Costs and Waste

Sir Phillip Green’s work, on identifying ‘shocking’ waste in the public sector, showed just how far off being commercially run government and public bodies actually are.

With such atrocious wastefulness, it is no surprise then that the public sector is such a colossal consumer of national resources. The only pity is that it has taken a financial crisis, a chronic deficit and a world recession to make us collectively do something about it.

We must hope (shame we cannot be more certain) that waste and inefficiency are reduced drastically and that costs are cut aggressively in all areas of the public sector. The problem will be making sure that measures are taken effectively and urgently.

Following the cuts announced on 20.10.2010, one item leapt out and poked me in the eye. It was the revelation that the BBC World Service has hitherto been funded by the Foreign and Commonwealth Office (to the tune of £272m per annum, currently). Now, I didn’t know that. Did you?

Can you imagine the reaction of any businessman, embarking on a cost-cutting exercise, suddenly coming across a whacking great expense like that, which takes a big bite every year out of available income. After cries of outrage and possibly quite a few expletives, the businessman would say “look at this grotesque expense that we are paying, which we quite simply should not be paying. Make them pay for it themselves. Strike it out immediately!”

The government is, quite rightly, to make the BBC pay for the World Service, but not straight away – only from 2014! You couldn’t afford to do that if you had to run a business. Little wonder that there is a great deal of cynicism about when and by how much public sector expenditure and waste will actually be cut.

Published on Oct 22, 2010 by Neil Thomas