Andreas Whittam Smith: What the Coalition have got right so far

The axing of the Film Council and Audit Commission has put all quangos on notice that they have no divine right to exist

Thursday 19 August 2010 00:00

There may be one big thing wrong with the Coalition's plans to slash government spending – that it risks tipping Britain into a new recession – but there are many things right about the policy.

1. It has generated the most hard fought attempt ever undertaken to simplify the welfare system and to target it more precisely at areas of genuine need. Out of the struggle between a driven idealist, Iain Duncan Smith, who is Secretary of State for Work and Pensions, and a hard- faced Treasury there may come an imaginative, practical solution. The question whether the better off should receive child benefits and, when they pass the age of 60, winter fuel payments, bus passes, free eye tests and free TV licences is up for debate, as it should be.

2. The announcement of a reduction in government press officers weakens the army of spin.

3. The question is at last being asked whether it is fair that through their taxes, employers and employees in the private sector should have to fund retirement benefits for public sector workers that in the private sector they cannot afford to arrange for themselves – pensions that are inflation-linked, guaranteed and unfunded. To study this scandal, a commission to review the long-term affordability of public sector pensions has been established.

4. The oversupply of generals, admirals and air marshals is being tackled. It is an extraordinary fact that when organisations shrink, the first to go are the rank and file, leaving a surplus of executives. You can see the same phenomenon in the Roman Catholic Church in recent years – fewer priests, same number of bishops.

5. Talk about entering a no-go area. The Coalition has opened up the question whether council housing should be more closely related to need than the current system of tenancies for life allows. About one fifth of council tenants don't need subsidised housing, for they earn more than the median UK salary of £20,801. Moreover, much of the space is unused – some 430,000 social housing homes have two spare bedrooms. Yet the 1.8 million families on the list for council housing must wait an average of seven years before they qualify. Dealing with people's homes is not easy territory. No previous government has raised the issue.

6. Setting ambitious targets for cuts in administrative spending by government departments and quangos at least has the virtue of bringing about an overdue consideration of priorities and of long established methods of doing things. Are the same old methods really the best? Does the Government need to fund all that it currently does? These are good questions.

7. The axing of the Film Council and the Audit Commission has put all quangos on notice that that they have no divine right to exist. This jolt to their self-esteem will do nothing but good.

8. The notoriously inefficient Ministry of Defence is being put to the test. It had made plans to spend around £37bn over the next 10 years without knowing where the money is coming from, of which £20bn relates to equipment and support. And all this without having answered a question of principle: what size and type of armed forces do we need to deal with what risks? Must we always be ready to do another Iraq or Afghanistan?

9. Private suppliers of goods and services may less often dupe the Government now that some contracts are to be renegotiated.

10. The emphasis on welfare fraud has, perversely, turned the spotlight on a much bigger leakage of tax revenues – middle-class and corporate tax dodging. It is now a very interesting question whether the Coalition government can take action against the one without tackling the other.

11. At last we have a Secretary of State for Justice, Ken Clarke, who queries the purpose and profit of sending increasing numbers of criminals to prison. The total has doubled since the early 1990s. Mr Clarke has asked whether the public actually feels any safer as a result of the huge increase in the population. Good question. Can we hope that prisons will now become places of "education, hard work and change", as Mr Clarke says, as well as of punishment?

12. We are going back to the Victorian idea – and none the worse for that – that "saving candle ends" should be a duty on government departments whose only resource is, after all, our money. Public servants are being obliged to manage taxpayers' money wisely. In addition, each secretary of state is to appoint a minister with specific responsibility for driving value for money across his or her department and the role of the departmental finance director is to be strengthened.

13. The Government is using the power of the internet to curb waste. The Secretary of State for Communities has led the way by publishing online details of every item of departmental spending on goods and services over £500 in 2009/10. The public can now see what was purchased, for how much and from whom. Previously unseen Department data shows 1,900 separate items of expenditure totalling £314m. This includes £635,000 on taxis and cars and nearly £310,000 on catering and food. They also show the Department last year spent £16m on marketing, advertising, promotion and events. The Treasury is committed to publishing online all new items of central government spending over £25,000 from November. This is a powerful deterrent to overspending.

14. The notion that, by setting a multiplicity of targets and enforcing them, ministers can ensure acceptable delivery of public services, has been dropped. This New Labour idea was government by diktat and wasn't really "management" at all in the commonly accepted sense of the word.

15. The police have been told that they are not a protected species that can preserve unreasonable perks through thick and thin. A review of the terms and conditions for police officer employment has been announced.

16. The Government may at last gain full advantage from its enormous buying power.

17. Never before has the help of the general public been enlisted for such an exercise. Some dismiss this as mere public relations. But 100,000 members of the public haven't thought so; they have already had their say. They have provided detailed, well-informed comments and suggestions.

18. Finally, whatever the results of the Spending Review, good or bad, as time will tell, they will have been the product of proper Cabinet government and collective decision-making by ministers. That is a welcome change.

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