51p per person per year vs 1000+ nurses

Paul Waugh from Politics Home has just tweeted the following:

Osborne says Royals cost us 51p per person per year.

I have no doubt that George Osborne's figures are accurate for the direct cost of the Royals*.

But isn't it interesting how when Osborne is talking about something that he wants to spend money on (and you can't get much more Royalist than true blue Tories like our beloved Chancellor) it's presented in a way that tries to make it look miniscule? Almost as if it would be churlish to disagree that the Royals are worth every darn penny and anyway it's less than the cost of a mars bar don't you know and didn't she look radiant on the wedding day and sure the Duke occasionally says the wrong thing but he's been such a good consort for her etc. etc. etc.?

For example, I don't remember the (made up) figures for the cost of switching to AV being presented by the Chancellor in the format of cost per person per year (the real figures for this would have been less than 51p per person per year). Oh no, it was how many sick babies will suffer and how many soldiers will (implicitly) die because of lack of the millions that were supposedly going to be spent.

What what does this figure of 51p per person per year actually mean? Well the figures have just been released for the UK population last year. It was 62,262,000 (see here). I am assuming he is using the most up to date figures so this would be a total of £31,753,620. Or if you want to look at it another way, and a way that politicians like Osborne usually love to do it is approximately 6 new primary schools every year at a cost of just over £5m per school (source).

But the currency politicians simply adore using regarding public spending is nurses. How many extra nurses could we employ each year for the cost of the Royal family? Well according to salarytrack.co.uk the current average salary for a nurse in the UK is £26,123 per year. Let's add on 13.8% for employers' NI and that gives us a total salary cost of £29,728. So we could get around 1068 extra nurses each year. Imagine how many more lives each year could be saved and how much more comfort and care could be provided for that amount of money.

Suddenly that 51p per person per year seems a lot bigger doesn't it?

I know what I would rather spend the money on.

*I say "direct cost" because this does not include the cost of things like security and civic receptions etc. It's hard to know what the total cost is but I have seen estimates previously (e.g. here) of around £100m. So maybe the real cost is more like 3000 nurses.

UPDATE: Millennium Dome in the comments has correctly highlighted the following which I thought was worthy of putting the main post:

I agree with you, but actually I'd say you can get even more nurses for your Royal Family buck!

You've ADDED the employers NI cost - and fair enough that IS a cost to the Dept. of Health... but not to government spending overall because the Treasury, obviously, gets that money back. The actual cost to the exchequer of a nurse (or ANY public sector worker) is their salary NET of tax, so in the case of a nurse on £26,123 that's c£20,150 net of tax and NI.

So I reckon the government could afford 1575 extra nurses a year for £31,753,620 :)

A cut a day...

Although (as I have blogged about before) I think that the broad thrust of the direction the government is moving in in terms of adjusting the public finances is the right one I have to say that they could be a bit smarter about how they release the information.

It continues to come out in dribs and drabs. There was Danny Alexander's statement about cuts a couple of weeks ago. Then the budget. Then another statement from Danny. And in between and since there have been other announcements about cuts.

It plays into this idea that the government keeps deciding to cut even more on an ongoing basis. I do not think this is what is happening, I think the strategy has been set from the start but the perception on the ground will just hear the continual announcements and it will feel like it is never ending.

Surely a better strategy would be to just release all the news about cuts in one go (or as few goes as possible, certainly fewer than we have seen)?

Of course all of the cuts will be debated, that is right and proper but they will not necessarily lead the headlines every other day and the government can then hopefully get some coverage for some of the other things it is doing.

Labour lack credibility on public spending cuts

One of the things that I keep coming back to when I hear Labour politicians talking about cuts is the fact that Labour very deliberately did not have a public spending review earlier this year. This meant that they did not have to spell out exactly what spending cuts they would implement over the next few years.

