Opinion – NHS told to fill only essential vacancies due to ‘almost unprecedented’ finances | Society | The Guardian – John Gelmini

Dr Alf makes very telling points but bringing in the IMF will not solve the problem of the UK public finances and the NHS – that’s a political decision. An IMF sponsored bench-marking study of the UK public sector would confirm that the UK compares poorly to international competitors. Also generic prescriptions from the IMF would not help with weaknesses that are already known.

Why do I say this?

To begin with, we need to look at the reasons why, and whether or not, the UK keeps two sets of books.

Reasons Why
1) In 1885, at the height of British imperial power, and with a navy that was the biggest the world had ever known, the UK employed just 15,000 civil servants, had access to cheap food and raw materials and had a tiny population.

2) Now the UK has a total public sector, which if you strip out outsourcing contracts, employs more than half the working population.

Worse than that, it’s productivity is just 32% or 70 working days per 220 working day year, which means that 67% of them are effectively in “non-jobs”.

Of the days that are worked, the public sector delivers delay, inefficiency and incompetence which is why in Dr Alf’s lifetime (67 years), and even earlier, the Ministry of Defense has not completed a single project or piece of procurement on time and within budget. Cost overruns happen on every single contract and in the worst cases, they are up to 12 times the original estimate, with delays of up to 14 years for some equipment to come into service (e.g. the Bowman Radio for the British Army).

It is why the NHS, which is grossly overmanned, with managers delivering the worse morbidity outcomes for cancer and all other diseases of any country in Western Europe outside of Greece.

3) Procurement is neither centralized nor effective, so the public sector pays double what it should do for practically everything.

4) The UK’s local authority sector, the police and the fire service have too many layers, too many divisions (these are based on counties), plus in local authorities wholly unnecessary District, Borough,Mid County, City and Unitary Authorities. This means too many fire chiefs, local authority Chief Executives, service directorates, Chief Constables and too many managers. The police have a separate structure for transport and the City of London police are separate again and complete with different uniforms.

5) Each county council, unitary authority, Metropolitan Borough council, London Borough Council and some district and borough councils have their own contact centers, plus additional ones for Adult Social Care. The police normally have two per force area/constabulary, one for non emergency dispatching and one, always under the operational command of a person of inspector rank and above for emergency dispatching and incident management. The NHS then have separate control centers for ambulance dispatching.

It does not take a genius to see that with large shared service centers, covering perhaps an area equivalent to four counties, you could reduce the number and cost of such operations by over 90%.

6) Adult Social Care is the “elephant in the room”, representing 55% of county council, unitary authority and London Borough Council costs.

These costs could be brought down by 33% by aggressive re-enablement, education, the prescription of exercise rather than drugs, zoning laws designed to promote healthier eating, the use of robots in care homes and the transference of Adult Social Care recipients without close relatives to warmer climates, like India and Thailand where they could be looked after at a fraction of the cost.

The Possibility of a second set of Books
Since 1981, the UK has not kept balance of trade figures, yet the gap was £3 billion gbp a month between what we bought and the little we sold, even factoring in “invisibles” from the City of London.

We were able to keep our AAA credit rating until 2012, so what was it that made that possible when our cost of delivering public services was 3 times that of Singapore’s and we were and are 20th in the world for the costs of delivering public services overall and per head?

There should be a forensic audit of the country’s finances to see what was collected, what precisely it was spent on, what was left over and exactly where the rest went.

Currently, one does not need to be a chartered accountant and Doctor of Business Administration, like Dr Alf, to see that the infrastructure and services that taxpayers money has bought cannot and does not reflect anything like what taxpayers have shelled out over the years.

Waste, cock-ups, “mission creep” on projects and duplication accounts for some of it but clearly not all of it, so the forensic examination must/should focus on that which cannot be explained away.

This should extend to those who handled the money and the bank accounts of relatives, spouses, partners, mistresses and lovers and if malfeasance is found then the process should lead to arrest, trial, conviction, incarceration and asset recovery just as it does for lowly benefit fraudsters.

Similarly, there needs to be an audit of monies and assets held by the UK Government and any front organisations it may have to see what monies and assets could logically be brought back onshore to help with the nation’s debts.

Perhaps on reflection, Dr Alf is right, the only organization with the stature to complete an independent review of the UK’s finances is the IMF. Whilst George Osborne may be a successful political chancer, I’m not sure he’s brave enough to call in the IMF.

John Gelmini

Spain’s Economy – Back on its feet | The Economist

This is an excellent, must-read article from the Economist. Check it out!

via Back on its feet | The Economist.

As a result of structural reforms to Spain’s labour market, Spain is now growing strongly ahead of the Eurozone’s norm. Had the reformed labor market been in place earlier, some authorities claim that Spain’s unemployment levels would not have been so severe.

However, Spain’s pain fell mainly upon the young with temporary employment contracts, whilst older workers with traditional jobs have been more protected. Spain’s economic pain was triggered by a property crash, as result of dodgy banks and widespread corruption, countenanced by a socialist government that turned a blind eye and squandered a fortune on pet political causes.

Spain has taken her austerity medicine undiluted, which was prescribed by her creditors, especially Germany. For another insight into Germany’s own labor market reforms open this link.

In comparison to Spain, many other South European countries, most notably Italy and France, have not yet reformed their labor markets.

Personally, I believe that the protected status of some of Europe’s workers is not sustainable. If economic levelers don’t work, watch out for the political reaction, with polarization towards both the hard-left and the hard-right. In this context, I believe that the labor market reforms implicit in the German model are probably the least painful.