The Coalition Government’s public spending cutbacks have provoked much outrage. A lot of that has been directed at the economic case for the cutbacks with observers arguing that reductions on this scale are unjustified and run counter to the imperative to stimulate an economy through deficit finance at a time of recession; on the contrary, these commentators insist, reducing public spending is likely to provoke a further “double-dip” recession.
State spending in Britain has increased dramatically over the past decade and it is salutary to remind oneself that the present level of spending cutbacks will actually only reduce public spending to what it was in 2005/06. Governments of all parties since the 1980s have presided over a precipitous decline in manufacturing industry, which has effectively de-industrialised whole areas of the UK rendering dependence on the public sector for jobs, services and economic wellbeing all the more critical. Indeed, in most large UK cities such as Birmingham and Glasgow the public sector accounts for a third of the economically active workforce.
But that third of the workforce doesn’t explain the whole story. Large numbers of firms, jobs and contracts in the private sector are dependent on the public sector as are leisure and retail outlets. And, while there has been a huge growth in the voluntary or ‘independent’ charitable sector with many hitherto statutory services privatised or outsourced to it particularly in the field of social care, the reality is that through a combination of regulation and funding, the voluntary sector is heavily dependent financially on the state sector. Consequently, public spending cutbacks can have serious impacts on the entire economy if entered into too hastily and abruptly. Proponents of alternatives to public spending, such as the Governments much vaunted Big Society concept, have thus far been unable to satisfactorily explain where the money for this and further privatisation or outsourcing of statutory services to the community is to come from?
The reasons for the growth in the public sector over the past few decades are varied. Apart from the huge sums spent since 2007 bailing out the banks, the numbers of older people requiring care and attention have soared, while spending on welfare benefits has risen remorselessly exemplified by the sustained increase in the housing benefit bill. But a crucial factor has also been the substantial increase in the levels of regulation, compliance and accompanying legislation to enforce and monitor it which has pervaded every aspect of life in the UK.
In their book The Gods that Failed*, authors Larry Elliot and Dan Atkinson quote the centre-right think tank Reform that “only 45 per cent of the growth in public sector employment would consist of ‘front-line jobs’” implying that the remainder would consist of either managerial or compliance/regulatory posts or in areas to do with interventions in lifestyles, attitudes and behaviour which have proliferated in recent years. Issues hitherto considered to be of concern only to the individual have now become ‘public’ issues that are the concerns of all and require ‘interventions’ in the individual’s life. There has been a massive expansion in positions such as outreach workers, development officers, healthy living strategists etc, posts virtually unheard of except over the last thirty years.
The real issue in dealing with public spending cuts, apart from the severe economic impact they can have on local communities and the economy at large, is achieving a balance between getting rid of, frankly, unnecessary quangos and the plethora of regulatory/compliance bodies that pepper our public life and the multitude of superfluous posts that go with them, while retaining and sustaining important front-line services which are essential to deal with health, alleviating distress, poverty, deprivation and meeting real social needs.
The reality is that the haste and extent of the present cutbacks will inevitably be indiscriminate and hit front-line services as much as if not more than, the bureaucratic empires that have been created over the past decades. Worse, as the cuts percolate down to local authorities, entire areas of public funding and provision will cease or be severely reduced, in spite of commitments to protect front-line services, which will be impossible to maintain, given the extent of council budget reductions.
A real opportunity has been missed here by the Coalition. One of the reasons why Labour was rejected by the electorate last May was undoubtedly widespread discontent with the extent of bureaucracy, regulation and the intrusion of the state into everyday lives. The new government could have taken the initiative and won widespread support by conducting a proper and balanced evaluation-come-audit of what was really necessary to combat waste in the public sector rather than the hell-for-leather rush to cut which is likely to cause suffering and damage to really necessary public and social services. That would have taken time. Instead, to use the old adage, the Coalition has cutback in haste and will repent at the consequences of their actions at leisure.
*Larry Elliot and Dan Atkinson: Fantasy Island, Constable, 2007.