Whilst this may have been good for short term political reasons it is surely bad in the longer term. It means that a party that until 6 weeks ago was in government now already looks like an opportunistic opposition howling about the cuts being implemented by the government whilst simultaneously not offering a credible alternative to what they would have done. They can claim that they would not have cut at all at first but that only applies for the next few months. Beyond that time-frame they need to have a coherent message and I am not seeing it at the moment. Meanwhile the government is making all the running.

Of course they are hobbled by the fact that they are in the middle of an increasingly bitter (but absolutely necessary) leadership contest and hence there is not one clear line that they should be pursuing. But if they had had the public spending review that they should have had earlier this year then at least they would be able to say with some authority what they would (and wouldn't) have done. Even some of the leadership candidates are now saying they should have had the review. Too late now I'm afraid.

As it is it is starting to look like the coalition is taking the necessary decisions to get things back on track whilst Labour politicians carp from the sidelines.

Yet again, short term political tactics from Gordon Brown have had longer term consequences that are very damaging for his party.

Riddle me this... public spending cuts

In all the debate there has been about public spending and the cuts that it is now apparent will be necessary to get a grip on borrowing something has been bugging me.

I co-own and co-run a business. Through this I also know lots of other people who run businesses. I know that throughout industry companies have been needing to cut costs and often one of the largest outgoings is the salary bill. Now traditionally the way to cut the salary bill is to make people redundant, however from what I can tell many companies have been trying to be a bit smarter about this and instead in some cases have been asking staff to take salary cuts and/or reduce the number of hours they work. Often the directors will lead the way in this reducing their own salaries when times are tough.

By doing this, companies can often reduce their outgoings quite substantially. Of course it is far from ideal for employees to have a reduction in their salaries but in my view it is better than redundancies and once the economy improves I would expect these companies to put the salaries back up to where they were previously again.

In fact it makes sense from the perspective of the company as well. Making people redundant is expensive and time-consuming. Companies that go down this path may live to regret it in a year or two when they suddenly find they have a shortage of staff and then have to start recruiting again (also not cheap) when they have only recently made staff redundant.

The thing that had perplexed me in all of this is that this sort of sensible, pragmatic attitude seems to be almost absent from the debate about public spending. Anatole Kaletsky has a piece in The Times today where he argues pretty much what I have been thinking for a while. This section leapt out at me:

According to the Institute for Fiscal Studies, the “eye-watering” squeeze needed to bring Britain’s public finances back into reasonable balance translates into a reduction of 8.6 per cent in departmental budgets spread over three years. If the directors of any private company sent their line managers an instruction to reduce costs by that amount over three years, with no loss of customer service or output, this would not be considered an insuperable challenge, still less a managerial nightmare.

I suspect one of the main things managers in this situation would consider is pay freezes/moderate reductions and would do their best not to lose staff.

Why can't this approach be taken in the public services? Why do any mooted cuts always end up being translated into "X THOUSAND TEACHERS!" or "Y THOUSAND NURSES!" by political opponents?

I am not saying there won't be problems trying to do this, of course there will as there are in the private sector but they are not insurmountable. In my view the highest earners in the public sector should be asked to contribute the most. Weren't doctors for example given a ridiculously good deal a few years ago? Well surely now that times are tough their pay deal could be revisited. The same could be applied across other areas too.

I would suggest that a limit should be pinpointed though and below this no salary freeze/cut should apply. I certainly would not want to see those lower paid public sector workers having to contribute.

An approach like this could save several percent of public spending I am certain and once it has been implemented we may well find that few further measures are needed to get our spending back on track.

W(h)ither democracy?

There is an interesting vignette of what is wrong with our political system in one of The Times leader articles today on public spending:

Labour will not grasp this nettle, having failed to tackle the pension apartheid between the public and private sectors for fear of upsetting the unions. There is a hint, though, that the Conservatives may be preparing to do so. Although the party has not yet published any detailed proposals, and may not do so this side of the election, it is letting it be known that this is an area where it is ready to take action.

