Thatcher’s Final Victory?

Next Wednesday (20th October) we will hear the outcome of the Comprehensive Spending Review, and what it means for the scale of the cuts to UK public spending in each of the government departments. After that the detailed breakdown of cuts within each Ministry will gradually be revealed. Some news has already leaked out, of course. The Browne Report published last week almost certainly heralds huge cuts in the state subsidy to the UK University sector, with the cost of Higher Education consequently shifting from the taxpayer to the student. On top of that, and despite the best efforts of the Science is Vital campaign, it seems highly likely that there will be a steep decrease in investment in scientific research – both through the Research Councils and through the research component of Higher Education funding. On the other hand, the defence budget appears to have been spared the worst of the hatchet, with the Trident nuclear submarine programme set to go ahead (with a price tag around £25 billion) and two new aircraft carriers to be built at a cost of £5.5 billion (although it is not clear there will actually be any aircraft to operate from them).

Obviously, knowledge and learning are less important to the future of this country than the ability to fight pointless wars against invented enemies. Morover, we already spend more than most competitor economies on defence as a fraction of GDP, and less on  universities and science. How did we end up with such distorted priorities?

On top of these cuts we have to contend with a draconian cap on immigration. New restrictions on visas for non-EU citizens will make it much harder for British universities to recruit overseas students and staff. The new rules give exemptions only to those coming to the UK to take up highly paid jobs, such as professional footballers. Postdoctoral researchers and university lecturers don’t get paid enough to register as economically relevant, so many fewer will be able to enter this country. While these restrictions may satisfy xenophobic Daily Mail readers, they promise to damage the University sector almost as much as the funding cuts, as a significant fraction of the best staff in UK science departments are from outside the EU (including the two winners of the 2010 Nobel Prize for Physics).

All this sounds depressingly familiar to those of us who lived through the various Thatcher governments and their successors. In fact, looking at the following graph (which I nicked from Andy Lawrence’s blog, but which comes from a document produced by the Royal Society) you’ll see the steady reduction in science investment under previous Conservative governments

I know I’m not alone in interpreting these cuts as not being about the need to secure the country’s finances. The UK’s public debt as a fraction of GDP is rising, of course, and something needs to be done about it. But this graph shows the actual situation:

 

Serious? Yes, but not sufficient to justify the carnage we’re about to experience.

What is going on is that the parlous state of the UK’s finances is being used as a pretext to resume the Thatcherite attack on the welfare state through a campaign of privatisations and closures so that wealthy Tory voters can get richer at the expense of ordinary working people.

No doubt there will be people reading this who really think that cutting back state expenditure is a good thing, and even I agree with that to some extent. However, there is a part of Thatcher’s legacy that is actually the root of the problem and it represents a fundamental inconsistency of the Thatcher project. Unless it is tackled, the cut-and-burn route will not lead to a sustainable economy, but will take this country into inexorable decline.

The nub of the matter is the Invasion of the Bean Counters into every aspect of public life. The breakdown of trust between government and the public sector that ushered in Margaret Thatcher’s victory in the 1979 General Election has led to a huge increase in red tape involved in the assessment, regulation and general suffocation of public services. As the Thatcher project continued through John Major’s, and, yes, Tony Blair and Gordon Brown’s governments (Blair was undoubtedly a Thatcherite) any rises in public spending went not into providing better services but in a vast and unwieldly machinery of regulation. Now it matters less whether the public sector does things well. What matters is that they tick the boxes imposed by civil service mandarins. This mentality has led to a proliferation of overpaid administrators in the National Health Service, schools are hamstrung by the rigid constraints of the National Curriculum, the Police spend more time filling in forms than they do investigating crime, and the number of staff employed in university administration has increased at the expense of teaching and learning.

You might say that this is all the fault of New Labour, but I don’t think that’s right; the suffocation of the UK’s public sector began with Thatcher and it began as a direct result of the Winter of Discontent (a re-run of which seems eminently possible). The reason why a succession of right-wing governments have failed to get a grip on public spending is that they’ve all been run by control freaks and have pumped money into wasteful self-serving bureaucracies.

Britain has turned into a version of Golgafrincham, with the “useless third” now in the position of wielding the axe over those few remaining things in the UK which are actually pretty good.

Apparently, Margaret Thatcher is not in very good health and may not live much longer. I won’t mourn her passing. In Thatcher’s time in office, this country took giant steps towards becoming a police state. She encouraged xenophobia and intolerance, and spawned the generation of small-minded money-grabbing lizards who now occupy the Government benches. As Britain turns into a wilderness of cashable things once more, it looks like she might be set for her final victory.


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55 Responses to “Thatcher’s Final Victory?”

  1. […] This post was mentioned on Twitter by Bewildered, Peter Coles. Peter Coles said: Thatcher's Final Victory?: http://wp.me/pko9D-1Yl […]

  2. Bryn Jones Says:

    I agree with a lot that Peter has stated, but would express it rather differently.

    The British economy is in a mess today, with a very large annual budget deficit, and the deficit must be eliminated within the next several years. However, the reason there is a substantial budget deficit is because of the recession that was initiated by the banking crisis. Public spending and taxation levels were planned a few years ago on the assumption that the U.K. economy would continue to grow at a similar rate as it did during the several years up to 2008. The recession means that G.D.P. today is lower by several percent than had been planned for, with a consequent reduction in tax receipts. Unemployment increased in the recession and earnings were reduced: welfare payments have increased. Government spending has increased because of the recession, while tax receipts have decreased. Hence the budget deficit.

    G.D.P. growth is one critically important way to close the deficit. Others are spending cuts and tax increases. The current government seems to be placing most of their emphasis on public spending cuts.

