Further Imbalance

27th August 09 – Further imbalance

The entry dated yesterday described how the gap between rich and poor has been exacerbated by debt and deflation. Another startling imbalance has occurred.

For the UK and in the year to March 09, 683,000 jobs were lost to the private sector. Concurrently, 285,000 more employees joined the public payroll. The principal reasons for the swelling of the public sector were as follows:-

• Banks that were nationalised as a consequence of the credit crisis have officially been reclassified as public corporations. These are Northern Rock, Bradford & Bingley, RBS and Lloyds Banking Group.

• Jobcentres have taken on more staff to handle the fall-out from the private sector.

• A claimed “culture of waste”. Jorg Radeke, economist at the Centre for Economics and Business Research said “This is part of a trend. Over the past couple of years there have been many more layers of government introduced – particularly in local government agencies – without having a great impact on the volume of public services received by the public.”

• Public sector productivity has fallen for much of the past decade.

• The public sector is less able to react to a recession quickly and efficiently.

The reasons for the employment imbalance as quoted above are taken from think tanks and professional economists. My view is that first, the employees of the erstwhile private banks and building societies are not public employees, to classify them as such is to play semantics. The comparison should be drawn by putting them back. Secondly, the heart of the matter is the management of public sector workers. Not its quality but its very presence. There is no management. Just watch for one day to know this is true. Technological tools abound and training levels are farcically high: none of this has produced greater productivity because there is no management of resources. And as for holiday and sickness entitlement ……