From the TUC

The IoD/TPA cuts package

13 Sep 2009, by in Economics, Politics, Public services, Society & Welfare

The Institute of Directors was always the most Thatcherite of the employer organisations when there was a Conservative government. Under Sir George Cox in particular they tried to lose this image, particularly after Ruth Lea left.

But their new alliance with the TaxPayers’ Alliance, from whom they have recruited staff, suggests that they now want to perform the same role under a future Conservative government too.

Their new report on public expenditure cuts has received considerable publicity. Progressives should welcome it as it makes clear that you can’t achieve a reduction in public spending without making painful cuts and sacking people.  It’s not a painless programme of efficiency savings.

Of course some items are more objectionable than others – and some, such as ending ID cards, have wide support. But as you can see from the full list below – many would be pretty painful. 


Item

Item description

Annual saving, £m
       
 
Tackling areas of spending that are not performing

Reducing items of spending that don’t work
 
£5,477

1

Abolish the Bus Service Operators’ Grant

£451
 

2

Abolish Sure Start

£1,456
 

3

Abolish Building Schools for the Future

£2,300
 

4

Abolish the Education Maintenance Allowance

£530
 

5

Halt further orders and upgrades for the Eurofighter

£740
 
       
 
Curbing over-extended government

Stopping government doing things it shouldn’t be doing
 
£1,595

6

Halve the government advertising and publicity budget

£270
 

7

Abolish Contact Point, the children’s database

£44
 

8

Abolish the NHS National Programme for IT (NPfIT)

£1,181
 

9

Abolish identity cards

£55
 

10

Abandon plans to extend the compulsory school leaving age to 18

£45
 
       
 
Cutting out the middle-man

Reducing agencies and people that get in the way of the frontline
 
£6,928

11

Halve public sector spending on consultants

£1,100
 

12

Reduce non-frontline staff in health and schools by 10 per cent

£921
 

13

Reduce the size of the civil service by 10 per cent

£1,233
 

14

Scale down ‘Local Education Authorities’ (LEAs) in England

£599
 

15

Slim down the Department for Communities and Local Government (DCLG)

£1,317
 

16

Rationalise the framework of regional government and business support

£940
 

17

Begin a thorough rationalisation of taxpayer funded quangos and public bodies, including total abolitions, funding reallocations and budget cuts

£818
 
       
 
Tackling specific budgets

Taking a more blanket approach on specific budgets
 
£6,491

18

Cut 25 per cent from the budget of the Department for Culture, Media and Sport (DCMS)

£725
 

19

One year freeze of the resource and capital budgets of the Department for International Development

£862
 

20

One year freeze of the Home Office resource and capital budgets

£360
 

21

One year freeze of the grants from the Department for Communities and Local Government to local and regional governments

£687
 

22

Cut 10 per cent from the budgets of non-ministerial departments, except for UK Trade and Investment and the UK Statistics Authority

£1,700
 

23

One year freeze of the grants given to Scotland, Northern Ireland and Wales (current spending only)

£1,400
 

24

Simplify and rationalise the skills system and the plethora of skills programmes

£757
 
       
 
Tackling above-inflation indexing

Increasing payments in line with inflation, but no more
 
£1,441

25

One year freeze of the Basic State Pension and the Minimum Income Guarantee

£1,441
 
       
 
Restraining public sector pay and perks

Recognising that the public sector has had a good deal recently
 
£8,711

26

One year pay freeze across the public sector, excluding members of the armed forces serving in conflict zones

£6,203
 

27

Increase employee contributions to all unfunded public sector pension schemes by a third

£2,508
 
       
 
Cutting middle-class welfare

Stopping paying benefits to people who don’t need them
 
£11,999

28

Abolish Child Benefit and the Child Trust Fund, and increase the Child Element of the Child Tax Credit to address child poverty concerns

£8,447
 

29

Taper away the Family Element of the Child Tax Credit at 39 per cent immediately upon exhaustion of the Child Element of the Child Tax Credit

£1,350
 

30

Target spending on free bus passes for the elderly and disabled on those who genuinely need it

£438
 

31

Abolish free TV licences

£564
 

32

Abolish interest subsidy to student loans

£1,200
 
       
 
Total annual saving from 2010-11 onwards
 
£42,642
       
 
Further emergency possibilities after 2010

If fiscal conditions were so bad as to require emergency savings
 
£7,421

33

A further one year pay freeze across the public sector, excluding members of the armed forces serving in conflict zones

£6,203
 

34

Reduce gross annual pay by 5 per cent for the richest 10 per cent in the public sector

£1,218
 
       
 
Total potential annual saving from 2011-12 onwards
 
£50,063

4 Responses to The IoD/TPA cuts package

  1. Jonathan Green
    Sep 14th 2009, 9:50 am

    Nigel,

    Is the TUC checking the accuracy of some of these proposals from TPA and IoD? The report seems to be divided between a populist right-wing wish list of cuts in the quangocracy and some fairly wide of the mark guesstimates of potential savings from public sector cuts. For example the report uses a baseline figure for the civil service of 515,000; this is misleading because there has been a substantial growth in the proportion of part-time civil servants in the last decade. The baseline figure for the civil service is actually 482,910 full-time equivalents 6.2% lower than the report suggests. This error carries forward into the proposals around the pay freeze and reductions in pension contributions. There also appears to be some double counting, not only does the report propose indiscriminate cuts of civil servants they also want to reduce the budgets of non-ministerial departments by 10%. I am sure that there are similar errors throughout the report. Clearly we would not accept many of these proposals and our members, who have been subject to Gershon ‘efficiency savings’ and pay restraint for the last 5 years, would not recognise the caricature of the public sector portrayed in this report. But it does seem fair game to challenge the shoddy calculations that underpin it. Put simply it does not add up.

    Jonathan (Prospect)

  2. Alex
    Sep 14th 2009, 12:25 pm

    “Halting further orders” for the Eurofighter would involve paying for them at list price under the penalty clause in the contracts with Eurofighter GmbH and the other national governments. I don’t know what they mean by “upgrades”, but the only way in which Eurofighter “doesn’t work” is the repeated complaint that we don’t need more air defence fighters. The upgrade (to qualify various air to ground weapons on the aircraft) addresses this.

    Also, is it therefore their policy to run on the Tornado fleet instead, for how long, and how much will it cost in their view to a) maintain, b) life-extend, and c) keep their avionics and weapons systems current? The RAF has a lot of experience with the incredible cost of looking after old aircraft. Quite soon, there will be very few Tornado operators in the world, and they’ve already been out of production for years.

  3. Alex
    Sep 14th 2009, 5:42 pm

    “Halting further orders” for the Eurofighter would involve paying for them at list price under the penalty clause in the contracts with Eurofighter GmbH and the other national governments. I don’t know what they mean by “upgrades”, but the only way in which Eurofighter “doesn’t work” is the repeated complaint that we don’t need more air defence fighters. The upgrade (to qualify various air to ground weapons on the aircraft) addresses this.

    Also, is it therefore their policy to run on the Tornado fleet instead, for how long, and how much will it cost in their view to a) maintain, b) life-extend, and c) keep their avionics and weapons systems current? The RAF has a lot of experience with the incredible cost of looking after old aircraft. Quite soon, there will be very few Tornado operators in the world, and they’ve already been out of production for years.
    OH! You’re my new favorite blogger fyi

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