The Guardian makes a compelling argument, citing right-wing critiques of foreign aid as lazy in their thinking and not looking at the evidence.
It occurs to me that this is not just about a false choice between flood defenses and foreign aid. The problem is wider and multi-dimensional – the savage cuts to the UK’s public sector have impacted front-line services first and foremost. There are similar risks in defense, healthcare and other important areas. Of course, Osborne’s bacon-slicer approach, top-slicing, has resulted in costs cuts rather than cost enduring reduction. There are still massive opportunities to remove inefficiency from the public sector – a strategy is required which addresses consolidation, technology, outsourcing and offshoring. Similarly, the service offering needs radical reform too, for example, this needs to replace the UK’s public health service with a best practice model. Even with an effective strategy, there is another important area of weakness, namely strategic delivery – this typically relies upon ineffective bureaucrats and major consulting firms charging up to GBP5,000 a day. All of these areas of specialization used to be my areas of expertise before I retired overseas – the UK public sector procurement model favors cronyism and is loaded against independent expertise. The UK must address the public sector effectively before the economy can go on a sustained growth path.
George Osborne‘s principle strategy is about austerity. BUT this is for ideological reasons rather than economic analysis.