Thursday, October 08, 2009

Why Osborne is totally wrong

George Osborne, in his speech to the Conservative party conference demonstrated the total lack of understanding of administration that we have come to expect from almost any politician in the UK.

Faced with the explosion in the costs of the public sector, Osborne's answer is simply to freeze salaries across the board. It is certainly the case that labour costs have run out of line, but the deal that Osborne offers is essentially "accept a pay freeze and keep your job". This is not public sector reform: indeed it pretty much guarantees that the motivated staff will leave and the quality of public sector personnel will fall.

Mr. Osborne's supposedly "eye catching" and "brave reform" in effect strangles the ability of public sector management to carry out the necessary streamlining of the system: they can not fire under performing staff and they can not incentivize the staff that they want to keep.

This is not public sector reform: it is the abandonment of such reform. The signal that the freeze sends will send to staff is very clear- no matter what you do you will be paid the same and keep your job. You can not be incentivized and you can not be fired.

From Teachers and Nurses to Prison Officers, the unintended consequences of Mr. Osborne's abject ignorance of basic management will be the exit of good quality staff and an overall decline in the effectiveness of those who remain.

It is, in other words, precisely the kind of disaster that only someone who has never managed any kind of business could seriously suggest as a sensible policy.

Dan Hannan had the nerve to say that the Conservatives were the true heirs to the Manchester Liberals. The difference though is that the Manchester Liberals were competent.

George Osborne is already demonstrating that he will be a foolish, ignorant, ineffectual and incompetent Chancellor of the Exchequer. The fact that the current incumbents are equally incompetent is not much of a comfort.

5 comments:

Anonymous said...

At least we got clarity from Osborne and not the jumble sale of two weeks ago in Bournemouth.

'Savage cuts' yes or no?

'Scrap or keep tuition fess' yes or no

'Means test child benefit' yes or no?

'Mansion tax' yes or no?

It usually the voters that don't know what the Lib Dems stand for,now the confusion has spraed to the Lib Dems themselves.

Go back to your constitiencies and prepare for another 90 years in opposition.

Ian Thorpe said...

You are absolutely right. It was noticable in the mid 1990s though there was a trend in business and government away from making evidence based decisions. Osborne is correct in saying the cost of the state needs to be reduced but he slips out of taking on the responsibility of deciding what is wasteful spending (quangos, I.T. vanity projects) and what offers value for money (nurses, competent teachers)
The kind of people able and willing to make those decisions are only found among people who have held proper jobs, not among those who get their degree and then go straight into politics or academic life.

Cicero said...

Anonymous: Osborne is dtraight out of the Jim Hacker school of politics- his failure ain't going to be pretty

Newmania said...

Liberals are never in business in my experience. It is generally a Party of teachers led by Financial Journalists and Bankers. Real business is not their world but when I meet a Liberal Builder I'll let you know.
I think you are unreasonable to ask Osborne to announce he will be firing one of the 8,000,000 voters whom Liberal rely on more than any other Party. I did not hear Clegg say anything about redundancies , perhaps I missed it
You think the Public Sector can be run like business but I cannot see how .We have tested targets and indicators to destruction and privatising is on the Conservative agenda where possible in the NHS and there will be the beginnings of a market in education. will shrink under Conservatives
It will never be efficien but then that is not its role . The idea that the Liberals would take on the NUT is one of the more risible of your Fairy tales C ....
Why is it that the Liberal Party seem to have an army of caravanning campaigners for by elections in the school holidays do you suppose?

That’s right

Matthew Huntbach said...

"Exit of good quality staff"?

To where?

One of the consequences of the freeze is that few new posts come open. If one does, to save costs and keep good harmony in the workplace, it will generally be placed in-house.

The private sector is not exactly creating jobs at present, is it?

Anyone knows that placing your job at risk now is to risk financial ruin. A good quality person leaves the public sector to an uncertain job in the private sector? If there were plenty of opportunities, maybe. If you have a mortgage to pay, and taking a risk which could leave you without a job may very well risk a long stretch of unemployment, you stay put.

Management by fear, which is what you seem to be advocating, does not work, Cicero. People who are frightened that if they put a foot wrong they may lose their job and thus face homelessness play it safe. So don't try anything innovative, do just what the boss says, don't don't don't be a troublemaker (e.g. by pointing out where money is being wasted or the boss is useless). That is what we are seeing in the public sector now, Cicero, and that is what you are advocating.

People are motivated by personal pride in the job, curiosity, wanting to provide a good service, not just by money, Cicero. So job security actually works because people aren't afraid to try something out that might be good and might not.