Oct 30 2009
Straws in the wind on public spending
This week two of the higher profile parts of the public sector have been forced to accept that public sector costs have to come down. MPs will doubtless endorse that their expenses scheme needs to be much less generous in the future than in the past. If the leaks are anywhere near accurate, there will be good savings for the taxpayer under the new regime.
BBC top management, operating in a more rarified environment on pay and rations with 27 senior managers paid more than the PM, have also announced substantial cuts in executive costs. They have chosen to do their slimming down primarily by cutting numbers over the next three and a half years, reducing top executive costs by 18% through having fewer of them. An additional 7% saving will come from pay and other reductions.
What was interesting was the public reaction. Far from a grateful public thanking the BBC for listening and proposing a quite significant cut – at last – in the high costs of management, many are asking why the BBC needs to pay of its top executives more than the PM on his salary below £200,000.
For the point is this. The BBC is constantly reminding us that it is not a commercial organisation. Its people are motivated by a strong belief in public service. They are brought up in the ethos of public service broadcasting. It is a different pressure and a different motivation from for profit broadcasting , which has to chase audience and revenue to stay alive and to pay big bonuses when it works. It is paid for out of the forced levies on anyone with a TV, not out of the freely chosen spending of advertisers of subscription members. Now the issue of public reward is squarely on the agenda, the BBC like the rest of the public sector is vulnerable when it comes to explaining reward at or near the top.
For those of you who will want to ask, what am I doing to control public sector costs, I say this. In 20067/8 I was the 19th cheapest MP on total expenses for offices and personal Parliamentary expenses. Before the media interest in all this I announced I would cut my total costs by 10% in 2008/9 and by another 10% in 2009/10. I have just seen the half year unaudited figures for costs for 2009/10 and am pleased to see I will come in for the full year well below the target I set.
16 Responses to “Straws in the wind on public spending”
John Redwood has been the Member of Parliament for Wokingham since 1987. First attending Kent College, Canterbury, he graduated from Magdalen College...
Cuts at executive level and trimming of MP’s expenses make for good headlines but it’s not even a drop in the ocean. All the unnecessary tens of thousands of public sector workers that have been added over the last 10 years need to be tackled. Although with already close to 8 million people either on benefits or studying it won’t be a popular decision.
Saving a few million here and there (like the recent will-they won’t-they TA training cuts) may make it sound like the government are getting tough but they are just sticking their finger in the dam and hoping the whole crumbling edifice doesn’t collapse before next May.
If the BBC were to announce 7% savings on total budget that’s something I’d stand up and take notice of but can’t see that happening unless they can do some sleight of hand PFI off book style deception.
Just a pity that every politician is now afraid to mention public sector job cuts so as to deprive the other party of an opportunity to put a bad spin on it but that’s something else entirely.
Reply: Of course cuts at the top are small in relation to the total, but they are important for the signal they send. Once the top has been cut, it has more moral authority to sort out the rest.
Congratulations on your personal cost-cutting. It’s a shame that you’re not in a position to actively apply the same principles to the rest of the public finances.
Is the BBC a quango or a company? Its identity is a bit difficult to define, for all the heavy-handed branding. If it wasn’t for the tax we have to find to support it, I wouldn’t care how much the executives were paid. However, it needs to be lumped in with all the quangos that need bringing under control.
Perhaps the transmission function (supporting the actual transmitter network) should be publicly provided, with every broadcaster paying to use them (the Network Rail model), but I can’t see any sense in having program making publicly funded. It was a reasonable way to set things up in the first half of the last century, but the rest of the world has moved on.
The Labour party has indulged the BBC, but if they are not re-elected, I hope that the relationship between the BBC and taxation is addressed. At the very least, if the BBC is to be funded from taxes, stop this inefficient licensing system that virtually everybody has to go through. Let the Treasury simply pass the money over from general taxation, and save lots of money in collection fees. Better yet, make the BBC stand on its own two feet.
Perhaps at last the penny (or Pound) is begining to drop for many in Public Service and Public Service industries.
Not before time. Perhaps they feel a new Government next year may not be as forgiving, so better do a bit now to show good faith, before getting clobbered.
Good to see you reducing your costs, without it would appear limiting your effectiveness.
Remember you may not be 19th cheapest (I dislike that word, How about most competitive) for long, now that MPs expenses are on the hit list, as that position was under the old system.
The new system will hopefully curtail some of the excesses of the old system, which will limit the amount of scope for inventive claims made by some of your competitors who were above you, and were thus less competitive in your league table.
I am sure your future targets will be met, and you will rise to the challenge, no matter what the rules.
Interestingly, just like MPs, we are told that BBC senior executives would be paid far more in the private sector. My hope is that they all go and take their chances. The fact that few seem to make that change shows the fiction behind the statement.
It is a shame we are obliged to pay the license fee in order to own a television and of course it is this very act of obligation that requires the BBC to attend to our criticisms.
I wonder to what extent this is a self inflicted wound and how much their revenues might fall if we were required only to pay if we wished to avail ourselves of any of their services.
Not much I suspect.
Break up the BBC and privatise it immediately. There is no such thing as “public service” broadcasting. If people are keen to watch BBC programming, let them pay for it on subscription. The licence fee greatly distorts the broadcasting industry in this country and institutionalises political bias in one of the main sources of broadcast current affairs journalism.
In view of the known left wing bias of the BBC as an institution, it is surprising that the senior executives are prepared to trough at public expense, or perhaps not.
