Outlook: Public spending

THE GOVERNMENT has dispatched a "hit squad" of senior business people into the public sector to help improve efficiency levels. The Public Services Productivity Panel is not due to report for another six months but here are the minutes of its inaugural meeting, found blowing along Whitehall outside the Treasury's offices.

"In accordance with Alastair Campbell's instructions, the launch of the PSPP was timed to ensure that every department comes up with at least one positive announcement for each week of the parliamentary recess.

The bad news is that the Chief Secretary has told us to identify pounds 8bn worth of savings. The good news is that we have until 2001 and anyway, even pounds 8bn is only 2.5 per cent of total public spending.

After a brainstorming session down the pub, here are a few ideas we might conceivably build on. Clare (Spottiswoode) has been asked to find pounds 150m of savings from the annual police budget. As you know, Clare understands the criminal mentality better than most having been accused by British Gas of masterminding "the biggest smash and grab raid in history". Her suggestion is that we put David Varney in charge of the Met and watch those savings materialise miraculously with only a fraction of the job losses initially threatened.

John (Mayo) has been charged with sorting out the schools, making them more accountable, that sort of thing. His initial thought was to turn them all into individual cost centres reporting their financial returns monthly to Lord Weinstock. Then he remembered that this is New Labour, New GEC and is now working on a demerger plan.

The other John (Makinson) is taking a look at pay in the Inland Revenue and Benefits Agency and how to motivate staff. He appreciates that linking pay to performance, whilst holding out the possibility of truly enormous savings, could also be bade for morale. Instead he suggests free Penguin Classics in place of luncheon vouchers.

Andrew (Foster, as in Controller of the Audit Commission) hasn't yet decided what to do about housing repairs and gingering up the DVLA. But he reckons if he makes a decent fist of this, he is a shoe-in for the top job at the CBI - apparently its where everyone goes onto from the Audit Commission.

As for myself, you know KPMG had rather a success in advising HMG to turn BNFL into a PPP and I'm sure the PM can be persuaded that the NHS is a suitable case for similar treatment.

Our next meeting is in September. See you all then. Dame Sheila Masters.

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