbc.co.uk/1/hi/uk/4501872.stm

"A rise in young people carrying mobile phones and MP3 players is being blamed for street robberies and muggings jumping by 8% last year. The latest crime figures include a 10% rise in gunpoint robberies."
http://news.bbc.co.uk/2/hi/uk_news/politics/5195910.stm

"The government has added to its litany of computer system cock-ups with a £300 million system at the Ministry of Defence which has had to be overhauled."
http://www.theregister.com/2001/11/08/government_cocks_up_another_computer/

"Auditors are to launch another inquiry into the £6.8bn NHS IT upgrade project. The National Audit Office only reported in June on the scheme to link 30,000 GPs with 300 hospitals in England, Computer Weekly magazine says."
http://news.bbc.co.uk/1/hi/health/5313974.stm

"The government announced yesterday that it is abandoning the use of private finance initiatives for computer projects after a string of blunders across Whitehall. High-profile PFI projects which have run into problems include new IT systems for the child support agency and the criminal records bureau."
http://business.guardian.co.uk/story/0,3604,998873,00.html

Btw civil servants have families and votes.

[James Maskell]

Donal, slaughtering the first born is still a key cornerstone of Tory policy...didnt you know that? I missed that sacrifice to Thatcher by 15 minutes!

[Tam Large]

This is the same bloated and inefficient Public Sector which, according to Dave and his cronies, will not be cut, but will have even more spent on it under the crypto-conservative Cameron Party.

Sorry Dave, it makes no sense to criticise on one hand and then pledge even more cash down the plughole with the other.

[Simon Chapman]

Huge congratulations to William on producing this. I will comment once I have had a chance to look at it.

[Anarchocap]

Of course Brown has bloated the civil service enormously, the idea is to create a vast labour voting client state. Cameron is obviously intending to take it a step further hoping to out left NuLabour. If by some cataclysmic event the LibDims were elected they would out left Cameron. We have a growing political elite class all centred around each other and excluding the voters. All feasting off the public purse. No power on earth other than a refusal of the voter to vote for any of them, will alter the situation. JOIN THE "NONE OF THE ABOVE" PARTY.

[Bel]

This looks very interesting. I look forward to reading it, after which I will make my comments.

[Mark Wadsworth]

If you don't have time to read 145 pages, here is a brief guide to Nu Labour waste.

Total increase in state employees (above and beyond 200,000 or so extra nurses, doctors, teachers, policemen) since 1997 = 700,000 or so (taken from Labour Force Surveys and similar sources).

Average cost of a civil servant, including salary, pension contributions, office space, IT, telephone, say £50,000 per year.

700,000 x £50,000 = £35bn.

Cutting waste by £35 bn is enough to cut at least 5% - 10% off the rates of income and corporation tax.

[Denis Cooper]

Well done, page 44: "A detailed programme of study by the Conservative Party Policy Unit (before it was itself disbanded) identified and dissected five “drivers of regulation” afflicting British society", and the first two are:

"1. The European Union, which in its mission to manufacture a continental polity is keen to acquire competence to legislate on as many issues as it can on a one-size-fits-all basis;

2. Gold Plating, the unfortunate tendency of Whitehall civil servants to take any regulatory proposal from Brussels and make it much more complex (often leaving Brussels to take undeserved criticism);"

On 2., of course the main reason they do that is simply because they can.

Take away their shield of the "we have no choice because being in the EU club we have to obey its rules" or more generally "we have an international obligation to do this" excuse, and they would become more accountable for their actions.

[Bill Melotti]

None of the critics of David Cameron seem to get what a couple of posters put in here. Civil servants have families and votes, and Brown has tried to create a huge Labour voting block of civil servants.

As was mentioned in the summary, civil servants are likely to have a sense of pride in their work. I certainly resented the poor management and waste when I worked in the public sector. So Brown may have tried to create a huge Labour voting block, but he hasn't necessarily succeeded.

Efficiency and waste management could be improved without killing our support in that block. However just resorting to cuts at this stage is unlikely win us votes.

Face it, for the first term of a Conservative Government, big government is probably here to stay.

[One of the enemy's minions]

The idea that the Civil Service is like some giant business is a very poor model for the way the Civil Service really operates.

There are several characteristics of the British Civil Service for which the 'business' model is highly inaccurate. Firtsly, organisationally its basic structure and modus operandi does NOT derive from the business world, but from the military: it is the chain of command. Secondly, it has management by committee. Thirdly, there are virtually no penalties for serious systemic failure at Senior level - at worst, failing Senior Civil Servants are moved sideways. In other words, there is no incentive to learn from past mistakes. Forthly, the culture at the very lowest levels (staff - those without any management responsibilities) is such that any initiative is seen as a serious character flaw (such that after a few years' as an AO level one is almost incapable of employment outside the Civil Service).

Also, what the above summary ignores completely is the political nature (in all senses of the word) of the organisation. Mr Norton obviously needs to re-watch a few episodes of 'Yes Minister/Prime Minister' to see where the real power often lies. As my late father, a former Senior Civil Servant himself, used to tell me: "the nearer the truth, the greater the libel".

[Michael McGowan]

"Face it, for the first term of a Conservative Government, big goveernment is probably here to stay".

To which I would add, and not just the first term either, assuming they are lucky enough to get re-elected. Hence a lot of people are wondering what is the purpose of the Conservative Party....other than to provide a springboard for enriching and empowering Dave and his mates?

[Yet Another Anon]

The Royal Mint, for example, has conspired to turn coining money into a loss-making activity
Float it on the Stock Exchange.