The main problem with it that it has vastly outgrown its public service remit and is competing with commercial services in areas that it should not. It should be slimmed down to two TV channels, Radios 3 and 4 and the overseas service. All its other activities should be run in the commercial sector.
For most people who watch BBC, the absence of adverts is a plus point, but this is what creates the financial problem. Putting as many BBC programmes as possible on a pay-per-view basis might be one answer, enabling the licence fee to be reduced. BBC staff remuneration should be determined by market forces within a financial control total. The BBC is not the only public sector institution in which senior staff think that the world owes them a good living because they provide a public service. The World Bank, the International Mischief Fund, the many branches of the United Nations, USAID, and the EU are all examples of the top brass getting scandalously high salaries.
The vendetta against MPs has gone too far. The simplest system for back benchers is:
- Salary £a per annum
- Allowance for a one bedroom flat close to Westminster £b pa
(not payable if the MP’s constituency is close to Westminster)
- Travel & subsistence between the constituency and Westminster paid against receipts
- Allowance for all other expenditure (office, secretary, fact finding trips etc.) £c per annum
This would be simple to administer. The allowances would have to be slightly conservative so that they were clearly not hidden income. And it would be forbidden to raise the amounts during a parliament. Rises would only take effect after the next general election.
The next government will need to reduce the borrowing requirement by £40 billion per annum in each of the next five years. Personally, I am not looking for straws in the wind. It’s about time we saw some great big rocks in the wind.
BBC top salaries are in line with those in the commercial sector.This is the competition you are always going on about. All those vastly overpaid local authority chief excecutives have been lured away from the private sector by competitive salary offers,so the story goes.
You would have thought the Nimrod disaster might have persuaded the private sector good/public sector bad fanatics that the public service ethos has considerable merits. Attempts to extirpate it from British life ,even the Post Office, are social engineering of the worst type and are hardly conservative ,since they have no respect for the country’s traditions.
Now how about the cut the pay of their newsreaders and presenters. If they dont like it then could try and go to another channel, I doubt many would get the pay they do now!!!
If you privatise the BBC, what do you think will happen? It will be bought out by some rich foreigner sooner or later (like our energy and water companies) You are playing into the hands of Rupert. I don’t think we really want this.
First of all, congratulations in seeing that cost cutting starts with you – and with me! This is a very precious and rare attitude in today’s climate. Well done!
Second, the massive, unnecessary bureaucracy of the BBC is stopping the creation of excellent new, witty programmes. Before bureaucracy and the cult of self protection took over, there were all sorts of funny programmes. I used to laugh myself silly over some of them.
Now we have mockney millionaires shouting Thatcher jokes at each other. Nice and safe. Remember Kenneth Williams?
So the cuts are a fine start, but they do not go nearly far enough. Bureaucracy and creativity do not mix.
If only someone could do a send up: the BBC is screaming for one. And I do NOT mean the “brilliant” Armando Iannucci. He he he.
I don’t see why anyone in the BBC should be paid more than the PM. Like civil servants, they get their Honours, and when they retire on fine pensions, can “consult” with excellent fees for countless organisations in UK and elsewhere.
And don’t they join the BBC for other than financial reasons??
A trait observable throughout the public sector is an inflated sense of importance.
The BBC says it doesn’t just make programmes, it is engaged in the worthy cause of “public service broadcasting”. Local councils too often seem to view themselves as our masters rather than providers of services for which we pay through general taxation and Council Tax. The larger the State machine becomes, the more those within it seem to consider themselves indispensable.
To my mind, the most important question to be addressed when considering how to bring public finances under control is not the amount spent on each field of government activity but whether government should be involved in that field at all.
Television and radio are such different worlds now from even twenty years ago that it is hard to see any justification for a tax-funded broadcaster. In what way is BBC news coverage better than Sky, ITN or CNN? I can’t see it. What makes anyone think documentaries and nature programmes won’t be made without the BBC when there are more commissioned for and shown on independent channels than on the BBC?
Keeping a wide range of shows available free of pay-per-view charges is already achieved through Freeview, you don’t need a BBC you just need a requirement to provide a specified range of programmes to be made available free of charge as a condition of a broadcasting licence. There you have it, public service broadcasting without the telly tax.
The point is not about cost cuts, its about value for money.
Many people will defend the bbc on the fact that they will miss the Archers or Coronation Street.
Very many people will not defend the bbc since the above and many more comfort food programmes, of relatively low cost, do not come anywhere near to $3.5 BILLION.
Their news is biased and does not mention issues that show our government with its lies and incompetence.
Did anyone see or hear that Australia had raised its bank interest rates, that the significant increase in the UK and USA stock exchanges was only over 3 months in the summer, or that Germany’s unemployment decreased in September?
No because this “public” broadcaster is too much a government mouthpiece.
Thompson and his cohorts have fed at the trough for far too long under a compilicit government.
As for our “political class”, they must be reduced to about 300 MP’s, purged of Scottish MP’s, and a good salary with open transparant expenses given. Their record of attendance and voting to be openly in the public domain.
The reliance of the hopefully incoming Tories on local government is naive in its insistance of them undertaking serious social and development work. This when its local government is currently in the process of building up an overinflated bureacracy on exorbitant salary scales.
The Tories need to send out a clearly spelt out message that local government and councils need to restructure to meet the country’s and local needs, and not just to work to their own individual agendas.
Don’t watch much telly do you Cassandrina?
Last time I looked, the BBS didn’t make Coronation Street