What Vince Cable would cut


by Rumbold
15th September, 2009 at 4:21 pm    

I think this is what is needed. While more must be cut, at least the Liberal Democrats are willing to set out what they think should be abolished. The Conservatives make small suggestions, but they should be more open. People aren’t opposed to cuts in administration, but want to protect frontline services. The only way to do that is for politicians to take the lead, rather than leaving it up to civil servants, who will invariably protect themselves (at the expense of frontline services):

• Zero growth overall for public sector pay (saving £2.4bn a year), a 25% reduction in the total pay bill of staff earning over £100,000 and a salary freeze and end of bonuses for the civil service (saving £200m a year).

• Tapering the family element of the tax credit – saving £1.35bn.

• A radical review of public sector pensions with the view to moving to higher employee contributions and later retirement ages. There is currently a £28bn subsidy to unfunded schemes.

• Scrapping several major IT systems including the ID card scheme (£5bn over 10 years), Contactpoint (£200m over five years), the NHS IT scheme (£250m over the next five years) and the proposed “super database” (£6bn).

• Curbing “industrial policy”, including scrapping regional development agencies (£2.3bn annually) and reducing by at least half the Train to Gain and skills councils budgets (£990m together a year).

• Reforming the National Health Service by reducing centralisation and over-administration, starting by scrapping strategic health authorities (£200m a year), by strengthening commissioning and with “supply side reform”, in particular tariff reform, could save around £2bn a year.

• Curbing centralisation in education by cutting national strategies and scrapping quangos – saving around £600m a year.

• Reducing the amount of waste in the defence procurement process, including scrapping the Eurofighter and Tranche 3 (£5bn over six years), the A400M (total cost £22bn), Nimrod MRA4, the Defence Training Review contract (£13bn over 25 years) and the Trident submarine successor (£70bn over 25 years).

• Examining possible future public sector asset sales, including some aspects of the Highways Agency (land value of £80bn) and intangibles such as spectrum, landing rights and emissions trading.


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  1. platinum786 — on 15th September, 2009 at 6:06 pm  

    Defence would be in a lot of trouble. If your going to scrap trident, you might as well scrap nuclear weapons altogether. If you don’t have the means to deliver them, then why have them at all. Also if we did scrap nuclear weapons, what stops you becoming Georgia? I know it’s a bit unrealistic but the reason Britain punches above it’s weight on an international scale is because it has nuclear weapons to back itself up with. As professional as our armed forces are, they can’t compete in a conventional war with the likes of Russia/China who are people who Britain may have a conflict of interest on the world stage. Without a nuclear threat there is more chance of them throwing their weight at you.

    Similarly without the Euro fighter within the next decade or so the RAF will be pretty toothless. It’ll have to rely on a small number of F-35′s they’re going to purchase. Iraq and Afghanistan didn’t have an air force, but who might you have to face off with in 20-30 years time? Scrap these projects now and you’ll pay the price then.

    I’m also concerned about the jobs. The IT projects scrapped all have IT guys working on them, what do they do? Similarly Trident and Euro Fighter will provide British companies and British workers jobs.

    I’m not saying their idea is bad, i just wonder how thought out it is.

  2. MaidMarian — on 15th September, 2009 at 7:26 pm  

    Four thoughts – (I put something similar on the CiF thread under the name ‘JedBartlett’)

    1) There appears to be an article of faith here that ‘decentralisation’ will save money. I would suggest that the decentralised option is not always the cheapest. There also seems to be an assumption that the decentralised entities will agree with Lib Dem spending priorities. Cable seems to be suggesting something like the Thatcher vision of decentralisation that bypasses local democracy.

    2) Much though the keyboard civil liberty warriors don’t like the idea, databases do save money and (potentially) the need for public employees. The NHS IT scheme in particular could be a money saver.

    3) Asset sales sounds suspiciously like selling the family silver. As we saw on the railways, that tends to lead to privatised companies providing poor service whilst the public demand of government that ‘something must be done.’ Then we end up with things like a Strategic Rail Authority. Asset sales is giving authority but not responsibility.

