Monday, 8 March 2010

We must shed the public sector of pointless managers

When I read a headline proclaiming an impending strike by civil servants I had no idea what it was all about. On reading the article I discovered it is all about redundancy pay. My chubby little heart was lifted by reading that five of the six trade unions representing civil servants had agreed to a change to the redundancy pay scale and only one was holding out against the plan. Under the new proposal civil servants will be entitled to far more than the statutory minimum, albeit less than their previous contractual entitlement. It looks like most of the unions have recognised the reality of an empty governmental purse.

It might be a different matter once the need to reduce government spending substantially becomes policy rather than a plan for some undefined time in the future. There are all sorts of ways one can look at the figures. I prefer a simple approach to match my lack of depth. Government spending, c£600billion; government income c£450billion; answer = reduce spending by c£150billion. There, nice and simple.

I doubt that anyone sees throwing people out of work as a good in itself save, perhaps, when the people concerned are politicians. Some of us are very keen to see every five-a-day advisor, carbon footprint assessor and street football consultants to be out of a job, but it has nothing to do with wanting to see the individuals on the dole. Instead it is all about the jobs they do. They are non-jobs, they suck money from the productive side of the economy and deliver nothing of value; they represent spending for the sake of spending. The need for redundancies is far from clear, however.

The public sector has a large turnover of staff each year. One way to reduce staffing costs without sacking anyone is to use staff currently in non-jobs to fill vacancies as they arise in the parts of the public sector which actually do something useful. This will take careful and sensitive management but there is no reason in principle why an administrative assistant in a five-a-day advisory department could not use their skills in a court office or a hospital office or a tax office when an existing member of staff leaves. Of course it is unlikely that a satisfactory position can be found for everyone working in the non-value-added areas of the government machine, but there is no reason to believe that vast numbers cannot be transferred happily from one department to another. After all, if someone leaves a court office to take a job in the private sector they are simply transferring their skills from one work place to another; there is no difference in principle between that happening and someone else moving from one government office to another.

The "natural wastage" that arises every year through retirement and resignation does not always require new people to be brought into the fold. Identifying the areas of the public sector that are mere political fripperies allows the people currently employed there to be available to fill other vacancies.

That is not to say there will not be an adverse consequence on overall levels of employment. By definition, abolishing one role and using the person who filled that role to fill a vacancy elsewhere that would otherwise have been filled by taking someone off the dole leads to one fewer person being employed overall. But given the need to save £150billion (on my simple figures) the overall number of state employees will have to fall considerably.

Transferability of state employees is almost certainly easiest where the job is not technical, particularly where it is purely administrative. The greatest risk of redundancy is probably not in the paper-pushing side of things but in wholly unnecessary management roles. The management of departments often requires knowledge and skills that are particular to that department and are not easily transferable. Where the department is a waste of space the manager cannot expect to find another position in the civil service as easily as his secretary and the army of people who deal with mundane paperwork. The time has come, however, when the pointlessness of their department must be acknowledged and they will go the way of countless people in the past who had skills and knowledge that was no longer of any use. If they can be used elsewhere, so be it. If they cannot then it must be "thank you and goodbye". I hate to think how many people are employed in these positions at salaries of £40,000 and above (plus pension, plus car plus this plus that). A huge saving is possible if only someone finds the guts to say "sorry, your job achieves nothing".

It is worth noting that almost all non-jobs have always been non-jobs. I am not talking about the modern day equivalent of the brick maker whose skills were made redundant by mechanisation of the brick-making process. I am talking about the man with the flag walking in front of early cars to warn people that a motor vehicle was approaching. That was a non-job, created out of an abundance of caution about a risk that never existed. So it is with every public sector job concerning so-called "climate change" or haranguing people about what they should or should not consume, and so it is also with the countless talking-shop Quangos including those with "Regional Development" in their title.

Such of their staff who have skills useful elsewhere should be redeployed. It will save money without causing them to lose a day's pay. A big saving will be made by disposing of the highly paid but utterly pointless managers.

I did a rough calculation earlier today. It concerned a local shop that is suffering badly despite being run extremely well. There are two owners who both work there, three other full-time staff and five part-timers. Assuming all the employees are on £7 an hour and the owners draw £30,000 each (if takings permit that much), the income tax and National Insurance produced by that business in a year is roughly £25,000. Five full-time and three part-time workers work all year to pay the cost of half a senior climate change manager.

If the unions oppose such redundancies they should be shot.

1 comment:

H.R. said...

"If the unions oppose such redundancies they should be shot."

Yes. Repeatedly. Or am I being redundant?

Nice idea, those transfers.