The Tories – heading for Depression

Posted on

A Tory think tank called Reform has laid bare the reality of Tory thinking on public service cuts. As the BBC reports:

At least one million public sector jobs should be cut to ease the public debt, according to the Reform think tank.

The centre-right group says the NHS and the police service should be among the areas hit hardest, having previously enjoyed big workforce increases.

The Reform web site spells out the detail:

Research for this paper indicates that the public sector workforce needs to reduce by at least one million people (15 per cent of the total) if the structural deficit is to be eliminated, over a period of years. Jobs will fall by the greatest amount in the services that have seen greatest increase, such as the NHS. The rates of natural wastage are so high that relatively few redundancies will be needed, although some will be.

Contrary to popular perception, the great majority of the public sector workforce are front line workers. Of the 1.4 million people working in the NHS, for example, only just over 200,000 provide administrative support. Since 1999, the central civil service has grown by 5 per cent compared to a 30 per cent rise in the NHS headcount.

So we’re talking about 210,000 people being made redundant in the NHS. How can that be done?

Well, abolishing the internal market and all the wasted accounting and duplication that goes with it would, according to some estimates, cut 60,000 jobs and I’d be willing to believe that. Except it is clear that Reform won’t no cuts here at all. They say:

The NHS needs to be fundamentally depoliticised by giving people freedom to choose where their share of the NHS budget is spent, in practice by giving them choice of Primary Care Trusts.

Apart from the fact that I know (my wife is a GP) there is no demand for choice in the NHS — people want one good local supplier, and when offered ‘choose and book’ are bemused by the idea — their local hospital is where they want to go — or the one which the doctor thinks best — I also know four further things:

  1. This is about privatising the NHS and private medicine costs much more than NHS medicine if full costs are taken into account
  2. This is about politicising the NHS
  3. This is about denying access to the poorest in our communities
  4. Duplicating services — as this demands, massively increases cost in admin time

So we have to assume no cut in admin staff in the NHS which mean all come out of the frontline.

So what shall we close down? GP services? Care for the elderly? Cancer care? Maternity services? The South West?

This is how ludicrous this proposal is.

But what is more ludicrous is the economics. 1 million unemployed means, when there is a lack of demand in the economy, which will spiral out of control with all these extra out of work, that all these people will remain unemployed — at cost to the benefit system. And as I have shown here,

Now let’s reflect on the fact that in reality the average direct cost of employing an average public sector employee is around £21,000 — more like median pay — and then note that 500,000 at this pay rate will supposedly save £10.5 billion in the wage cost of the government. Putting these half a million people out of work will save us about £0.8 billion. That’s misery for 500,000 people and their dependents to save just £1,600 per job lost.

Please read the whole thing.

Reform are suggesting a policy close to economic suicide for the UK, but the Telegraph editorial says of it:

A new report by the Reform think tank sets out a painful truth that politicians of every stripe seem unwilling to grasp. With Government borrowing set to top £175 billion both this year and next, the report warns that the public sector cannot continue at its present bloated size.

The almost unimaginable scale of the debt crisis demands a once-in-a-generation reassessment of the role of the state, which requires painful job cuts.

After the election, this nettle will have to be grasped. It will require immense political will and unrelenting energy, for the battle will be long and bloody. But there is no alternative. Any backsliding, any hint of weakness, will see our credit rating cut and the financial markets will punish us mercilessly.

So we sacrifice the old, the sick, the poor, to the financial markets? We create not just 1 million unemployed — but millions (yes, I mean millions) more in the private sector who are dependent on the state for their income — because note what a small part of state spending pay actually is — to achieve the same goal?

This is the voice of economic insanity. It is why we cannot have a Conservative government in this country. Precisely because they might just try to do it.