Monday, 6 July 2009

Back to cuts....

So the Sunday press is full of further debate on cuts. Steve Bundred (CEO of the Audit Commission) writes in The Observer that:

"cuts are inevitable and perfectly manageable. We should insist on a frank and intelligent debate about how and where they will fall, which will then enable everyone to make sensible plans."

The Sunday Times says civil servants are working on proposals for a massive 20% cut in public spending.

Some interesting feed back on my "cuts" arguments in Friday's Blog. I lunch with Matthew Thompson, the dynamic, charming and sometime maverick CEO of the London Recycling Network and he puts it like this; it's the "fat people" who have most to worry with cuts not the "thin people". And he was not referring to the girth of his lunch companion! Its a good point.

We have to hope that in any debate on cuts and taxes we see civil servants and politicians looking at radical solutions. Matthew Taylor, writing in the latest RSA magazine says:

"If we are not to face the depressing and socially divisive prospect of year on year salami slices being taken from every major public service we need new thinking".

And I hope that any debate on cuts also looks at taxes. We will see a Banking White Paper this week. There is rumour that Government will back down on taking strong action on bonuses and astronomical salaries. This is wrong. If we are to avoid a repeat of the crash and instill a greater sense of fairness in how we handle taxes and salaries at a time of spending cuts we need to see Government accepting that radical change is needed. What would be more outrageous than to see cuts in spending and job losses whilst the financial institutions return to the bad their bad old ways, big bonuses and outrage at suggestions they pay a fairer share of taxes.

Matthew Taylor also argues that "necessity is the mother of invention" so the need for cuts ought to spur innovation in our public services. We must hope it does. Sector Chief Executives know that in facing difficult times we have been inventive in devising new ways of working and seeking out new opportunities. We will need that innovation and dynamism in the decade ahead.

2 comments:

John said...

I don’t know if it quite works like that. It would be nice if necessity was the mother of invention, but on its own there is a real danger that it just creates a climate where the best survival blaggers get to survive.

The key things about stimulating innovation have more to do with proactive management creating the right organisational culture, how things are incentivised and the presence of ‘patient money’ for long term projects.

The problem with this debate is that it is being led by events and therefore possibly starting at the wrong place.

Where innovation and efficiency may produce savings, savings don’t necessarily create innovation and efficiency.

Stephen Bubb said...

John , Tjis is an excellent point . Indeed I have reflected it in an article I am just writing for the wonderful Guardian. We need a radical approach to reviewing public spend rather than the salami aproach . As you say , the danger is that events drive a differnwet course.