Sunday, February 24, 2013

Sure Enough, Two Years Later...

That's the Xmas presents sorted

It took a whole lot longer than expected, but the book is finally written and published. Hurrah! Imaginatively entitled Burning Our Money, it's available now from Biteback, Amazon, Waterstones, and all good booksellers.

BOM the book draws together everything we've learned about government waste during six years of blogging it. The themes will be familiar to regular readers of the blog, but the book explores the issues in greater depth, setting out some possible solutions. And as always with BOM, there are plenty of facts and figures to support the analysis.

Here are some chapter headlines:

  • Despite all that agonised wrangling over cuts, government still spends nearly half of everything we earn: the OECD says that government spending will consume 48% of our GDP this year, compared to the international average of 42% (chapter 1).
  • The public sector routinely overpays for its supplies and labour, with staff getting substantially more than their private sector equivalents: depending on how you value those gold-plated pensions, labour costs are overrunning by as much as £60bn pa (chapter 2). 
  • Although NHS spending doubled under Labour, the NHS still underperforms overseas counterparts, causing thousands of avoidable deaths: according to the OECD 50,000 people under the age of 75 die every year from conditions that should have been treatable (chapter 4). 
  • Our government pays welfare benefits to three-quarters of British households, despite our high level of general prosperity (chapter 6). 
  • Our state schools are among the world's most expensive, yet performance is slipping down the international league tables and we suffer the worst social mobility (chapter 8). 
  • Our criminal justice system is the most expensive in the developed world, yet our crime rate is one of the highest (chapter 9). 
  • Compared to the most efficient governments elsewhere, ours wastes enough money to abolish income tax for everyone earning less than £50,000 (chapter 10). 
  • Despite promises of simplification and transparency, our government continues to hide its true costs behind a murky shroud of stealth taxation and disguised borrowing (chapters 11 and 12). 
Of course, none of these issues are exactly new, but when we dwelt in the land of milk and honey - the one from which we were so cruelly ejected in 2008 - we reckoned we could defer them until another day. No longer. Out here in the chilly wastes of mountainous debts, broken banks, and marauding competitors, we must act or go under. When even the credit rating agencies recognise the problem, we have to act. Somehow we've got to grip government spending and bring it back down to a sustainable level - which we reckon is around 35% of GDP.

Nobody says it will be easy, but it has to be done. And that's why we need to understand just how the government comes to waste so much of our cash. Because the irony of our present sticky position is that if we could somehow eliminate the waste, we'd pretty well eliminate the overspending problem - the numbers are that big.

So what can we do? To start with, we can learn from what works abroad. And the biggest lesson there is that size matters: it really does. The most efficient governments among developed economies are almost always the smaller ones. We've blogged a version of this chart before, but this one comes from the book (chapter 10):

Beyond that, choice and competition work. Just like with our supermarkets, when the suppliers of health and education services have to compete for customers, efficiency is driven up - something we can see operating in health systems based on competing social insurers (chapter 5), decentralised public service systems with localised tax authorities (chapter 3), and increasingly in free school systems (chapter 6).

And yes, supermarkets drop clangers too, but when they do so they have to put them right pronto: compare and contrast the speed with which Tesco moved to tackle its horsemeat disaster, with the long and shameful prevarication following recent disasters in the NHS (Mid-Staffs) and the BBC (Savile). As customers we have no effective power over tax-funded suppliers - they get paid however shockingly poor their service - and we can only watch as our politicos bicker over who's to blame. Far more powerful if suppliers who persistently fail us simply don't get any more of our business.

And that's the main conclusion of the book. To achieve a serious reduction in government waste, we need a serious restructuring in the way public services are delivered and paid for. We need real choice and competition, which among other things, means breaking up the NHS, accelerating the move to school independence, and empowering local councils by decentralising the tax system (chapter 13).

Restructuring like this will not be at all comfortable, and even worse, public service reform is only part of the discomfort. It's going to be just as necessary to cut welfare entitlements, and not only for those famous scroungers (chapter 8). Decent hard-working families and pensioners will also have to share the pain, with for example, the state pension age increasing to at least 70 (chapter 12).

So refreshed by two years of intensive thinking about such unthinkables, it's back to the blog. I do hope some of you will buy and read the book, not because I hope to get rich on the royalties, but because I think the issue of government waste needs far more public exposure than it gets. True, the awareness of waste has increased over the last decade, and the Coalition has taken a number of steps to address the issue. But there's much left to do, and the really tough decisions remain ahead of us.

We just have to keep plugging away.

PS Wat Tyler: after six years of non-stop blogging action, Tyler reckons he's too knackered to resume. So I'll be taking his place. Hopefully I can persuade Tyler's old muckers like the Major and Mr Gomulka to contribute their own bracing observations, just as they've done in the past.

PPS In restarting the blog I've transferred it onto Blogger's new enhanced platform. It promises a better blogging experience going forward, but it does mean the blog no longer shows the old comment streams - sorry about that. We've also lost some of the blog-roll links and other side-bar items, but I will be able to reinstate them.


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  2. Anonymous4:49 pm

    Welcome back! I was very pleased to see the BOM RSS feed pop back into life. Despite having been a long time BOM reader, I'll be adding your book to my birthday present wish list.

    It seems to me that, as one of the evil self reliant, largely self employed and now well shafted baby boomers, the UK is well past the point of no return from several perspectives - cultural as well as economic & financial. Every time I make the mistake of viewing the MSM TV & hear one of the Westminster Windbags spouting nonsense, I fill, afresh, with despair.

    Will you be applying your fine mind to escape strategies for oldies? Seriously - I'd love to get out of the UK, but am very aware of the frying pan & fire risk. Where would make a good destination? Some pointers, ideas & food for thought would help me to stop ranting & to get going instead. It could provide a new focus for an excellent blog.


  3. Yes, Welcome back indeed!

    Will now put you back on my blogroll.

  4. 555PPS7:51 pm

    Welcome Back.

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  5. Good that your back, please comment on the insane waste of money by the eco-loons as described here:


  6. Damn, if you had just made your reappearance a couple of days earlier it's possible the bean counters at Moody's wouldn't have stripped us of our AAA rating.

    I trust you're sending a copy to George in the hope it might reawaken memories of what Tory Chancellors are supposed to do in times of crisis.

    P.S. Welcome back.

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  7. Welcome back! I have just ordered the book on Amazon, and look forward to mining your information in the future. You have been sorely missed!


  8. john miller3:32 am

    At last!

    Welcome back...

  9. Welcome back, and congratulations! :)

  10. Anonymous9:12 am

    Welcome back, old boy! The Interwebs haven't been the same without you!


  11. Anonymous9:41 am

    Oh wow, welcome back!

  12. Good to have BOM back in action.

  13. Anonymous4:24 pm

    So very Pleased your back

    Albert E. Arkwright

  14. First Iain Dale, now you. Seems that the run-up to an election is underway - and there is plenty for these excellent commentators to say !

    Alan Douglas

  15. Anonymous12:15 pm

    Whey hey hey. Glad you're back & jope you're in fine fettle. No Major? Gaddzooks - has the sherry finally caught up with him?


  16. Welcome back, let's hope your message gets out there loud and clear, we need it. Perhaps more than ever before.

  17. Welcome back my friend.

    You have been missed so much, it was simply delightful to see your status updated on Julia's blog today. And we have the book too. I will be ordering a copy very soon.

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