Labour's war on waste is welcome, but can go further
When Rachel Reeves stands at the despatch box to deliver her spring statement on Wednesday, she might begin with a parable: the prodigal daughter. Last autumn the Chancellor raised taxes by a crippling £40 billion, largely to spend on public sector wage rises. The economy has been reeling ever since, with rising debt and next to no growth.
Now Ms Reeves, chastened by experience, will return to the Commons with a package of spending cuts to bring bureaucracy back under control. The new target is to cut Whitehall pen-pushing by 15 per cent over five years.
Gone is the cockiness of the rising star of a socialist government elected by a landslide. Instead, the public expects to see a wiser, humbler custodian of our finances, setting her own house in order rather than lecturing and hectoring the nation.
To that end, Ms Reeves will delegate the efficiency drive to the Prime Minister's close ally Pat McFadden. The Cabinet Office minister will expect most departments to deliver at least 10 per cent savings by 2028-29, increasing to 15pc by 2030, delivering savings of at least £2.2 billion a year.
Many readers will groan at the news of yet another 'war on waste'. Didn't Jeremy Hunt promise to freeze the size of the Civil Service just two years ago? And yet it kept on growing: the mandarin-count is now well over half a million, more than at any time since Gordon Brown was in office.
Yet Ms Reeves deserves some credit for her aspirations, if not her achievements. Her colleague Liz Kendall has already announced significant economies in the ballooning welfare budget, braving brickbats from the Left. Foreign aid is being slashed. The imperative of an emergency transfusion for Britain's anaemic Armed Forces has evidently concentrated minds in Downing Street.
The Chancellor must, however, beware of tried and tested tactics whereby the bureaucratic mind preserves its power while seeming to reduce headline figures. Civil servants may be replaced by 'consultants', who are just as expensive and not infrequently former mandarins. Those who serve the public are made redundant before those who serve only themselves. Its amoeba-like ability to absorb 'cuts' explains why the state is so resistant to reform. Whitehall is not nicknamed 'the Blob' for nothing.
In order to help the Chancellor restore the public finances, Mr McFadden will not only work closely with her, but also with Morgan McSweeney, Sir Keir's Chief of Staff. Mr McSweeney is close to the 'Blue Labour' faction which is highly critical of the top-down approach of previous Labour leaders. He has persuaded the Prime Minister that taking an axe to parts of Britain's bloated state is actually popular with ordinary taxpayers. Hitherto Ms Reeves has favoured managerialist rather than populist policies. That now looks like a luxury our prodigal Chancellor can no longer afford.
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