By Lucy Phillips
10 December 2009
The government will need to cut at least one million public sector jobs to pay off its debts, according to a centre-Right think-tank.
Reform’s Front line paper, published on December 7, said tackling the country’s financial deficit would require a 15% cut to the public sector wage bill and jobs on the front line would have to go – contrary to pledges by both Labour and the Conservatives.
The biggest cuts should be in services that have had the greatest increase in spending over recent years, such as the NHS, police and education, the report said. Ministers’ plans to streamline central government and slash public sector pay would not be sufficient to rebalance the UK budget.
Lucy Parsons, a senior economics researcher and one of the report’s authors, told Public Finance that ‘doing anything substantial to the deficit will have to mean cutting frontline services’. She said whoever came into government would need to ‘change track’, focusing on reforming rather than protecting state services.
‘If you slim down the organisations, they will have to make every pound go further. We would like central government to loosen its reins to allow managers to make decisions about getting more value for money,’ she added.
But Colin Talbot, professor of public policy at Manchester Business School, branded the proposals ‘bonkers’.
‘Adding another million people to the dole queue short-term is economically illiterate,’ he suggested.
Talbot said some reductions to the front line were inevitable, but cutting almost a sixth of public sector workers was ‘not deliverable’ and would cause ‘riots in the street’.
He urged the government to make more strategic savings across all public sector spending, not just to the wage bill which accounts for a third of the budget.
Unions condemned Reform’s plans, which the think-tank claimed would lead to eventual savings of £27bn a year, and said bankers should be forced to pay more towards the government’s deficit.
But Parsons said it was right for the public sector to take its share of the burden. ‘The recession might have been triggered by the banking crisis but the huge public deficit was not caused by that. It was caused by government spending more than its revenues over the past few years,’ she said. She added that many of the job cuts could be achieved through natural wastage.
The Reform paper also criticised ‘extremely weak’ financial management across the public sector.
‘The management of budgets and control over knowing where money is spent is missing at the moment,’ said Parsons, who called for greater transparency and accountability.
10 December 2009
The government will need to cut at least one million public sector jobs to pay off its debts, according to a centre-Right think-tank.
Reform’s Front line paper, published on December 7, said tackling the country’s financial deficit would require a 15% cut to the public sector wage bill and jobs on the front line would have to go – contrary to pledges by both Labour and the Conservatives.
The biggest cuts should be in services that have had the greatest increase in spending over recent years, such as the NHS, police and education, the report said. Ministers’ plans to streamline central government and slash public sector pay would not be sufficient to rebalance the UK budget.
Lucy Parsons, a senior economics researcher and one of the report’s authors, told Public Finance that ‘doing anything substantial to the deficit will have to mean cutting frontline services’. She said whoever came into government would need to ‘change track’, focusing on reforming rather than protecting state services.
‘If you slim down the organisations, they will have to make every pound go further. We would like central government to loosen its reins to allow managers to make decisions about getting more value for money,’ she added.
But Colin Talbot, professor of public policy at Manchester Business School, branded the proposals ‘bonkers’.
‘Adding another million people to the dole queue short-term is economically illiterate,’ he suggested.
Talbot said some reductions to the front line were inevitable, but cutting almost a sixth of public sector workers was ‘not deliverable’ and would cause ‘riots in the street’.
He urged the government to make more strategic savings across all public sector spending, not just to the wage bill which accounts for a third of the budget.
Unions condemned Reform’s plans, which the think-tank claimed would lead to eventual savings of £27bn a year, and said bankers should be forced to pay more towards the government’s deficit.
But Parsons said it was right for the public sector to take its share of the burden. ‘The recession might have been triggered by the banking crisis but the huge public deficit was not caused by that. It was caused by government spending more than its revenues over the past few years,’ she said. She added that many of the job cuts could be achieved through natural wastage.
The Reform paper also criticised ‘extremely weak’ financial management across the public sector.
‘The management of budgets and control over knowing where money is spent is missing at the moment,’ said Parsons, who called for greater transparency and accountability.