    4) The bit about public sector pensions is a cheap shot. A discussion with the public about a general raising of the retirement age would be really impressive.

    As things stand, I feel as if I should like Cable, but his writing always seems to come as a bit of a let down. A mix of populism from a politician who knows he will never have to face down the Mail and New Labour bottling.

    Incidentally Rumbold, ‘civil servants, who will invariably protect themselves (at the expense of frontline services)’ Something of a sweeping generalisation?

  3. douglas clark — on 15th September, 2009 at 8:59 pm  

    Rumbold,

    On the military front I am less than impressed. Whilst I would be happy to give up the Trident replacement, I don’t think I’d be willing to do it unless it was part of a multilateral agreement. There are too many people tooling up right now for that to be a genuinely viable option.

    Withdrawal from the carrier option and the A400M projects seems to me to simply move the costs to the Social Security budgets as both would be employers of UK labour. And both are designed for force projection, which we haven’t, apparently, given up on yet. And would simplify rapid response under potential R2P obligations, which is something I’d have thought the Liberal Party would be in favour of.

    A more radical approach would to be apply his Civil Service wage cap to the whole of society, instead of encouraging yet another tribal split. If it’s sauce for the goose….

  4. douglas clark — on 15th September, 2009 at 9:04 pm  

    And calling the pension rights of employees in the public sector a subsidy is pish. It was part and parcel of their employment contract. It was the governments choice not to fund it as they went along. Their mistake, not the employees.

  5. Rumbold — on 15th September, 2009 at 9:15 pm  

    Platinum786 and Douglas:

    On defence, I do agree that there needs to be more of a debate on trident and defence in general. I am not obsessed with getting rid of it, and I don’t agree with everything on Vince’s list. But I do like that he has made a list, and is prepared to defend each part of it.

    MaidMarian:

    Decentralisation can save money, but I agree that it is not a panacea. WWhere we do benefit from it though is when money is aligned with power (so at present local coucnils have more power than they do money).

    Databases are not bad per se, but again so mnay of the big projects have been handled so badly. Why do we need to spend all this money on them?

    I bet we could sell some assets without compromising efficency. At worst we could sell prime land and rehouse agencies in cheaper areas of the country (as most don’t actually need to be in London).

    The piece on pensions certainly isn’t a cheap shot. I wish it was.

  6. MaidMarian — on 15th September, 2009 at 9:47 pm  

    Rumbold – I agree with you that it is nice to see a list, even if I disagree with parts.

    I am not sure about decentralisation though. Surely if a localised authority wants to tax and spend regardless of the national debt it should be free to do so? My concern is more about Cable seeming to equate localism with savings. It’s a hostage to fortune and one that does detract from the list.

    As to agencies in London, again, agree that there may be some scope to move. But most government buildings are on long-term leases with a peppercorn rent. This has been looked at over and over again – the savings are not there whilst there are very long-term leases. Granted, the lease may be worth something but I suspect the overall savings are not there.

    My view is that what is needed is for the pressure on government to be to ‘do less.’ And by that I don’t mean cut big projects. I mean for people to accept a photocopy of a standard letter rather than something personalised, with logos sent within 24 hours. I mean for people to not jump up and down about every Mail story. I mean for journalists to stop blaming the government for every little thing.

    Low expectations? Maybe. But do we want less or not?

    On a separate point Rumbold, do you think that the retirement age for all (public and private) should be raised?

  7. Gareth Hughes — on 16th September, 2009 at 3:31 am  

    Well, the fact that Cable’s outline budget is the least worst on the table so far is still not that much to cheer. After all, we are cutting spending to pay for the bail outs and the losses caused by those bailed. What is more, there is still no policy driving these cuts. We might be able to perceive something of localism and nuclear disarmament, but that’s about it. I should have liked a bit of economics from Cable, but cuts seem to be the dogma right now. The only choice left is to vote for the party that weeps rather than laughs as it snips away. If only someone would offer something different!

  8. The Common Humanist — on 16th September, 2009 at 9:52 am  

    I have little time today but:

    Defence: I would suggest that given the, reletive, youth of the Vanguard Class Trident Subs replacing is a decision that could be put off until the parliament after next – i.e. 2015/16 ish. It would stretch the legs of the vessels but it is doable.

