Andrew Haldenby is Director of the independent think tank Reform.
Today’s announcement by the new False Economy campaign should give heart to supporters of public service reform. The campaign has found evidence of 50,000 NHS job losses over the next five years. Reform’s previous research has shown that public sector job numbers must fall, by around a sixth, if the deficit in the public finances is to be eliminated. That would mean a reduction in NHS staff numbers from 1.4 million to approaching 1.1 million. If public workers accept lower wages, the necessary job losses will be reduced.
The underlying argument of the campaign is that there must be a certain level of public sector workforce, no matter the cost, and there must be the same working arrangements, no matter the need for improvement. This makes the false assumption that the number of people that do a job is the measure of quality. Instead NHS managers should focus on higher quality public services based on more productive ways of working. For this reason the financial pressures make this the best chance in a generation to change NHS services.
This is clearly the argument that the Government should make. It would be consistent with the brave call for reform that David Cameron made on Monday and indeed with the whole thrust of the Spending Review. But the Government is paralysed by its completely unrealistic position that it can reduce public spending without affecting front line services. In fact the great, great majority of the costs of police forces are in the officers, and the doctors in the NHS, and so on. Of the 1.4 million people working in the NHS, only 236,000 are administrative support, and those people are on much, much lower salaries than doctors.
In fact the Government is now being hoist by its own petard. It has put itself in a position where every reduction of a front line job damages its reputation, despite the fact that every reduction helps its achieve its key objective of eliminating the deficit. It is forced to criticise public service managers taking the tough decisions instead of supporting them. On Monday David Cameron argued that that success should be measured by outcomes, not inputs. Today the Department of Health said, “Since last May, there are almost 2,500 more doctors, more nurses and more midwives and 2,000 fewer managers.” There is a kind of black comedy about this.
The Home Affairs Select Committee also exposed the weak flank today, in its call on the Government to define just who is a front line worker.
In Opposition, Tim Montgomerie argued that the Conservative Party should drop its pledge to protect the NHS budget and instead pledge to protect front line services. If the Coalition wants to reform public services, it should actually drop both pledges. Home Office Ministers have been bravely arguing that there is no simple link between resources and results. The Coalition needs to apply that across government.