The Green Guide to Staying out of the Red

It seems certain that this week’s political news agenda will be dominated by rows over the highly controversial future of higher education funding, and in the week before the spending review it could well serve to be a mere preview of what’s to come. It would be tempting, therefore, to assume that there will be nothing but bad news for the government in the coming weeks.

But today saw the release of a report that will bring much more pleasant music to the ears of ministers than tomorrow’s publication by Lord Browne – and therefore unsurprisingly will grab far fewer headlines. But it could also bring some small comfort to thousands of public-sector workers facing a pay freeze and higher pension contributions – not to mention the dreaded CSR.

Sir Philip Green, the British billionaire retail tycoon best known as the boss of clothing stores like Topshop, claims to have uncovered staggering amounts of wasted government expenditure that he says would run even his own successful businesses to the brink of ruin.

Cynics, of course, might say this is rich coming from a man who is notorious for his own ‘staggering’ unpaid tax bill.

His core finding is that the decentralised and fragmented approach to various forms of government procurement – including, dare I say it, expenses – sends unnecessary costs spiralling, with no coherent reporting and no accountability. By changing the civil service’s approach – and attitude – to day-to-day expenditure, Sir Philip says, billions could be saved before resorting to redundancies.

Needless to say, the government has leapt on the report as evidence that it is possible to maintain its assault on the deficit whilst protecting that old chestnut, “frontline services”. Others have gone further, using the report as a stimulus for attacking the civil service, its lack of accountability and the performance-unrelated pay of senior staff.

But we’ve heard all this before, right?

Only to the extent that we’ve heard governments talk about improving their budget prudence – that is to say, never quite this explicitly, consistently or aggressively as what we are currently witnessing.

Sir Philip’s report finds broad trends, carries thoughtful messages and makes high-level criticisms and recommendations, but it is also grounded in tangible, accessible examples of waste – rather in the same way that the Daily Telegraph turned widely-acknowledged sleaze and shadiness in Westminster into stories of second homes, duck houses and moats.

And he’s not lying. Your correspondent’s personal and anecdotal experience is that those in the public sector for whom travel and accommodation expenses represent a substantial (and opaque) substitute for higher salaries are appallingly blasé in their attitude to these perks. But the real problem is systemic – there is no meaningful oversight of this massive, routine expenditure; no analysis of need or justification, and certainly no long-term vision of what can be done, what radical reforming steps can and should be taken, to stem the flow.

It was following the Lyons review of 2004 that the government embarked on a programme of civil-service decentralisation, shifting thousands of public-sector jobs away from London and the South East. This dispersal from the congested traditional home of government is often seen as being mainly about sharing the benefits of public-sector employment around the country as well as easing the burden on London’s infrastructure and housing market.

However, finance was an equally prime motivation – because the costs of living and working elsewhere in the country are lower, civil servants here could enjoy the same ‘utility’ as their London counterparts at less cost to the state.

But the haphazard way in which scores of government departments and agencies have been scattered across the country has resulted in related organisations being so isolated from each other (and, initially at least, bereft of the necessary communication networks), as to have created a whole new burden – and culture – of inefficiency that was apparently unforeseen.

Back then, decentralisation was the fashion. Now the king of the high street is telling us that times have changed.

The government has its sights set on a 5-year horizon in its mission to slash the deficit and reduce Britain’s burden of debt. But – much like finding the right solution to funding the education of tomorrow’s civil servants – it is this sort of long-term thinking about how much public money they spend that is necessary for a sustainable future.

If only Mr Green would make his own contribution.

Not-so-Red Ed?

In last week’s blog on the TINA phenomenon, I talked about the inability of the Labour Party to make up its mind about who its next leader should be, and what that said about the party’s response to its electoral defeat. I also argued that this limbo in which the Opposition finds itself presented an opportunity for the coalition to get ahead of the game in convincing the public of the case for cuts.

A week on, a new Labour leader (pardon the pun) elected, yet nothing has changed on either of these fronts. The dramatic outcome of the tedious leadership contest can’t exactly be described as a lurch to the left, but it does appear to demonstrate an unnerving error of judgement by those in and around the party about the reasons behind the events of the spring.

This is particularly so, given that the decisive blow to the elder Miliband’s ambitions was landed by the only bloc within the tripartite electoral college with the potential to swing the next election back in Labour’s favour (I wouldn’t imagine that MPs and party members account for many of the 5 million votes lost since 1997 that the new leader has so often lamented).

The minutiae of the voting results have been gone over a thousand times now, or so it seems, but the potential impact of them has not diminished. More of the 258 Labour MPs voted for David than voted for Ed; likewise a higher proportion of the party’s (participating) membership did, too.

Labour’s new leader, widely seen as the more left-leaning of the Miliband brothers and hence of the front-runners in the contest, triumphed by securing a staggering advantage among members of trade unions and other ‘affiliated’ organisations – together comprising Labour’s traditional socialist core.

This core, it seems, sought to gain greater control of the party by voting to consign to history the New Labour revolution that had gnawed away at the party’s age-old roots. If true, this would be an ideological misjudgement threatening to spoil what could have been – and could yet be – a 2015 election that is Labour’s to lose.

And there was much in the new leader’s first keynote speech to the party conference this week to suggest that those wishing to see Labour return to its ‘old’ values might get something of what they bargained for when they cast their ballot. A belief in a greater role for the state in stimulating long-term economic growth following the suffocating recession, coupled with faith in the power of communities to generate optimism and ambition; prioritising these tangible aims over a more ruthless approach to deficit and national debt reduction; declaring an end to the days of international unilateralism, including a (somewhat dubious) expression of regret over Iraq; and an emphatic endorsement of that most modern of socialist causes – the protection of civil liberties.

But is it wise to attempt to deconstruct the foundations of thirteen successive years of government – the party’s most electorally successful era by a long stretch – as if it’s some kind of secret past, an historical shame? Tony Blair made Labour electable again after nearly two decades in the doldrums, and his successors cannot get away with celebrating its proud achievements in office whilst dismissing the values that underwrote those successes; it cannot have the one without the other.

Or is Mr Miliband Jnr smarter than that? The man dubbed ‘Red Ed’ – much to his proclaimed disgust – wasn’t part of Blair’s New Labour machine in quite the same way as his brother (Ed was an advisor to Gordon Brown at the Treasury before being elected; David was a policy aide in Number 10), but he surely recognises the importance of Labour’s occupation of the centre ground in enabling and delivering its recent victories.

He was also elected under Blair’s leadership, and in spite of toeing the party line on controversial issues like Iraq, and anti-terrorism, and the like – not because of his pledge to overstep it or shift it. His defeated brother may have had the look of a sore loser when he complained to deputy leader Harriet Harman about her apparent hypocrisy in applauding Ed’s anti-Iraq overtures, but his awareness of ‘how this looks outside’ was impressive in the circumstances, and may well have struck a chord.

That is why Labour’s protégé-cum-principal was careful not to make his self-crafted bend in Labour’s road too sharp, especially at this early stage of the journey and before the government’s roadmap has been fully drawn out (in the form of the forthcoming Spending Review announcement). Perhaps, he thought, it’s a little too early to nail his colours to the mast.

Or perhaps ‘Red Ed’ has a more sophisticated shade than his backers had hoped – and voted – for.