First 100 days: services take a haircut

Marc Cetkowski PIPC

Public Finance, August 2010

This is still supposed to be the honeymoon period for the coalition, but its first 100 days of government have been overshadowed by a disorganised cutting of public services.

Where is the love they promised? David Cameron and George Osborne appear to have turned into hairdressers, but more Sweeney Todd than Nicky Clarke. They are rapidly transforming Britain’s reasonably sensible haircut into something resembling a mullet.

In fact, as we come to terms with the severity of public spending cuts – and we won’t know the full story until the spending review is published in October – it is clear that the coalition is aiming for a style that is a little closer to the skin, an all-over number one perhaps. The trouble is, it doesn’t seem to know how to handle the scissors properly – or should that be shears. It is cutting wildly, with little or no thought for how things are going to look in the long term.

No one is under any illusion that public sector cuts are needed but it is the lack of forward planning that is more than a little worrying. A ‘Spending Challenge’ web site set-up to get suggestions from public sector employees on cutting waste received 65,000 responses. An impressive return, but what’s the point? Was it a PR stunt or just indicative of a lack of ideas and lack of longer term planning?

One thing is certain. The cuts are causing turmoil among senior civil servants who are shocked that there has been little or no investment in planning and understanding the longer term consequences of such unexpectedly deep financial cuts. In the Budget, Osborne announced cuts across all government departments of 25% over four years. It is now emerging that some departments have been asked to cut up to 40%.

And now the Audit Commission has gone. The body set-up to keep an eye on public expenditure and identify cost efficiencies has been axed, leaving a gaping hole in public finance accountability. It joins a growing list of public bodies and services that are being consigned to the cutting floor. Inevitably there are consequences. For example, partnerships between PCTs and Children’s Trusts are under pressure, threatening essential frontline services. It all hardly fits with Cameron’s vision of ‘Big Society’.

It’s a dire picture, and not the one David Cameron would have wanted to paint as he stood in front of Number 10 on May 11th. Rumours that the proposed hike in VAT is to be reviewed for fear of driving the country deeper into recession joins the u-turn on axing school milk as evidence that there is no plan; that this is a headlong rush into saving money first and picking up the pieces later.

What we need is whole system commissioning. A plan, based-on requirement, rather than a broad brush approach based on balance sheets. It’s about using limited resources to the greatest effect – and managing those resources through a structure that enables greater accountability.

Ultimately it demands a shift in traditional public sector thinking. But it’s a change worth having, as it will form a solid basis on which all future strategic decisions can be made. It will be cost-effective too – skilled cutting by skilled barbers, leading to trend-setting styles that will be the envy, not the laughing stock of Europe.