Into the ongoing debate over whether Labour’s actions in Government contributed to the huge national debt and record deficit weighs Sir Nicholas Macpherson, Permanent Secretary to the Treasury.
As Sky News reports, Sir Nicholas identifies three departments – Defence, Health and Education, which struggled to keep control of their finances.
[Sir Nicholas Macpherson] said spending at the Ministry of Defence under the last government was “lost control”, adding it had been put into “special measures” and ordered to report on a month-by-month basis on spending.
Sir Nicholas admitted the Department of Health and Department of Education had problems with their finances during the last decade.
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15 Comments
And in other news, the MOD is struggling to keep to this year’s budget too.
http://uk.reuters.com/article/idUKTRE70J16120110120
This isn’t news. In the round, McPherson is saying what we all know. Government departments spend lots and lots of money. Period.
Just about everyone in the country thinks government is hugely inefficient; stories like this only serve to confirm that view.
We should be asking (a) how big are the potential savings from efficiency alone without reductions in service, and (b) how do we achieve these cuts to make government more efficient?
If we do not explicitly ask these questions we leave it to the Conservative to make the running even though they are quite happy to conflate the two to provide an excuse for the service level cuts they want.
My sense of it is that efficiency alone could provide all the savings needed but that Whitehall is so set in its ways that these are unlikely to materialise any time soon.
I already new that Labour lost control. It is why a lot of people think more goverment and council work should be put out to private tender. If a private company messes up they lose the contract next time it is up for review. If a beuracrat messes up he tells you how wonderful you are, how well your doing, it is nobodies fault and can he have some more money or what should he cut back on. They very rarely seem to get the sack so don’t really have to worry about it. Plus the top one geyts an extremely good and safe wage.
@ Richard,
If only it was like that. But what happens if the mess up the bureaucrat makes is in selecting the wrong private firm to contract the work out to? That is what’s happened big time and repeatedly in for instance procuring IT systems.
Then again, why do so many people think the private sector is so wonderful. I spend most of my career in the private sector and found some of it very good (like some government) and some of it unbelievably bad (like some government).
The private sector cannot possibly deliver a good service cheaply because they have to make profits. So invariably you end up with either a reduced service or bad employment conditions or the tax payer ends up subsidising the service.
And in other news, the MOD is struggling to keep to this year’s budget too.
Thats great, perhaps it will put our country off following America around the world causing countless innocent deaths to enable the US to steal countries raw resources.
PS
We need to remember the truth. The problem wasn’t the overspending it was the cause of the overspending. We overspent to keep us out of a recession. The rescission was caused by greedy bankers and the previous governments reduction in control on them. I am not a fan of Labour (although they are more preferable than the conners) but at the same time we need to keep the debate real and not go off and start believing what those in power want us to believe (unless of course it is the truth[which is becoming increasing unlikely with the con artists we have in power at the moment’])
Don’t worry the bureaucratic efficiency is still continuing under the Coalition – otherwise why else has it not been possible to adjust the PAYE codes for 24,000 people earning over £150k so that they pay the 50% tax rate within a year of that rate being announced. As a result those concerned will not have to pay the extra tax until January 2012 rather than during the current tax year. Unfortunately this inefficiency did not extend to poorer people being able to postpone their increased taxes for 10 months.
The minister responsible is David Gauke.
Perhaps those who are in favour of the private sector might like to provide some examples of where firms in the private sector contract out their financial control of expenditure to other private sector firms. You just don’t ask another firm to approve and manage expenditure which you incur. You may contract out entire services and then require the contractor to manage the expenditure that they incur – but even that may be a little difficult with defence.
dave thawley, the Labour government started overspending in 2001 (in Brown’s “boom” years). Not very Keynesian!
@Chris
Very slightly yes – have a look at this from the office for national statistics – it shows exactly what happened when it happeened and it all turned very very bad when the banker crash happened
http://www.statistics.gov.uk/cci/nugget.asp?id=206
@toryboysnevergrowup
“Don’t worry the bureaucratic efficiency is still continuing under the Coalition – otherwise why else has it not been possible to adjust the PAYE codes for 24,000 people earning over £150k so that they pay the 50% tax rate within a year of that rate being announced. ”
Perhaps because of the cuts imposed by Labour when they merged the Inland Revenue and Customs and Excise. Mindless cuts that cost more in lost revenue than they saved in reduced salaries. Typical New Labour.
Which was obviously a dumb idea because it didn’t work.
David Evans
Don’t be silly – the merger was 5 years ago and there have been plenty of other changes to the PAYE system since then. The failure to upgrade the system for the 50% within the first year of its implementation happened on the Coalition’s loss.
Andrew Suffield
Perhaps you should imagine what the recession would have been like if there hadn’t been a deficit of 13% of GNP to plug the gap – if there are still any practicising Keynesians in the LibDems they should be able to explain.
@andrew Suffield and Chris Jenkinson
Actually, we overspent (arguably) in 2001 -3 to keep us out of a recession then – the one involving the collapse of Enron, WorldCom, Arthur Andersen and the dot.com bubble.
And that time, it did work. Unfortunately, the story of how canny Chancellor Gordon Brown kept the British economy on an even keel when many others around the world failed is, although true, currently rather unpopular.