    The Thatcher administrations fundamentally changed the character of the British economy by ending subsidies to inefficient state-owned industries and ending state ownership of much industry and many services. Margaret Thatcher succeeded in her objectives in that respect. She also attempted to reduce public spending, but failed in that: closing inefficient industries in the public sector – and in the private sector through very high interest rates – resulted in massively increased unemployment. The reductions in state subsidies were matched by increases in welfare payments. Some communities were severely affected by the economic decline and the private sector was not able to replace lost industry. Some communities remain blighted to this day. Many individuals suffered the misery of being without work, sometimes for years. There is a danger that mistake will be repeated in a new form by the new government.

    My hunch is that members of the current government genuinely believe that there is considerable waste in public spending and that cutting spending by 25% is possible without damaging basic state functions. Yes, there is waste and inefficiency in many sectors of public activity. However, there are also many parts of the public sector that are efficient, or have even been squeezed financially for years. Imposing cuts of 25% in most areas of government spending will eliminate services that many people depend on. Hundreds of thousands of public servants will be made redundant; many of these will encounter great difficulty in finding new employment. Welfare payments to the people formerly employed out of public money will have to be funded – this includes people currently employed directly by the state, people employed by other organisations dependent on public support (charities, semi-public bodies such as universities, private service providers), and people in private companies dependent on public contracts (such as the construction industry). Consumer spending by many individuals will be reduced.

    I fear that many ministers in the present government do not have any real understanding of how the proposed cuts will affect the general population, or understand the possible negative consequences on the attempt to close the budget deficit (increased welfare payments and suppressing G.D.P. growth). I fear the reductions in spending are going to be so large and so sudden that they cause severe damage to services and to the economy. I hope I am wrong and that the ministers are right. But I lived through Thatcher’s administrations and remember the economic failures as much as, or more than, the successes.

    • Phil Uttley Says:

      Agreed. I understand the need for cuts but I think the fact that they apply a blanket 25% cut without looking in detail at where the waste is and who is already running a tight ship is a pretty silly approach. It’s obvious that science budgets are already pretty efficiently spent thanks to the peer review process and the time-scales of grants. So why they think we can make large savings without real damage is beyond me.

      On top of that, there is another issue here which is rarely spoken of. Of course there is waste, but why is the waste only identified when we need to cut, why weren’t people working out where the waste was before the downturn? Because waste is still the same whether it is waste in a surplus budget or in one which needs to be cut. It is still wasted money which could have been spent more efficiently. Perhaps we need more competent politicians who are always looking into this instead of only thinking about efficiency of spending when times are bad.

    • Bryn Jones Says:

      The point about the crude, unthinking effect of 25% cuts across most government departments is also considered here.

  3. It seems rather strange to try to dump the blame for this at Thatcher’s door.

    Regarding Labour funding, it could be argued that Labour governments simply spent a lot of money that they didn’t actually have and that the headline public debt figures rarely tell the whole story. For example, Healey had to call in the IMF in the 1970’s to help us pay our bills and Brown was adept at hiding massive amounts of off balance sheet debt (eg PFI). Furthermore, the Great STFC Funding Disaster was both pre-banking crash and very much a Gordon Brown (Treasury) initiative.

    Regarding publc services, you were fortunate Peter in that you attended the top private school in the North of England. I went to a sink comprehensive and had to deal every day with teachers who were incompetent and should never have been in the profession. For example, my maths teacher couldn’t integrate a cosine function. That state of affairs had been going on for quite some time. Fortunately, the Thatcher government closed that school down, possibly rescuing the education of a lot of people. I also abhor the bean counter era but I don’t see what went before as being better.

    • telescoper Says:

      Dave

      I’m not saying at all that everything was a bed of roses before Thatcher came in. This country was in dire straits in the late 70s for many reasons, some of them self-inflicted, some of them consequences of external problems, e.g. the oil crisis.

      What I am saying though is that you can trace the start of the growth of runaway bureaucracy to the Thatcher government’s dislike for the public sector (some of which was justified). Moreover, this was actually opposite to the Tory rhetoric which about cutting waste.

      Blair and Brown actually increased public spending but such a huge fraction of the increase went on pen-pushers and paper-shufflers that nobody but them saw any benefit. Their refusal to increase tax (especially for the rich, and especially when the crisis started) marks them out as Thatcherites in my mind. We never would have had Blair if we hadn’t had Thatcher. In that respect at least it is her fault.

      I did go to a private school because I got a state scholarship to go there. My brother went to a comprehensive which was, as you say, awful. It was a Labour government that withdrew the Direct Grant system which supported me at the RGS, in fact. That was just a year after I got in, but the Local Authority decided to continue my scholarship for the duration of my time at school.

      Peter

    • Bryn Jones Says:

      Yes, Gordon Brown does carry a lot of blame for Britain’s current economic problems, but the causes are wider than him alone. When chancellor he ran the economy on the assumption that the economy would continue to grow, believing that he had abolished the “boom and bust cycle”. Private debt did increase enormously. He did not run a significant annual budget surplus in the years of boom.

      However, the main cause of the current large budget deficit is the recession, which was caused by the banking crisis – through the reduced tax incomes as G.D.P. fell and increased welfare payments. We might ask what would have been different had there been a different government in power over the past decade. That government might have increased public spending more slowly during the years of boom, but the recession would still have caused a reduction in tax revenues: there would still have been a sizeable budget deficit. Perhaps with lower spending and lower taxation before the recession, it might be easier (though not easy) for extra taxation now to fill the void. A better regulation of banks and lower debt might have lessened the scale of the banking crisis, and banks might have lent more to business during the recession. The recession might then have been less severe, the decline in G.D.P. and tax revenues less: the budget deficit might today be smaller. However, neither of the two large political parties seemed unduly concerned about the activities of the banks during the period of economic success. Neither party seemed enthusiastic about greater banking regulation. That is perhaps the legacy of Lady Thatcher that Peter wrote about, where unconstrained profits for companies are considered to be a great good, regardless of the danger to the long-term health of the economy.

