The Week 26 January 2024
Policy Director
With 2024 in full swing, and plenty of plotting in Westminster, this week has been a big one in Whitehall. Both Government and Opposition set out their visions for civil service reform at the Institute for Government’s annual conference on Tuesday.
John Glen MP, Paymaster General and Minister for the Cabinet Office, spoke about the legacy of his predecessors and his vision for civil service reform, echoing many of the themes of our paper from last year on ‘An efficiency mindset’. If Whitehall is to encourage productivity and efficiency across public services in an age of tight public finances, then it will need to adopt those lessons itself.
Karin Smyth, Shadow Minister of Health talked about the increase in fragility of our public services, and declining productivity in the health system despite additional investment. Reform’s 12th annual ‘State of the State’ report, published this week, identified NHS waiting lists as a key public priority for improvement (72% respondents) along with the cost of living (77%), but also found pessimism that it will probably get worse (59%) over the next few years.
They aren’t wrong to be pessimistic. DHSC’s accounts (published this week) make for sober reading. The Comptroller and Auditor General of the National Audit Office has qualified his opinion of the accounts, in part based on over £1 billion of Elective Recovery Funding which should have been returned to the Treasury when ICSs didn’t meet their backlog targets, but instead wasn’t - highly irregular for government accounting. If the basics are being missed, how can we expect to tackle a historic backlog and productivity crisis?
This week also saw intervention from Richard Hughes, head of the OBR, who told the Lords’ economic affairs committee that the government’s assumptions underlying the OBR’s forecasts were questionable (and that calling them a “work of fiction” would be generous). In large part this is because of the implied pressure on departmental spending plans, in order to achieve the Chancellor’s target to get the debt to GDP ratio falling in seven years time. As the public sector struggles with backlogs and stagnating productivity, assuming we can significantly reduce future spending is definitely bold.
What we’ve been reading
This week we’ve been reading the IFS’ latest report on fiscal and economic trade-offs, highlighting the problems that weak growth an a high debt-to-GDP ratio pose for the next government. With limited levers to raise more revenue, it’s likely that future public investment will be constrained, tax cuts will be hard to sustain, and public service spending trade-offs will become harder.
Moving away from the challenges of public finances, we’ve been reading Civitas’ analysis of the State of Childminding in Britain. The childcare market clearly has many structural flaws, contributing to high costs for families, lower labour market participation for parents, and demographic stagnation. The role that childminder numbers play in this, and the underlying causes, are worth a read! And given the government’s ambitions to increase funding lack concrete proposals to increase the workforce, they seem unlikely to be credible?