Replacing spending on Health and Education with low interest loans and transferring all schools and hospitals from the public sector to private charities limited by guarantee and requiring them to cover their costs by charging for services.

[George Hinton]

The bloated public sector is an inherent sign of the leftie dogma of old labour.
Like all proto-autarchies they wish to control everything, a feature of our so-called brothers in europe.
By creating this amorphous mass they hope to create dependancy and dictate voting intentions of a large group by highlighting the threat cut-backs pose to these people.
It will take years to trim the public sector and to bring efficiencies in working practices. No putative government can gain power by boldly stating that they will immediately implement cutbacks. This is something that needs careful thought and long term action. Link a reduction in the public sector to tax cuts and improvements and no NuLab type will be able to ridicule the plan.
The public sector though needs not to be confused with some of the civil service that provides an essential service to the machinery of government. Some departments, such as the Home Office, famously criticised by Reid, have become ineffectual through governmental mis-management, the Police can be included in that as well.
A new administartion needs to enthuse its state sector employees into maximum effort with the promise of retention for performnace. Carrot and stick.
William Norton's report only confirms the prejudices that we have all held regarding the state sector.

[Chad]

"Face it, for the first term of a Conservative Government, big government is probably here to stay. "

No.

I personally refuse to "face it" that big government is here to stay and will fight for smaller government and lower taxes with a passion, and hope that many of others will too.

[Paul Kennedy]

Downloaded and will now start the big read, from what I can tell from the above comments it looks like it will be a good one and a credit to William, just hope my blood pressure can take it.

[Wallenstein]

"Face it, for the first term of a Conservative Government, big goveernment is probably here to stay".

Not much point in voting for Cameron then.

The time will come when pudgy-faced Dave will get an even bigger comeuppance than the Labour scum have had this week.

I'm looking forward to it. Any volunteers to throw that custard pie?

[Richard]

Well done for putting in the time and effort to produce this report. The more we hammer home the message of government waste and provide evidence for its existence the more we can sell the case for tax cuts.

Nevertheless I fear it will be a long time before we are in the situation AJP Taylor once summarised:

"The only agents of the state that a Victorian Briton was likely to meet were a postman and a policeman."

[Anarchocap]

Here am I Wallenstein. Ready with my right arm. Blair II with the pudgy fresh face has joined the Gramsci world revolution, intent on re-education of the masses, and more cake for the left liberal elite political class. At least N.Chamberlain was up front, and an honest appeaser.

[David Sergeant]

"I personally refuse to "face it" that big government is here to stay and will fight for smaller government and lower taxes with a passion, and hope that many of others will too."

I get very bored with this sort thing which gets blogged all the time. These people never say which public service should be cut or how an incoming government can cut waste instantly. If Cameron took any notice of this simplistic thinking Brown would be guaranteed the next election.

One blogger called this government scum and then said Cameron should get the same. No wonder Labour won the last three elections if this is the attitude they had compete with.

[Chad]

"These people never say which public service should be cut or how an incoming government can cut waste instantly."

Um, David, where are the detailed tax plans from Cameron then? Did I miss them?

But as you are bored of lack of detail...

I'm in favour of a flat tax approach that uses a rate that is initially tax-neutral but will make huge savings in administration that will help bring the rate down.

I'm also in favour of reducing the amounts of types of taxation to simplify the system, reduce cost and thus produce savings.

I'm also in favour of scrapping the road tax and putting the cost all in fuel.

Of course this is the kind of detail that you are not getting from Cameron/Osborne, but hey, just come back with the "it's too early for detail yet" argument that contradicts your first point.

Is that enough detail for you, and when will you be demanding the same from Osborne?

[Peregrine]

I had written a long diatribe about this report but instead will spare you will a few thoughts.

1) Ensure that there are fewer policy civil servants than are required at any one time. This way you will make sure that they are focused on priority areas and don't bring in new legislation every year because they have nothing else to do.

2) Ensure that policy makers have spent at least 3-5 years in delivery areas. Too many do a nominal term in delivery areas only looking to escape back to Whitehall. [The same applies to politicians and I look favourably on the A-list people who have gone out and made a difference.]

3) Create a real audit culture. The NAO do a good job but good organisations understand the real benefits from external and internal audit (as opposed to nitpicking inspection).

4)The real killer is making sure that civil servants understand that it is taxpayers' money they are spending. To this end I fully support the idea of a "Value for Taxpayers" champion within departments, however, I am not convinced that s/he should come from inside a department, I would prefer an independent on a rotating basis.

As an aside I did giggle at a few of the areas where an easing up of legislation was mentioned. Nearly all them require improved legislation to make both businesses' and Government's responsibilities clearer. Of course the EU makes this very difficult but not impossible.

[alex]

great work as usual william

[David Simpson]

A) we can't say we're going to reduce public expenditure - see endless comments above and elsewhere as to why
B) we all want a more responsive and efficient public sector however much or little is spent on it
so . . . we promise not to cut a penny off tax (we could still simplify things a lot in the way tax is collected) but we remit virtually all of it (health, education, social services, transport, police etc) other than the absolutely essential central functions - defence for example - back to the lowest levels of local government, who then decide how to spend the money on their local electors' behalf. They may give it all back to individual taxpayers and let them buy their own services, or negotiate to purchase services from existing providers - eg health authorities, private schools, LEAs, Police authorities, security companies. Thus, with one jump we are free . . . but how do we make the local authorities accountable? (My Parish Council hasn't been elected for 15 years)