      I too went to a comprehensive school but the education there was fairly good, thanks to the work of the teachers, the senior school staff and the local authority. I was working for my PhD at University College Cardiff during the later period of Thatcher’s rule: that institution very nearly closed down due to government spending cuts, plus poor financial management. I faced the prospect of failing to complete my PhD because of the collapse of the university.

    • telescoper Says:

      Bryn

      The deregulation of the financial services sector did play a large part in the collapse of the banking sector in 2007. However, it wasn’t the only way in which the current state of affairs can be traced back to the Thatcher years. The obsession with property ownership was stimulated in large measure by the sale of council houses. The consequent shortages of low-cost housing caused houses to inflate to unprecedented levels and drove many people to take out mortgages they couldn’t afford.

      We still have a grossly inflated property market and it seems to me that another crash is waiting in the wings. As unemployment rises steeply – which it surely will – downward pressure on house prices will surely follow, driven by respossessions and another wave of bad debts.

      Peter

    • Bryn Jones Says:

      Peter,

      Yes, that’s right. The recession was caused by the banking crisis of 2007-2009. The banking crisis was caused primarily by bad debts in the United States following the fall in the housing market there. The British housing market hasn’t fallen much … yet at least. House price inflation in Britain was extreme several years ago, something that seemed not to worry Gordon Brown too much at the time, about as much as it worried the Thatcher government in the mid/late 1980s. We’ll have to see how the job losses in the public sector affect British house prices over the next few years.

      Bryn.

    • telescoper Says:

      Bryn

      Insofar as these things can be predicted, which isn’t very far at all, it seems that the effects will be largest in areas where the public sector is a large employer. That includes parts of Wales and areas like the North-East of England.

      Peter

    • Bryn Jones Says:

      Peter,

      Yes. Some parts of the United Kingdom are highly dependent on the public sector because of the local weakness of the private sector. Indeed, government policy from the 1970s was to move public agencies to places with high levels of unemployment, reinforcing the dependency on the public sector. The forthcoming cuts may exacerbate regional disparities, rather like the job losses of the 1970s and 1980s.

      Bryn.

  4. Runaway bureaucracy has been a theme of every European country I’ve ever worked in. I think the Thatcher theme is one of correlation rather than causation here. I agree that the rhetoric of cutting waste rarely matches the reality on the ground. However, this seems to be a universal feature of all governments be they left or right.

    You mention that Blair and Brown refused to increase tax. This is far from the case. Brown simply avoided hitting income tax but taxed just about everything else. The previously decent UK private pension arrangements testify to this. Furthermore, I live in a supposedly high tax country but I was surprised to find that my total tax burden is now comparable to the UK. I agree that Blair and Brown didn’t explicitly hit the rich with higher taxes although I’ve never bought the argument that they should do this. I hate the idea of an unequal society but I’ve yet to be convinced that higher taxes for the rich means more money to help the rest of us. The rich usually find a way to avoid paying or just leave the country. The unequal society bit is best fixed by good education, eg at the level of grammar schools, rather than punitive tax measures.

    I’m surprised at your argument : “We never would have had Blair if we hadn’t had Thatcher. In that respect at least it is her fault.” How about going a step further back ? We never would have had Thatcher had it not been the absolute mess made by Wilson and Callaghan. Therefore its all their fault. One can extend backwards to Heath etc..

    I’m no fan of Thatcher but I shudder to think what state the country would have been in had we instead of her had a decade of Callaghan, Foot and Kinnock instead.

    • telescoper Says:

      Well, it was Heath that took us into the EC….

      Yes, I admit that “indirect” taxation has grown steeply, but that also was started by Thatcher with a shift from income tax onto VAT and other things. However, it was New Labour that abolished the fuel duty escalator with the result that the cost of motoring has gone down in real terms over the last decade while the cost of public transport has spiralled upwards.

      The situation we have now is that very ordinary middle-income families now pay tax at the 40% higher rate (as do I) because the threshold for that level has steadily reduced in real terms. I’d like to see a much more progressive tax system whereby the rich make a greater contribution towards paying off the public debt.

      I’m not sure I agree with your analysis that education is a solution in itself either. We need an economic system that allows people to exploit their knowledge and skills once they have them. I can see a situation coming where we have the most educated unemployed people in the world. Education is a necessary, but not sufficient, factor.

  5. Its not especially relevant that Thatcher started a shift towards indirect taxation. Its also perhaps not entirely correct to blame her for this. I recall a lot of new VAT costs turning up as a consequence of EU dictats. However, even if she fiddled a bit with indirect taxation, the responsibility for increasing the tax burden during the past decade was down to Gordon Brown not to her.

    Regarding education as a driver of social mobility, I wouldn’t be so bold as to put forward an analysis. The issue of fairness in a society is too complex and I know too little here. However, its worth noting that greatest driver of social mobility after the War was probably the grammar school system. A lot of folk, such as our greatest reforming Home Secretary Roy Jenkins, came through to public life that way. One could postulate that a relative absence of grammar schools (or state schools of equivalent calibre) can account in some way for the fact that so many of our top politicians (from the left and right) were privately educated.

  6. telescoper Says:

    I think of education as being a good thing in itself, but I feel many politicians have an ambivalent attitude towards it. On the one hand, there’s the utilitarian argument that the UK economy needs skilled workers but, on the other, there’s the problem that education tends to make people question things – or it does if it’s done properly. If you want to educate people simply to become compliant participants in the materialistic cycle of production and consumption then you had better not educate them too much.

    The problem with the old grammar school system was what happened to the kids who didn’t pass their 11+ examination. They generally went to a Secondary Modern school and were pretty much pigeonholed for life. The idea of the comprehensive system was a good one, in my view, but there’s no denying that in many schools it went badly wrong. Whether that was under-resourcing, bad teaching, or lack of discipline I don’t know.

