Tomorrow the past few months of media speculation frenzy over cuts, cuts, cuts, gives way to speculation as to what it all means. That should give editors an easy ride until they can get into the "How could they do this just before Christmas?" mode. After that they go off into the New Year and can have fun start digging for coalition splits again.
So far, most have missed the big question, partly because the government spinners appear not to have understood it either.This should not all be about less money=less people = less goods and services. It should be about doing more with less and how to do that, an exercise which many private industries and businesses have have been going through frequently for years, while the state sector has sailed on obliviously adding more people and costs whenever it takes on every new task and abandoning none. There was an internal belief that everyone was working flat out and there was no capacity of man or machines to cram more into the day. Random observation would say this is not always or even often so For example waiting lists for hospital scans ran for months while equipment ran 9-5 five days a week leaving huge amounts of unused capacity which could have been shared or contracted out to the private sector. Such flexibility ranged from unusual to unthinkable.
The "cuts" are not simply about taking money and activity out of the public sector. They are about restructuring the British state economy and the way benefits and subsidies are seen. Yes, commuter train fares will go up, but for example why should the economics of ability to work in London but live in the countryside be
distorted by commuters not paying the real price of providing morning and evening trains with low daylong utilisation? They also distort the price of property by taking the pressure off the London market and transfering it out of town. Why should well off people be paid to have children? Why should anyone be paid to have more than say a maximum of four children? Why should well off pensioners have their bus fares paid for? On and on goes the list. Since the arrival of the (largely uncosted) Welfare State in 1948 we have all been seduced and hooked on subsidy. The cost to the Exchequer and ultimately ourselves has been enormous. The money, including the huge North Sea oil windfall could have been spent on the really needy, providing the things to really raise their skills, living standards and lift them out of long term and repetitive poverty, or on massive investment in future infrastructure. The Victorians saw the need and desirability of that , as did some wartime planners looking at postwar needs. What happened? Where did all the money go? Why have we very little, nothing even, to show for it? The reality is that successive governments used it to indulge ourselves and effectively poured most of it down the drain.Kuwait has an oil-based modern infrastructure and a "Future Generations Fund". UK Plc does not.
There are three main areas of public spending:
-The annual ongoing cost of running the government departments, busonesses and state provided services.
-The cost of capital projects which can validly be classified as investments for the future with appropriate benefits and returns.
-The cost of interest on the (rapidly increasing) national debt.
The first and last are of immediate concern. The second requires urgent evaluation of the value of the projects and whether their contracts are tightly specified and have achieved the right quality at the right price. The state sector has a poor reputation as a negotiator,-eg the Nimrod Mk 4 contracts, the new deal for GPs and many others. Are contractors uncynically delivering good value or are we collectively being taken for a ride, particularly by large and near-monopoly suppliers?
Ideally Wednesday's presentation in the Commons by the Prime Minister would first take us through simple good old fashioned graphs and pie charts showing us who spends what on what share of the cake and then where the money goes. Lower level presentations would then do the same, department by department, giving a clear view of what is being done for us, why and at what cost and how it compares to previous years. This should be the same in every year's annual budget. Unfortunately the Commons chamber does not allow for audio-visual presentations and explanations and the format of government statements has changed little over the centuries. There will be a long verbal statement followed by the Opposition's instant assembly of its prefabricated sound bites " Too much" "Too little", "Too fast" ,"Too soon", "Diabolical" "Attack on....""the bankers (not us) caused this" into some semblence of order. After that there will be the big story book with all the detail and anything the government hopes we won't notice until it's so late that they can say that by our silence we accepted it. The book, its lines and between them, all require close reading with a powerful magnifying glass.
Will it all be a recipe for a new, forward looking Britain with good value government spending with it all under control and imparting new sense of challenge and purpose all round ? Or will it be seen, especially by the usually pessimistic media as another shock, horror harbinger of doom and, yes, economic castration of the British people? The genuinely sad story is that the discomfort, difficulty and upheaval all this is now going to cause real people is the accumulation of mismanagement of the economy and government business by its elected representatives for at least the last ten years, and in terms of manpower intensive, expensive and often very slow and inefficient processes a lot longer than that. Complacency,negligence, inadequacy and incompetance are all in the mix.
