'Efficiency savings'? This row is about people, not numbers

By Jonathan Bartley
April 8, 2010

The row over the proposed National Insurance increase has continued today, which some are interpreting as small change. It is true that £6 billion isn’t very much compared to the overall annual Government budget of hundreds of billions.

What has become lost in the row - and is symptomatic of a much wider problem with many election issues - is that this is about people’s lives. To put things in a different perspective, £6 billion is also what it costs to employ 300,000 people a year on £20,000.

That is why the Tories should come clean about how many jobs would be lost in their proposed “efficiency savings” and what the other human impacts might be. They are claiming that Labour’s national insurance increase is a "job tax". You can understand why big business, and even members of Dragons Den are complaining, because it will squeeze profits. But there are job implications for the extra £12 billion of "efficiency savings" about which the two big parties are arguing.

There are of course, other ways of dealing with both National Insurance increases and efficiency savings besides losing jobs. As companies have found in the recent tough financial climate, you can also introduce salary cuts across the board, or shorter working hours. A more co-operative approach can avoid redundancies.

So what are the Tories proposing to do to find the extra £12 billion? This is of course in addition to the "efficiency savings" that Labour have also already set out and are already underway and to which the Tories also subscribe.

Some details of how they'd do it are set out in a brief document drawn up by two of the government's former efficiency advisers (Sir Peter Gershon and Dr Martin Read). The paper calls for cuts in spending on information technology, curbs on recruitment and other 'cost-saving measures'. These are all in the public sector. In the first year, half of the Tory savings would be reallocated to frontline services like health. The other £6 billion would be used to cut the public deficit.

Conservatives say these are "efficiency savings" not cuts. They insist that the money can be saved "without affecting frontline services". But the crucial detail isn't there. And it is naive to think that there would be no impact on people. One proposal for example is about outsourcing 'back office' functions. Another is about cutting costs of property services. But if you change suppliers (which is another proposal) that has an impact on the company who supplies. There is always a knock on for people somewhere. And this needs to be acknowledged, particularly if you are accusing the other party of having a 'tax on jobs'.

The Tories have talked about a more co-operative approach to public services, but is this the kind of thing that the Conservatives are proposing? We need a human impact assessment. Who exactly loses in the proposed Tory 'efficiencies'? What's the knock-on effect? Will jobs go? If so, whose are they and how many?

Those about to vote need to know the real cost, and who is going to pay for the Conservative proposals.

[Update: 21.59 Up to 40,000 public sector jobs could go under Conservative cuts plans, the Financial Times claims. The paper says Mr Cameron's adviser, Sir Peter Gershon, has revealed that he has told the Tory leader to cut £2bn from the public payroll in the first year of office if he is victorious on 6 May. More here]

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