If this week's pre-Budget report constitutes the main course, yesterday's speech by Gordon Brown to the Royal Society might be regarded as an appetiser. It certainly came with a juicy headline figure. The Prime Minister claimed to have identified £3bn of efficiency savings, over and above the waste-cutting measures outlined in April's budget.
The main thrust of the address was that technology can make the public services more efficient and less bureaucratic. Mr Brown spoke of requiring police forces to publish online crime maps and schools to post performance reports on the internet. He argued that if all doctors' surgeries send patients appointment reminders by text message some £600m a year could be saved by reducing missed visits.
There are indeed many potential benefits to be gained from harnessing technology in the public services. The publication of information online should, in theory, enable the public to compare relative performance and put pressure on service providers – be they schools, police forces, or hospitals – to improve. But the problem is that such technological innovations are not proven money-savers. Another eye-catching suggestion in the speech was Mr Brown's idea that overpaid public sector workers should, in future, be "named and shamed". Transparency is a wonderful thing and our public sector would certainly benefit from more of it. But it is unclear how, in itself, greater openness would bring down the bills.
The proposal to move more civil servants outside London has merit. Regional economic growth in Britain has been deeply unbalanced, with the South-East particularly favoured. The Government should be counteracting, not reinforcing, that trend. Yet the idea that creating employment outside the capital – welcome though that would be – would save substantial sums of money again seems over-optimistic.
In fairness, some of the pledges were more solid. Mr Brown promised that government spending on consultants would be cut by half. There is little to regret about that. What is the point of a public sector management that constantly out-sources its responsibilities to expensive private-sector consultants? The proposals from Mr Brown for a pay review for senior civil servants should also yield genuine savings if acted upon. And the announcement at the weekend from Alistair Darling that parts of the expensive NHS IT system will be put on hold is another encouraging sign.
Yet it is misleading for politicians – of any stripe – to imply that the present deficit can be substantially reduced through relatively painless efficiency savings. Fiscal consolidation will mean cuts not just in how the Government spends money, but in what it spends it on. This means that entire programmes will need to be delayed or abandoned.
The British economy is still in a fragile state. If state spending is cut too hastily there is a risk of plunging Britain back into recession. Yet the deficit does need to come down over the medium-term. That consolidation needs to happen in such a way that programmes that are important to the country's long-term economic development prospects are protected.
We still await details on what this government regards as its spending priorities for Britain's future. In that respect, the appetiser was something of a disappointment. The main course will need to be considerably more convincing.Reuse content