  7. I don’t think politicians are particularly ambivalent towards education. I suspect that most of them are interested in giving the best education possible to the UK’s kids. They just don’t know how to do it. From my own prejudice, one factor could be that the experience that top politicians and civil servants of education is atypical of the experience Joe Public has. There are probably too many bright young things from private schools and Oxbridge humanities courses making education decisions without any real knowledge of how things are on the ground floor.

    Regarding the grammar system, I agree that failing the 11+ was a humiliating and life-scarring experience for many. However, nothing seems to have succeeded in producing social mobility as the grammar system. Elements of it, eg highly academic schooling for those pupils able to handle it, should be restored.

    I see the comprehensive system as a noble experiment which failed. I don’t have the answers but I think a complete and radical rethink is called for. Were I to make a review of the whole thing, I’d like to investigate teacher competence and work out how to attract the best possible candidates to the profession. When I was a student, teaching was seen as the safe option for those who didn’t get very good degrees and who couldn’t work out what they wanted to do. I worry that too many teachers enter the profession for these reasons.

  8. Anton Garrett Says:

    Gordon Brown is the man who started his chancellorship by stealing a significant proportion of everybody’s pension pots and then sold our gold reserves at the bottom of the market. For that he would have been sacked from any business in the private sector, but instead he ended up running UK PLC. Labour have had three extended runs in office postwar and nearly bankrupted the country by the end of each. There are two separate debates going on here: how much to spend; and what to spend it on. Labour always get the first one wrong. I’m not sure that either party gets the second right. I don’t want to see the Welfare State ended but I do want to see the subversion of it reversed. As far as saving money goes, the ratio of administrators to (doctors + nurses) is 4 times higher in the NHS than in private medicine, which is agreed by both sides of the debate to be better. So let’s give 2/3 of NHS administrators a year’s notice; the NHS is currently Europe’s largest employer. And let’s ensure that the retiring age is the same in private and public sectors, which is a matter of simple fairness.

    Skilled immigrants should be welcomed from anywhere; unskilled ones, if necessary to pay the pensions and late-life healthcare of the baby boom generation, should be drawn from communities that have a culture of conscientious working and which do not disdain integration.

    I regard teacher training colleges as the main source of the disaster in State education. Replace them by an on-the-job mentoring system. It would save money and (more importantly) actually improve quality. In higher education, the grave risk of the present money-follows-the-student system in a time of contraction is that mickey mouse courses that cost little will survive, whereas courses with genuine intellectual rigour that produce people whose expertise will benefit the country will go down. It’s time for government to decide what courses are good for the country and then discriminate financially in their favour in some way.

    Anton

    • telescoper Says:

      Anton,

      On your last point it’s perhaps with saying that the Browne report does specify that the government contribution to HE funding should in future be targetted at strategically important courses (e.g. STEM subjects). It is more than likely that Mickey Mouse studies will in fact soon attract no funding at all from the taxpayer. It also seems to suggest that universities should keep charging the same fee per course, which means that net income for science subjects will be higher than others because they retain the state subsidy. Whether the differential is enough to cope with the difference in cost is another matter.

      It’s also perhaps worth mentioning that over the past 4 years the number of managers employed by UK universities has increased by 30%.

      Peter

    • Anton Garrett Says:

      Yes, a few years ago I had a letter published in a newspaper, taking umbrage at the editor’s approval that one university had a lot more accountants per academic than another (which had just then suffered an isolated screw-up).

    • Skilled immigrants should be welcomed from anywhere; unskilled ones, if necessary to pay the pensions and late-life healthcare of the baby boom generation, should be drawn from communities that have a culture of conscientious working and which do not disdain integration.

      My wife and I both come from non-EU countries and live in the EU. (It is also the case that practically no-one who doesn’t know otherwise (from ourselves or another source) suspects that we are not natives. We have also paid more into society than we have benefited from it, and certainly were never on the dole.) There are legitimate personal reasons for people wanting to live in another country, and in some cases valid political reasons for accepting refugees etc. However, I have never been able to follow the argument that skilled immigrants should be welcomed to make up for the fact that the native population has too few children to sustain pensions, health-care etc. Either such immigrants will integrate successfully, and will have just as few children in the next generation, so one has effectively increased the size of the problem and shifted it to the next generation. (A common objection to not paying off the national debt, by the way. The latter is understood by all; the former, it least in public discourse, is hardly ever mentioned.) If they do not integrate successfully, one has the problems of immigrants who are not integrated. One can’t have one’s cake and eat it too, i.e. immigrants who integrate well into society but continue to have lots of children to make up for the lack of native children. Also, it doesn’t seem to me to be good global politics to attract that “best minds” from other countries—especially developing countries—to work in one’s own country. In the other direction, it is “brain drain” and needs to be combated. The same people who decry the brain drain from their own country often tout a reverse brain drain as a cure for all sorts of problems in society. Even if that is the case in their own country, they are robbing other countries of their own talent. Maybe this is the idea: why pay for expensive schools here? Isn’t it easier/cheaper to let other countries educate people and then hire them away?

      Interestingly, immigration is often supported by people who say that immigrants will do work which natives won’t. While that might be the case, they don’t seem to realise that this will only work if immigrants are somehow different from natives, i.e. not integrated. Demanding that they be well integrated otherwise but should be different enough to occupy a niche to benefit the natives is just one step removed from the slave owner hoping his slaves will be well behaved.

    • Anton Garrett Says:

      Phillip: A country is run for the benefit of its passport holders. Each country has a perfect right to decide who comes and who doesn’t, whether the criterion is skills or anything else. Most skilled people who come to wealthy countries from poor ones send back a fraction of their income to their relatives that greatly helps them, so it’s mostly a win-win situation.
      Anton

    • A country is run for the benefit of its passport holders. Each country has a perfect right to decide who comes and who doesn’t, whether the criterion is skills or anything else.

