Public sector

Britain’s state school system is a national disgrace. Not because we don’t have excellent schools: we do. But only for those who can afford to move to the good catchment areas. The comprehensive system gives the best service to the rich, and the worst to the poor. It is a system which harbours bad teachers – only 18 have been struck off for incompetence in 40 years. Compare this to the USA where 252 bad teachers were sacked in one day last week. Our world-class private schools show that England can be a world leader in education. But we have one of the biggest gaps in the world between attainment in private and public sector.

It looks like the wheel-clampers are in retreat after Haroon Zafaryab's heroics the other day and Lynne Featherstone's subsequent "ban on clamping and towing on private land". And as they leave the field, it's worth returning to a piece that Ross Clark wrote for The Spectator last year in which he tied the cowboy clampers in with a wider malaise: the last government's "blind spot" for business, such that "it simply cannot distinguish between where business ends and racketeering begins". Here's the full article for the benefit of CoffeeHousers: We have become a nation of shysters, Ross Clark, The Spectator, 17 October 2009 Power cuts and uncollected rubbish form most people’s memories of the economic debacle that was the 1970s.

You can often achieve a lot more by doing things a bit at a time rather than attempting one bold and sweeping reform. In the 1970s, for example, the trade unions had extraordinary legal privileges; strike votes were done on a show of hands at works meetings (usually late at night when everyone except the Trotskyists had gone to bed); there weren’t even secret ballots for union elections. Edward Heath took the unions head on with his all-embracing Industrial Relations Act. It was a disaster: there were widespread demonstrations and strikes, and one of these confrontations forced him from office. Margaret Thatcher learnt from this and took things much more slowly.

There's a lot of economic speculation swirling around the Westminster washbowl at the momment, but little of it is as eyecatching as today's report from the Chartered Institute of Personnel and Development. Its finding that a third of employers are expecting to cut jobs in the next quarter is bound to spark double-dip fears, even if that expectation is more keenly felt in the public sector than in the private. 36 percent of public sector employers foresee job losses, against 30 percent in the private sector. Perhaps more worryingly, both sectors are expecting more redundancies than they did in last quarter's report. Look below the headline figures, though, and there are signs that the private sector is driving on ahead regardless.

And so it continues. The FT reports that Sir Alan Budd has denied that George Osborne cooked the OBR’s job loss forecasts. ‘It was genuinely a forecasting correction with no ministerial interference,’ he said, blandly. The correction was the result of the OBR’s use of a narrow definition of public sector workforce than is employed by other statisticians. That is not abnormal: statisticians are a law unto themselves. But, as the saying goes, it doesn’t look good. The OBR’s figures supported the government and the story is beginning to emit of a whiff of mendacity. Once more, George Osborne is in a mess of his own making. His political instincts veer from brilliance to catastrophe with an unpredictable regularity.

Forget the hubbub about Gove's schools list, the most damaging story for the government this week could well be on the cover of today's FT.  Alex Barker does a great job of summarising it here. But the central point is that the Office for Budget Responsibility changed its forecasting methods just before the Budget, with the effect of reducing how many public sector jobs would be lost due to the government's measures. This isn't damning on its own: statisticians constantly tweak their forecasting methods. But when you consider that the OBR's new methods incorporated policies which haven't even been announced yet (including one which pre-empts the findings of John Hutton's pensions commission), then it starts to look more dubious.

Francis Maude and Mark Serwotka (the Public Commercial Service Union’s General Secretary) are in the opening steps of a soon to be furious jive. Maude hopes to slash ‘untenable’ civil service redundancy packages and will legislate to introduce caps at one year's pay for compulsory redundancies and 15 months salary for voluntary redundancies. Maude’s logic is unanswerable: the public sector must contribute to redressing the deficit. The public sector doesn’t agree and has the common law behind it. On 22nd June, the High Court found in favour of the PCS on this very issue: the government can only change the redundancy scheme with the agreement of the union, which is unforthcoming at present.

In the midst of this ongoing row about employment numbers, it is worth noting that the OBR figures released today show that there’ll be 610 thousand fewer public sector jobs at the end of parliament than there are now. But the overall number of jobs in the economy will increase by 1.34 million. This means there’ll be 1.95 million more private sector workers at the time of the next election. As I wrote in the magazine last week, one of the aims of the Budget was to shift employment from the public sector to the private sector. The OBR’s numbers show that the Budget should do this. There are, at least, two reasons why Osborne wants to do this.

Vince Cable is announcing to Metro that "We do not want to make such deep cuts to transport, energy, science research and universities." Really? According to whom? The science budget, which has shot from £1.3bn to an indefensible £3.7bn, is a prime example of a cost that should not be borne by the taxpayer. Scientists are best left to get on with this themselves, and companies are more than capable of funding research. On energy, again, there are many expensive vanity projects just begging for the axe. Given that Cable is in charge of the universities brief - the most important part of his otherwise non-job - you can expect him to want to protect it from cuts. But to lobby openly like this is not something that Theresa May or Liam Fox would do.

Two weeks ago, when launching the Spending Review, George Osborne called for a once-in-a-lifetime debate about the shape of government in the UK.  He implied that there is a right and a wrong way to cut the deficit.  It would be right to cut spending by addressing the structural causes of the deficit - i.e. public sector inefficiency and the UK's unwillingness to cut its pensions and health entitlements.  It would be wrong to leave the shape of public services and welfare unchanged, but limit their costs temporarily – “salami slice” – with public sector pay freezes for instance.

Today's papers are awash with stories that a public sector pensions levy will be announced in tomorrow Emergency Budget. Trade unions have already issued dire warnings, ranging from the PCS's promise to "organise the widest possible popular opposition," to Bob Crow of the RMT’s rather prosaic: "when someone’s winding up to give you a kicking you have a clear choice — you can either take them on right from the off or you can roll over and hope that they go away."  Public sector workers, however, should not be so dismissive.   In our report, released on Friday, we argue for an "Irish style" graduated public pensions levy of 7.5 percent.  We estimate this will ‘save’ 322,000 jobs.  Why?

Transparency is this government’s quintessence. It is a mantra to two gods. First, it is a constituent of the ‘new politics’ – that jewel over which the three partisan thieves squabble. Second, it enables the government to amputate gangrenous public sector pay.   The public sector is powerful. The previous government’s economic policy bred a bowler-hatted Leviathan. You can argue the toss whether civil servants are overpaid per se, or that their pension entitlements are grotesque in an era of budget restraint. But the government’s battle will be more brutal because the public sector is the final redoubt for the antediluvian fat-cat unionism of Simpson, Woodley and Crow, to name but three.