John Redwood

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READING EVENING POST

9 October 2007

         This week the government has told us how much more expensive the public sector will be next year than this. As always, the Chancellor’s chest swells with pride as he recites very large numbers, all considerably larger than the year before, for spending on the main government departments. He assumes that all the extra money will buy better services, and implies that all the money being spent is being well spent.

       He and his colleagues have bought the “loadsofmoney” fallacy about government. In their world a Health Service that costs £100 billion a year is twice as good as one that costs £50 billion a year. Taking it up to £104 billion a year means it will be markedly better than at just £100 billion. Unfortunately it means so often they are taken for a ride with poorly managed computer schemes, dear consultancy contracts, disruptive and expensive reorganisation schemes, and all too many increases in box ticking, form filling and bureaucratic intervention.

       What we, the consumers of public services want, is a timely high quality service available when and where we want it. We want our dustbins to be emptied at least weekly, with the lids placed back on and no rubbish left on the sidewalk. We want to know that any relative or neighbour who needs hospital treatment can get it in a clean and friendly local hospital with high quality treatment with little danger of catching a hospital infection. We want to be assured that local children have access to good quality schools which bring the best out of them.

       We cannot be sure whether it takes £96 billion, £100 billion or £104 billion to deliver a high quality health service for all. We would be more impressed if the government could do it for £96 billion rather than £104 billion, because then we need not pay so much in tax. It is not good to know it is  getting so much dearer each year. It  would be reassuring to know how much better it is getting so we can see what we buy for all the extra cash.

      This government compounds the loadsofmmoney error in the way they talk about the problems. They tell us they are “investing” £100 billion in the Health Service, when they mean they are spending £100 billion of our money on it. Investment is buying something that lasts for longer than a year – the money they spend on new buildings and equipment is investment. Most of the money is revenue  spending, because it goes on salaries, paperwork, management and supplies. All too often if I or a colleague raise problems with a public service in the House – real problems to the constituents who have experienced them – we are told there cannot be a problem because they have increased “investment” so much. If only!

       It’s high time we had a more honest debate on the good and the bad in our public services. We need government to pay much more attention to how they spend the money, rather than just boasting about the amount they spend. Spending more may be a good thing – but only if it is spent on genuine improvements. When I go into one of my favourite shops I do not go because that shop is spending 5% more than last year. I go because they have the good or service I want a price I can afford. If it is cheaper than last year that is a bonus. I don’t turn up my nose and say that cannot be any good because its cost has not gone up  by 6% more than last year. Indeed I am not concerned at all about how much the shop spends on administration, stock and staff. I just want a high quality product. Many people feel the same about a public service.

         If only we could Ministers to see this, we might start to get better value for all the money taxpayers provide.  They hurled too much money too quickly without insisting on proper reform. As a result we have bloated budgets, but we still do not have all the operating theatres, doctors, teachers and police we need. We are too stretched employing such an army of civil servants, quangoland employees, regulators and spin doctors.