      Apart from international laws regarding refugees etc which the country has signed, yes, they have the right to run the country for the benefit of the passport holders. That is not the question. The question is whether strategies such as “attract skilled immigrants” are good for the big, global picture (which is there whether one likes it or not) and whether moral arguments (we shouldn’t destabilise other countries) trump legal ones (it’s our country and we’ll do what we want).

      Most skilled people who come to wealthy countries from poor ones send back a fraction of their income to their relatives that greatly helps them, so it’s mostly a win-win situation.

      For their families, yes, there is a benefit. However, that money invested in the country where they work has a bigger effect, so in this sense sending money abroad is not good for future pensions etc. As long as pensions, health care etc rely on young and healthy paying for others, this is most effective when the money these people spend is spent in the country in which they work. Most pension schemes, directly or indirectly, depend on economic growth, which is obviously increased if consumers spend where they work rather than sending it abroad (which does help abroad, of course).

    • Anton Garrett Says:

      Phillip: There are are limits to the extent to which we are responsible for each other. UK and USA were not responsible for Saddam Hussein’s murderous tendencies, but since we took over Iraq we have, unfortunately, gained moral responsibility for running that country and trying to make it better than before. I think we should have left it to the Iraqis to sort out their own backyard, since Saddam was no threat to us, but your logic seems to me to support the invasion.

      There is no such thing as “international law” (however many people use the phrase). A system of law by definition involves a deterrent means of enforcement on people who break it. The phrase is an oxymoron; there are only international treaties.

      Anton

  9. I would like to ask for your evidence (newspaper rants don’t count) for “proliferation of overpaid administrators”… Overpaid compared to whom? The NHS is unlike any organisation I know of. It’s huge, sees huge traffic, provides important-to-vital services using a complex workforce. Even the private health sector is on an incomparably smaller scale. (Don’t take emergencies or critical case for example. But fine if you want to recover from your routine op in a nicer room.)

    I know several of them well and most do a difficult, important and extremely unrewarding job. If anyone in the NHS gets thanked or rewarded it’s the doctors and nurses who see the patients. But managing and organising them, their workloads, their buildings, pay, disputes, equipment, proposed future projects, and etc. while keeping within a reasonable budget and sticking to targets is also essential. You wouldn’t have had that service if someone else hadn’t made sure there were staff available, rooms booked, admin staff fetching notes on time, processes being monitored for problems, complaints dealt with, etc…

    And as we’re about to find out medics aren’t very keen (and often not able) to do a good job of managing these things.

    I see both university and hospital managers/administrators. And I know which lot the country can afford to (“efficiency”) cut.

    • telescoper Says:

      Evidence

    • Anton Garrett Says:

      Well Simon, Peter has proved the “overpaid” part of your query with that graph. As for proliferation, I repeat that the ratio of administrators to (doctors + nurses) is 4 times higher in the NHS than in private medicine. Let me know if you would like a reference for this figure. Nobody here has suggested that doctors should do their own admin – they don’t do that in private practice with 4 times fewer administrators, after all.

      Let me clarify something that might be concerning you. I certainly do not believe that these are useless people. I’m sure that many would be valuable employees in a private-sector company that creates wealth for the country. I know also that if a single NHS administrator fails to show for work in an office then it creates genuine problems for the others – but I do not take that to mean that all their jobs are necessary; rather that the useless system that they work in is highly interdependent. When a system has grown gradually to that excess of administrators, it is time for radical surgery.

    • I call Non sequitur.

      “Peter has proved the “overpaid” part of your query with that graph”
      Where exactly? I see no relevant data on NHS managers or administrators here.

      Chief Execs are not a useful proxy for typical NHS managers. And you must be confusing these because CEs have not “proliferated” in any meaningful sense. There’s one per trust.
      Would you like to post the similar graph comparing University VCs to junior staff? Think this is representative of typical pay in the HE sector? And showing CEs salaries have risen faster than nurses does not prove your point because maybe CEs jobs are getting more demanding that nurses. Nursing roles haven’t changed vastly in the last two decades but the responsibility of a CE jobs has grown as trusts become bigger, more pressured, etc.

      Would you like to show how postdoc/lecturer salaries have risen over a similar time period compared to “private employess”? I haven’t heard you claiming you are overpayed but I think your argument must imply that to be true.

      • telescoper Says:

        Isn’t a Chief Executive involved in the management of an NHS Trust? I know it’s at a high level, but it’s still management. I don’t know what a “typical” manager gets, as that depends on what you mean by “typical”.

        I’m not sure how your question about V-Cs is relevant. I think they’re overpaid too.

        Postdoc and lecturer salaries have grown roughly in line with the “public employees” line on the graph. I note, however, that according to the legend on the figure, a nurse receives higher pay than a PDRA with a PhD and several years research experience. I doubt if you could call either of them overpaid. I am neither a lecturer nor a PDRA (nor indeed a nurse) so I don’t understand your inference that I’m overpaid.

        I think you’re way ahead on the non sequitur count!

    • And for reference a typical NHS “middle manager” has a salary comparable to (possibly slightly less than) a typical HE lecturer. I know from experience which one is more demanding.

      All this is not to say that a massive body such as the NHS is maximally efficient. That is obviously not the case. Of course improvements can be made. But who is to make those improvements and make them work? Dedicated, smart and energetic managers and administrators! Who else is going to analyse a “patient pathway” and spot and reduce the redundancy and delays in the system? And demands from users and technology and knowledge from providers constantly change, so processes need to be constantly monitored and improved. (The price of peace is… etc.)

      BTW: I was responding to Peter comment (graph), which is not a sound or relevant argument. Hence non sequitur. My original question still is unanswered.

      Obviously a CE is involved in management. But so is a VC and without further evidence it is baseless to conjecture that typical HE staff salaries have scaled with averaged VC salaries over the past decade. Maybe they have but is has yet do be shown. Ditto CEs vs. managers in NHS trusts. That’s why I asked for evidence.

