Wednesday, October 17, 2007

Two Types Of Government Waste

Those who've read Statistics Made Simple will know about the two types of statistical error- Type I errors, where you deduce a positive from a negative, and Type II errors, where you deduce a negative from a positive.

Or is it the other way round?

Or is it neither?

Well, anyway, there are definitely two types of error.

Just as there are two types of government waste.

Type I waste is where the Commissars simply confiscate a load of our money, cart it off to a deserted spot, and set fire to it.

Type I waste is relatively harmless. Nobody gets hurt- except maybe a few entirely expendable apparatchiks- and apart from being robbed of our money, we punters are not greatly inconvenienced.

A good example of Type I waste is the government's hopeless childhood obesity programme (see many previous blogs, eg here). That had the pie in the sky aim of stopping the rise in childhood obesity by 2010, and as we've just discovered, it was surreptitiously ditched last week.

Now OK, it cost us at least £1bn and was a bureaucratic fiasco. And OK, it achieved absolutely nothing other than to provide yet more public sector employment and various grandstanding opportunities for our politicos to claim they were "doing something" about the Fat of Doom. And OK, it will undoubtedlly continue under another guise with a new "target date" set way into the distant future.

But at least it didn't positively harm us. It was Type I government waste.

Type II waste is completely different. Type II waste is where the Commissars confiscate more of our money, but instead of carting it off for destruction in some deserted spot, they use it to bludgeon their way into our lives and oblige us to consume some life threatening "service".

Sadly, we know all too well about their plague hospitals, where unless you can afford to play the BUPA card, you have to take your chances. It is Type II waste- billions wasted on a dysfunctional service, but a service we all need and most people are obliged to consume.

Another terrifying example of Type II waste is state schools. We're currently spending £41bn pa on state schools in England alone, which is a shedload of money. According to the government it's £5290 per pupil, up 87% in real terms over the last decade (see table 8.5 here).

Yet the results for pupils are dire. According to today's shocking Ofsted report, half of all state secondaries fail to give their pupils a good education (see many previous blogs on failing schools eg here) It's not just a monumental waste of money, but a monumental waste of lives. A devastating example of Type II waste.

Big Government is riddled through with waste of both types. But the waste we should focus on most urgently is the waste that traps innocent bystanders in its coils.

Because Type II waste isn't harmless. Type II waste has victims- patients, pupils, and the victims of crime.

Or as they'd be known if these functions were carried out anywhere but government, customers.

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