About Me

"Setting the world to rights"...one blog at a time! Plus anything else that comes to mind

Saturday, 26 June 2010

15 Public sector staffing cuts

I've been reading the papers and watching the television reports and I can't understand why there should be any question about whether cuts should take place in the public sector administration.

Take one public sector worker, Joe Bloggs, who comes into work, does his bit on the computer - almost certainly; prints work for filing and / or reports - probably; goes home again.

Yes, he pays taxes but the money he's taxed on comes from taxes in the first place. Joe Public gives him money and Joe Bloggs effectively gives back a refund.

Perhaps all wages paid from the public purse should be paid tax-free. I don't mean for current incumbents to stop paying tax on what they are receiving now, I mean their wages should be reduced by the amount of tax they pay, then paid without tax in future. In this way we can see exactly what we are paying for communal services, we have reduced an unnecessary administrative step and our source of revenue figures are less distorted. After all, public sector wages are not so much a contribution to the economy as they are necessary to administer communal interests.

Hmm, this would seem to be going against my earlier post suggesting we all pay taxes on all forms of income regardless of where it came from. Ok, perhaps...my earlier suggestion was based on the premise that we all need to contribute to certain communal interests...taxes is the way we do that because our society is too large for eveyone to 'do a bit' ...if the public sector workers are spending their time for us then that is their contribution and their pay is their remuneration because they can't be spending that time earning elsewhere. The tax exemption would only apply to the payment coming from taxes, they'd pay tax on everything else, the same as everyone else. What do you think?

So, ignoring the income tax he pays, since it came from our taxes in the first place, we can see that Joe Bloggs costs us money to keep him in his job. If that job is essential, all well and good. After all - it needs doing and his time is his contribution to the communal interests so it's only right we should pay him. But if his job is not essential? That is a whole different matter. We are in debt and we can't afford non-essentials. If Joe is made redundant we lose nothing in that his going would not adversely affect the revenue-generating ability of the country. However, we gain the difference between the wage we pay him and the lower amount we would pay him in benefits. It comes from the same source, our taxes! And it's not just his wage, there's his pension and 'running' costs. If enough people are trimmed we should be able to trim costs from premises, equipment, energy usage, stationery etc.

So we have another person out of work. Well, yes, and it's rough on Joe Bloggs in the short term because there's a shortage of jobs. But the more money back in the hands of the country should mean more investment in revenue-generating private business and, we would hope, more jobs in the private sector, generating more revenue and hopefully reducing individual tax rates as more people work and contribute and so on and so forth.

A pay freeze would be hard on Joe; rising costs and income staying the same is indeed an effective reduction in pay and benefits. It is hard enough to make ends meet at the moment let alone as time progresses. However, the majority of the rest of the country have been in this situation for some years - don't expect any sympathy from those who are paying the wages!

The public sector unions seem hell-bent on making a bad situation worse - even thinking about strikes etc is an insult to those of us funding the public sector out of our own reduced circumstances. I can quite see they have a duty to look after their members' interests but in this case they would be better looking to negotiate the best severance deals instead of planning costly disruption.

Bottom line...can we afford a bloated public sector?...remember, the money for public services and staffing comes from the public purse, ie you and me. There is a limit to how much we can afford.

Tuesday, 8 June 2010

By the way...

Hmm, I just read the BBC News webpage...

"Osborne to consult public about spending choices.

Chancellor George Osborne has pledged a "fundamental reassessment" of the way government works as he outlined plans to involve the public in making cuts.
He said he wanted the "best people in their fields" from inside and outside government involved and a "wider public engagement exercise" over the summer....
He pledged to involve people from inside and outside government in a consultation over the summer including think tanks, pressure groups and people working in front line services. Civil servants as well as head teachers, police officers, nurses and others would be asked to contribute, he said. "What we want to do is make sure that all political parties, that the brightest and best brains across Whitehall and the public sector, that voluntary groups, think tanks, trade unions that members of the public are all engaged in the debate and discussion about how collectively we deal with the problem - after all it is our collective national debt," he said."

Good idea, let's hope it goes beyond talk and into action.

14 Budgets - follow up

Well, I’ve thought some more about budgets and while I still have a gut feeling budgets are a bad idea I can’t come with anything I think might work better. Perhaps a mix of systems would work? Part budget, part asking for approval and financing before going ahead with a project?

In the case of road works, things like maintenance and repairs would be on-going and it wouldn’t make sense to have to apply for funding each time a pot-hole needed sorting. In these cases budgets would be appropriate. An amount is allocated, if not all is used in a particular period the remainder is handed back. If there’s not enough then the shortfall is made up automatically from taxes.

New projects however should be properly assessed as to whether they are really needed, then costed and the findings submitted for approval before money is allocated and the project started.

If one person or one group is responsible and knows their decisions and requests for money will be accepted then presumably they wouldn’t have to worry about spending their entire budgets in case the budgets are reduced in future. One person or group is responsible for a given area; that person or group is responsible to the government and if spending exceeds what is deemed to be reasonable then they become accountable and have to justify their actions.

I can almost hear someone out there saying ‘this is basically what happens anyway’, but does it really? We can all see the state of the roads, we can all think of a project that was carried out needlessly while other, vital, work is left undone because they come from different budgets. We hear about officials in all areas who are given golden handshakes after failing in their work. People these days tend not to hold themselves responsible and are certainly not held accountable.

Perhaps the problem is not so much the system as the people in the system.