      An argument made without evidence can be dismissed without evidence!

      • telescoper Says:

        But I wasn’t arguing that typical HE staff salaries have scaled with average VC salaries. That’s the whole point!

    • Anton Garrett Says:

      “All this is not to say that a massive body such as the NHS is maximally efficient… Of course improvements can be made. But who is to make those improvements and make them work? Dedicated, smart and energetic managers and administrators! Who else is going to analyse a “patient pathway” and spot and reduce the redundancy and delays in the system?”

      Turkeys never vote for Christmas Simon! Have you seen that episode of Yes (Prime?) Minister in which a merger of two departments was proposed by polticians in order to reduce bureaucracy? The bureacrats responded by proposing to insert another tier of bureaucracy to manage the merger.

      As for who will make those improvements: I suggest bringing in some administrators from private hospitals, which are acknowledged by both their political supporters and detractors to be more efficient and have 4 times fewer administrators per doctor/nurse.

      Anton

    • And there we go again….

      Anton: As I have already said the scale of the services and their different nature means that managers/administrators at private hospitals have a far less demanding role, yet similar or better pay, than their NHS counterparts. No, private hospitals are not more efficient in like-for-like services; it’s the opposite. And you don’t get emergency or critical care in the private sector. You don’t have the same clinical governance issues, etc. You might groan – but some of the safety/cleanliness practices I have seen in private hospitals would scare you – because they aren’t monitored and managed in the same way as NHS ones (I have used both systems). Put bluntly: private hospitals are fine for routine procedures, but all the complicated stuff goes straight back to the NHS acute hospitals.

      Peter: Your graph posting was supposed to be evidence for overpaying NHS managers. If this is any kind argument it must be: CEs salaries rose faster than others (e.g. average private employees), therefore so did most NHS managers/administrators. (BTW: they outnumber CEs by 2-3 orders of magnitude – and then the other staff (the ones begin managed) outnumber them by another 2-3 orders of magnitude. Maybe you’re not fully aware of the scale of the organisation!) But the conclusion does not follow from the premise. By the same reasoning I can show VCs salary rose faster than average private, therefore so did postdocs, postdocs are overpaid. Or headmasters salaries rose faster than average, so therefore must have teachers: teachers are overpaid.

      You only made a sound argument by stating “Postdoc and lecturer salaries have grown roughly in line with the “public employees” line on the graph” – this is what is relevant, VCs salary is not. Likewise, typical NHS manager/administrator salary is relevant, CE is not. You don’t prove Y is too high by showing X is higher than Z. (Unless you know the relation between X, Y and Z, in which case show it!)

      Both: you have still not addressed the issue of “overpaid”. Firstly there’s the problem of whether this is even meaningful. To say role A in organisation X is overpaid compared to role B is organisation Y is to reify the value of their roles into a single numerical quantity, and then see which is the larger. Maybe this is not possible. I would argue that such a one dimensional view misses too much, and in fact falls into exactly the money-obsessed (Thatcher again) mindset you started off by arguing against. Even if it is possible in principle you have to match (as much as possible) the role types (A to B) and organisation types (X to Y).

      I know, for example, that typical junior management consultants in the private sector, who perform a similar function to many of the NHS managers I know, get paid far better. Does that mean NHS managers are underpaid, or management consultants are overpaid? (And I am being generous by ignoring the sometimes massive emotional pressure that comes with responsibility in the health service – rarely comparable in private consultancy work.) But these are jobs that can at least be compared – because people do move between them. Ditto people move from NHS management to private health management – less frequently it happens the other way around because you take more work/responsibility for equal or less pay when moving from private to public sector. Again, they can be compared, and again the claim the NHS is overpaying doesn’t fit.

      I am still waiting for some sensible like-for-like comparisons of salary scales, security and overall responsibility of roles in the NHS and private sector.

    • Anton Garrett Says:

      Simon: Certainly NHS and private hospitals differ in that A&E and acute is mainly in the former, but would you explain to me why those specialties require 4 times as many administrators per doctor/nurse?

      Some months ago I put that figure to a friend who is a GP, and he said that the fact the NHS is more into preventative medicine than private medicine accounts for a little of the difference – but FOUR times?? The bureacuracy has never grown according to any master plan, and it is high time to axe it. As for ‘overpaid’, I agree with Peter but am not statted up to his extent, except to say that there is no reason whatsoever why public employees should be able to retire any earlier than private ones.

      Anton

    • telescoper Says:

      Simon

      I’m a bit perplexed. The point of my article was to argue that creeping managerialism has affected many public sector institutions. The question whether VCs or NHS chief executives are the more overpaid hardly makes any difference to this argument. It’s a generic problem.

      From what I know the starting salary for a management trainee in the NHS is about £21,500, typical admin salaries are in the range £30,000 – £40,000, and senior roles go up to £100K (or more of they’re Chief Executives). I can’t comment on how “demanding” such jobs are, but they’re certainly not low in comparison with academic staff in universities (for which you need to have a PhD and many years experience).

      Peter

    • I have no idea what you mean by “administrator”. The salary you give doesn’t tally with admin staff I know. Maybe we just mean different things by this?

    • When you say administrator your are referring to what I (and the NHS job titles) would usually call a manager.

      Peter’s criterion for “overpaid” seems to be “has increased by 100% between 1999 and 2009” and for “not-overpaid” is “has increased by ~40% between 1999 and 2009”. I presume that between these is “slightly overpaid”. (This is of course to ignore the fact the roles may have changed, reduce the whole value of a role down to a single figure, and to then average over a diverse population of roles, which may have changed over the decade. But in the spirit of spherical cows let’s roll with that…)

      I see from your link (the prospects.ac.uk one) that a “band 7” manager starts with ~30 k/a, the value for the start of 2009 was 29.1 k/a. Do you know the 1999 figures for comparison? Or even just the relative change over that period?