So on one of the biggest issues facing us, the Conservatives "may not" publish detailed proposals this side of an election. In which case how the hell are people supposed to make up their minds whether to vote for them, and what sort of mandate will they have even if they win power? And one of the largest circulation newspapers in the country just mentions this in passing in a leader article. Rather than being cause for outrage and insisting they must spell out their plans it's just accepted with a nudge and wink in the lobby that the detail may wait until after the election. In other words, we the public don't get any say.

No wonder people are disillusioned with politics.

Can we be sensible about the 137,000 NHS jobs report?

A big story is breaking right now. Paul Waugh has the initial details. Apparently the government has commissioned "blue skies" reports on how to cut costs and one on the NHS from McKinsey and Co has leaked.

Already there are accusations flying around and the government seems to be trying to spin that the report's author worked as an adviser for the Tories. Conservative HQ is denying it. Guido has done one of his +++++++++++++++++ blog posts on the story and has indicated there will be more later.

Now I don't know what is going to come out about this but it has all the makings of a one of these febrile political situations that is going to get blown up out of all proportion with both Labour and the Tories terrified of being associated with "MASSIVE NHS SPENDING CUTS".

Can I just make a plea for everyone to be sensible? Surely we want the government to commission reports like this to see what can be achieved? It doesn't necessarily mean all those jobs will go but we have to start identifying where public spending can be cut. It has to happen otherwise we will be in dire economic straits in the near future.

I await the details with interest but I expect I will be grateful that they are trying to be sensible about budget planning for the future even if I am still irked at Gordon Brown for trying to pretend spending reductions are unneccessary. I hope he will not be trying that one on any more.

I would be more worried if the government just buried its head in the sand and did absolutely nothing.

Gordon Brown's tactics are catching up with him

I knew this would happen.

The consequences of Gordon Brown's pig-headed insistence on trying to draw ridiculous and unbelieveable lines between him and his political opponents (i.e. Labour "investment" vs Tory "cuts") is catching up with him.

It has come out today that there is now a potential backbench rebellion from Labour MPs on Brown's plans to end a policy which allows benefit claimants to keep the difference if they can find a lower rent than the housing allowance level. The government think this will save about £150 million per year. Frankly I think this is misguided as the incentive on claimants to haggle will be removed and much of this "saving" will go into the pockets of landlords.

However, that isn't really my point. What is now starting to happen is that reality is catching up with the government. It is clear that spending needs to be reigned in but because of Brown's TORY CUTZ!!11 narrative they cannot just be straight with us. Instead, Treasury officials have been scrabbling around in the background trying to come up with wheezes to shave a bit off here and bit off there in the hope that it will all add up to enough to make a difference to overall spending but without people noticing.

This strategy is doomed to failure. Those who lose out will notice and will shout loudly. This will be the first of multiple stories like this with MPs threatening to rebell as they desperately try to hold onto their seats.

The other point here is that because there is no clearly defined strategy to this, and it will be mainly focused on what the government thinks it can get away with, the cuts implemented willnot necessarily be just. There may be more deserving targets for cuts which could be more high profile but because Brown is trying to pretend it is not happening they can't be touched.

There doesn't seem to me to be much evidence of his much vaunted "moral compass" in this latest revelation.

What does Gordon Brown think he sounds like?

Having seen and read the reports and highlights from today's PMQs and read a fair few blog posts about it, I just wonder what Gordon Brown think he sounds like when he relentlessly drivels on about Tory cuts vs Labour investment insisting that Labour will increase spending in real terms in the next few years.

It is so manifestly untrue that Tom Bradby ITV's political editor as good as said so on the report tonight. I am sure a few years ago that political editors did not feel that they could basically state that the Prime Minister of the day was a liar but it seems par for the course these days because it is true.

This recent Politics Home opinion poll shows that Labour is the least believed of the 3 major parties on spending on frankly I am not surprised.

I just wonder what he thinks he sounds like because to me it seems mendacious and politically tone deaf.