Policy Exchange has dug out some remarkable statistics in looking at how public services have developed in recent years. It is a story of the 'producer interest' writ large. Public services have a greater tendency than companies to indulge the producer interest. Companies have to compete to survive to indulge its servants. Public services do not.
It is embarrassing to sack someone for being no good at his or her job. You avoid it if you can. If there is a desperate need for an organisation to perform well to survive and remaining profitable, the bullet is bitten. People are sacked. But in the public service, there is no such driving imperative. So incompetent or lazy people keep their jobs. The 'producers' don't suffer. The consumers and those who pay for the service suffer instead.
Here are some of the figures which back up this argument:
Over the last decade the redundancy rate in manufacturing or construction has been seven times higher than in the public sector, roughly defined. During the recession these multiples increased to 16 and 10 times respectively. In a large survey of 60 different public sector organizations coordinated by the Cabinet Office, just 13% of employees disagreed with the statement that their organisation “is too lenient with people who perform poorly here.” The Civil Service is the most extreme example of this. Less than 1% of civil servants take voluntary redundancy each year, and compulsory redundancies are even rarer, affecting less than 0.00007% of the workforce a year. Job security can be seen as a benefit for the individual worker, which might be worth a certain amount of salary.
There are many other bits of remarkable information on the pay of managers and so on in the Policy Exchange report.
This is the press release.
This is the entry point to the full report.
Posted by James Bartholomew • Indexed in Waste in public services
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Most public sector workers have to deal with people and that is why it is so difficult to measure their economic productivity. Some things simply cannot be quantified,
Posted by: rielouise at June 19, 2010 08:46 PM
I now work in local government communications after many years working in the private sector (newspapers). I have seen both sides of the coin.
I am shocked at how low productivity is in local govenment. My output is about 35% of what it used to be - and you are seen to be rocking the boat if you want to do more.
Indeed, bureaucratic behaviour is rewarded as the more 'strategies' you produce - and they all gather dust on the shelf - the more you get paid.
There is endless emphasis on 'collaboration' - that is, setting up 'football teams' of people to do even the simplest piece of work.
I recently edited a council newspaper. In newspapers, the first story produced is used. Right first time. In the council paper, a story was produced and then circulated to the whole football team of people and rewritten and rewritten and rewritten again. Every time it was sub-edited it had to circulated again to the 'football team'. Ah well, it's only tax-payers' money!
Anyone still not convinced? Consider a headline I wrote for another council newspaper I was editing. The story was about anti-social behaviour. The headline referred to 'hooligans'. The paper was printed. A senior director said the headline countered the 'positive images of young people' policy and got other bosses together to demand that the paper be recalled, pulped and reprinted at a cost of £62,000.
Posted by: Neil at June 20, 2010 12:21 PM
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If the state could do what it does at half the cost, would it spend only half what it does, or would it take over even more of our lives?
To the extent that "public services" serve political and sectional interests and reduce individual choice, it may be a benefit that they are inefficient. Inefficiency is a limiting factor, and a reason in itself to reduce the scope of the state's activities.
Posted by: Tim Skinner at June 19, 2010 12:12 PM