      Let me provide some data for your readers.
      You need to know a bit about NHS employment to even find out the numbers, because all NHS salaries have gone through an “agenda for change” process. So “band 7” didn’t exist in 1999. An “assistant service manager” role in 1999 would probably start at the bottom of a “A&C grade 7” in 1999, which maps onto a “band 7” in 2009. A grade 7 starting salary in April 2000 was 22.2 k/a (I cannot find 1999 figures) Exactly decade later (April 2010) the corresponding band 7 salary is (via Peter’s link to prospects.ac.uk) 30.46 k/a. This is a fractional increase of 37.2%.
      By your own criterion that role is “not overpaid”. Of course, the grade-band mapping is not always so simple, but depends on the details of the role, department, etc. (And “bands” now cover a wider range than “grades” did.) Maybe you know some examples of specific NHS managerial roles through the decade we can use as for a benchmarking exercise?

      An astronomy postdoc started at 1 billion. I think you’ll find practically all CEs are overpaid by your criterion, but NHS managers will not be the worst offenders by a long short. Your graph shows “average” public vs. private and show NHS CEs, but the missing data is from “private” CEs (from similar size organisations) to compare this with. Easy to make a point if you cherry pick data.

      In case it’s gone unnoticed I am not putting forward a case for CEs being over/under-paid. Ditto for managers. I just think such generalised statements about an often maligned workforce need to be supported by proper data analysis (which I why in my original comment I warned off using newspapers – horrific sources to use for serious data analysis)

    • Mangled the last few lines:

      A postdoc started at 1 billion.

    • Let’s try one more time…

      A postdoc started at <17k/a in 1999 (as I recall when there) and now starts at 26.4k. This is an increase of 55%, more than your benchmark of 40% for "not being overpaid". I have not heard you claim postdocs are (slightly?) "overpaid".

      The general statement that the NHS is overrun by "overpaid" managers has still not been supported by evidence.

      BTW: Not sure it's useful to compare a health trust CE to a research council CE. Budgets might be comparable but the number of staff they are ultimately responsible for can be vastly different. A big trust might employ 10,000 staff or more. The head of the chain of command is the CE. Not quite so simple for academics, who answer much more directly to their university VC than the research council head. And as you say, in that comparison VCs come off worse than NHS CEs. But it's still not clear NHS CEs are overpaid – compare their salary to that of a CE in a private company with 10,000 employees and a turnover of order 1 billion.

  10. What is going on is that the parlous state of the UK’s finances is being used as a pretext to resume the Thatcherite attack on the welfare state through a campaign of privatisations and closures so that wealthy Tory voters can get richer at the expense of ordinary working people.

    This should be obvious to anyone, but a surprising number of people actually believe that the Tories have some more humane agenda.

    I am also taken aback to the extent that neoliberal rhetoric has been adopted by almost all parties. Cutting taxes, cutting government spending, privatisation have become ends in themselves (not that they were of any value even as means to ends in most cases).

    • Anton Garrett Says:

      Never forget that tax is using the law to take other people’s money and that tax falls hardest on the working poor. It seems to me that you write as if government has a divine right to tax, just as kings once asserted divine right to the throne; but every penny of tax needs justifying. (I’m not saying it can’t be justified in some circumstances.)

      Privatisation is a good way to get rid of the vast surplus of administrators that have accumulated in nationalised concerns. Again, this does not necessarily justify it, but here is an argument in favour deserves to be aired. Also, most of the things for which privatisation has been discussed or enacted were not invented by government (for governments invent nothing) but by the private sector. So the proper question is Why not privatise. Sometimes there is a good answer, but I do not wish to have society’s defaults reset by seeing only the wrong questions raised.

      Anton

    • Note that in many countries the poor (whether working or not) pay no tax (at least no income tax—yes, they pay sales tax (VAT) but that is usually reduced or non-existent for essential stuff and in practice is just part of the price).

      Governments have a right to tax if they were elected by people who want the government to levy taxes to finance public stuff. No mystery divine-right stuff.

      I have yet to experience a privatised former government venture which became better because of privatisation.

  11. Phillip – A striking example of a successful privatisation was British Telecom. Prior to denationalisation getting a line put in was a nightmare, as was ensuring that necessary repairs were carried out. Following privatisation, the standard of service improved immensely. This is hardly surprising since I can’t see what possible expertise civil servants could bring to a company specialising in telecommunications.

    • telescoper Says:

      You could also argue that privatisation just happened at the time that digital technologies arrived and made the whole business of telecommunications a lot easier anyway.

      BT is still crap, by the way, compared to other providers.

  12. That was one hell of a fast introduction of technologies then. The service improved almost immediately after privatisation.

  13. It was mine and a lot of others. It was remarked upon at the time.

  14. I do in fact agree with the general thrust of the post. But that’s of no importance.

    I take issue with the “proliferation of overpaid administrators in the National Health Service”. I have only seen Peter present evidence that CE’s salaries have increased faster since 1999 than average for other workers. I’ve already explained why this does not translate to the vast majority of administrators. Even if it did, it seems to presume that relative pay levels in 1999 were more fair (maybe the situation was the reverse back then). And CEs have not proliferated. And I’ve not seen Anton produce anything more than speculation – presumably based on some long-held belief in the superiority of private sector to streamline even national organisations – that the NHS could cope effectively with 1/4 of its managerial staff. Might be right, but I’d like some evidence to support it.

    In order for me – or for that matter any rational reader – to take the original comment seriously it would need to be supported by evidence that the dreaded proliferating administrators are overpaid by comparison with similar roles in similar services and/or a coherent definition of “overpaid” that can be used for comparing not-so-alike roles and organisations. Overpaid with respect to what exactly? Should we adjust for differing levels of job security, or emotional stress? Is this only a normative rating?