    I would suggest we scrap the Strategic Nuclear Option but that would leave us having to rely on the US for nuclear deterrant. Half of the US body politic is looking increasingly insane (Hi GOPers, you freakin’ loons) and that does worry me.

    So putting off a decision is probably best for now. It is worth bearing in mind that the only people who think Trident missles will soon be able to be intercepted are executives at BAE anbd Thales and Civil Servants at the MOD who want to go work for said firms.

    However, the procurement of the two QE Class Carriers and the VERY expensive F35s could be stretched out over a longer time.

    Spending on the Army needs to rise considerably – we owe these men big time and pay and conditions as well as numbers simply must rise.

    TRanche 3 Typhoons are probably quite vulnerable therefore.

    Perhaps a joint NATO force of A400s might be a good option to save some money. Getting France and Germany to raise their defence spending and do more of the heavy lifting would be welcome, if unlikely.

    In terms of strategic power projection it is probably wise to consider matters on a NATO wide front.

    So no easy answers then!

    Still, kudos for Cable for publishing. Cameron is obsessed with the micro peripherary. Brown is deploying on a geological timescale so Cable has a marhc on them.

    He really really should be LibDem leader. Despite being a Labour Party member I would seriously consider voting for Cable in a direct election for PM.

  9. Rumbold — on 16th September, 2009 at 10:10 am  

    MaidMarian:

    Interesting point about the leases. I suppose that would reduce the benefits of any move and sale.

    I agree wholeheartedly that there should be pressure on the government to do less. As you say, the newspapers have their part to play as well. We need a wholesale change in philosophy that means we don’t run to the state every time there is a problem.

    I would raise the pension age to 70 in both sectors right now, and then link to rising life expectancy in the future.

  10. Dan — on 16th September, 2009 at 10:42 am  

    Overall this sounds like a good start on the cuts needed in the public sector.

    Only one I would object to is the raising of retirement age for public sector workers. It’s already high enough – if it goes much higher, there will simply be no point in being in the scheme, as you’ll be dead before you get to enjoy much / any retirement. This will stop people using the scheme, but then maybe that’s the point.

  11. Shatterface — on 16th September, 2009 at 11:06 am  

    ‘I would raise the pension age to 70 in both sectors right now, and then link to rising life expectancy in the future.’

    People don’t have the same life expectancy. Are you suggesting we raise it for middle class white women in the South?

  12. Rumbold — on 16th September, 2009 at 11:08 am  

    I would link it to average life expectancy. It’s not prefect, but better than a complex system which would cost a lot more.

  13. Naadir Jeewa — on 17th September, 2009 at 12:07 am  

    @9, @11, @12

    Last time I looked at ONS figures, pension spending will stay mainly static over the next few decades with current plans on gradually increasing pension age.

    Checking with the last projections don’t provide a great rationale for adjusting already chosen pension reform plans (ONS predicts 0.4% increase in spending as a percentage of GDP by 2050).

  14. Luc — on 17th September, 2009 at 12:07 pm  

    Bit alarmed by the suggestions on Education ‘cutting national strategies’ is a bit vague, but sounds like it is threatening the bodies that make a difference in educations such as SSAT etc. These organisations have made education much more dynamic and it would be a shame to loose them…

  15. MaidMarian — on 17th September, 2009 at 10:17 pm  

    Naadir Jeewa – Maybe, the slight unknown is that one generation has been able to feather its own nest by pricing others off the property market. The effects of that are difficult to model.

  16. ukliberty — on 20th September, 2009 at 1:26 pm  

    MaidMarian,

    2) Much though the keyboard civil liberty warriors don’t like the idea, databases do save money and (potentially) the need for public employees.

    Well, some do and some don’t. Some projects are handled really badly – and some of those so badly that they are cancelled. Others work well, tis true.

    As responsible citizens sincerely wishing to engage with our system of government, it would be great if we were allowed to see a cost-benefit analysis for each proposed project – we could then determine which are worth proceeding with and which aren’t.

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