    I am not claiming any organisation has a perfect (or even good) management structure. But I reserve my judgement on specific ones until I understand the evidence. In this case I have some evidence to the contrary – although I admit to having more experience of what happens in large, acute sites rather than e.g. county hospitals, GP surgerys, PCTs or other arms of the NHS.

    As usual with political discussions people from all sides state their positions and then search for evidence to fit it. Very well known effect from psychology. I was expecting Peter’s statements to be more evidence-based.

    And I object to the generalisation in the original statement. I expect you would be annoyed to see someone claim all academic roles are pointless or overpaid because you think surfing studies is not a serious subject.

    • telescoper Says:

      One can’t make an effective comparison of things like “stress” because they depend on both the job and the person doing it; different people react to the same environment with different levels of stress. I’m sure successful medical professionals find ways of coping with things that most of us couldn’t, such as the proximity to suffering of other people. I used to work for a charity involved in related things but had to give it up because I found it so difficult experiencing death and terminal illness at close hand. I’d say that if you are in a job you find that stressful, money isn’t going to help much anyway. You’re in the wrong job.

      One (inadequate) way to look at Executive pay is to normalise it to the size of the organization. The Chief Executive of STFC gets a salary around £130K p.a. for running an organisation with a budget around £500M p.a. Looking at readily available data for NHS trust CEs I see the ratio of salary to budget as being variable, but rather higher.

      http://society.guardian.co.uk/salarysurvey/table/0,,1043974,00.html

      By this criterion, I suspect university VCs will be even more overpaid than NHS CEOs!

      However, what I really by “overpaid” is that by comparison with the people who actually deliver what the organization is supposed to do, i.e. doctors and nurses in the NHS, and academics in universities. I can’t speak for the NHS, but my experience in the university sector is that many admin staff have an exalted view of their status that’s wholly at odds with their actual utility.

    • Anton Garrett Says:

      @Simon: you put a lot of questions but haven’t yet answered mine to you above: NHS and private hospitals differ in that A&E and acute is mainly in the former, but would you explain to me why those specialties require 4 times as many administrators per doctor/nurse?

    • Anton: firstly, no I am not interested in explaining to you the vast differences in scale and quality of managerial roles in the NHS vs. private hospitals. As you are supporting Peter’s statement then presumably you already know all about this.

      But to give you a hint about the differences consider that the NHS also includes NHS Direct (found it useful myself in several scrapes), urgent treatment and walk-in centres, emergency care, ambulance services, NICE (world leader in its field). It pays for (and so manages payments, patient numbers etc) dental, GP and optical surgeries (these are mostly private contacted by the NHS), provides a very useful internet service (ever used “Behind the Headlines”? It’s brilliant and unique), invests a great deal in preventative care – from quitting smoking to TV adverts about diet and exercise. And vastly more, more varied and quantitatively different types of services than anything in the private sector. Also, when you go private your insurance company handles the money exchange between them and the service provider, when you use the NHS the whole thing is done within the NHS (pay between services follows patients from DOH through PCTs to hospitals, departments etc.) So when you even compare routine hospital treatment between NHS and private you really need to include all the admin, managerial and clerical staff in your insurance company to make the comparison less unfair. In short, the NHS does massively more than pay for the doctors and nurses in the ward while you have a routine op (which is pretty much all private places do). All the other stuff needs staff (some clinical, some technical, clerical, admin etc.), processes, accounting, etc., and then the teams and their leaders need managing.

      Furthermore, the doctor/manager ratio is less important than you might think – but all too easy for a newspaper editor to work to his own agenda. How about considering the number of patients seen per day to the number of managers? then account for the fact that the NHS deals with the complicated/urgent cases the private places don’t. And has to conform to government guidelines that are different from private. A single statistic is pretty useless as a diagnostic of a massive multi-dimensional problem. NHS services in acute trusts see vastly more patients more efficiently than in the private sector where you pay for extra time with a consultant. As a result a private clinic has a higher doctor/patient ratio. Is there a clinical need? No. But that’s what the customer wants and pays for, so that’s what they get (nothing wrong with that if they have the money to pay for it). For a similar clinic or day list there will be more doctors for the same clinical need/number (in private vs. NHS), and a similarly higher doctor/manager ratio (or lower manager/doctor ratio). You see how misleading it is to play around with a single figure as if it “means” something important about a complex situation.

    • Anton Garrett Says:

      Simon: Regarding your last comment that a single figure is simplistic, there is no option but to boil it down to a single figure when you are deciding how much money to put into the NHS or how many people to hire or fire. Readers of this blog may also not entirely appreciate being informed that it is not ‘rational’ to take the side opposing yours.

      I learned from my GP friend that preventative medicine takes a bit more admin than other aspects, but he did not regard that as any excuse for the 4x figure which I have freely quoted. Let me state where and how I get that figure. It is not from a newspaper editor but from the consultant oncologist Maurice Slevin, who a decade ago looked at the London NHS Trust for which he worked. He found that there were 269,080 managers, administrators and support staff compared to 266,170 nurses. Surprised, he wondered if he was being unfair, so he subtracted from the management numbers those he regarded as not really management: doctors’ secretaries, maintenance workers and ambulancemen. Even then there were still 8 managers plus ‘support staff’ for every 10 nurses. He regarded that as an underestimate because many nurses do a considerable proportion of managerial work. He then looked at a representative private hospital and found that it had 240 nurses and 43 managers + administrators + support staff. The disparity in the ratios is 4. Between 1995 and 2001 the number of nurses employed by the Trust increased by 7.8% and the number of managers by 24%. The number of senior managers rose by 48%.

      I suggest retraining those excess managers as hospital cleaners. Then the NHS might start to improve.

      Anton

    • Clearly you know best. Good luck with that.

  15. telescoper Says:

    Enough. Let’s move on.

  16. […] of rocking the boat, and a realistic perspective of the debt crisis; see also an old post of mine here that uses the same figure to make a similar point .. As you may have heard, the University of […]

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