A Six point plan for the Post Olympic Economic Recovery

I get depressed when I hear commentators (as this evening) talking as though the only weapons available to the Chancellor to kick start economic recovery are public spending and quantitative easing. This is the way to a rerun of the 1920s, the wipe-out of the saving of the middle classes, an unholy mix of national and socialism and re-armament for World War 3 over food and fuel suppliers. The main difference is that Europe is likely to be a decaying and powqerless backwater, throttled by regulatory overheads and riven by tensions between North and South and between the unemployed and those with state jobs and pensions.     

I hear people talk of the need for an imaginative “third way”.  It does not need much imagination to assemble a simple Six Point Plan for Economic Recovery based on policies that have succeeded in the past.

The plan that I aim to elaborate over my next few blog entries is based on the classical business approach to turning round a bankrupt business:

1)      First top the bleeding

2)      Second cut the overheads

3)      Then go for growth on positive cash flow  

The problem is that all three strategies are alien to central government, both politicians and officials. More-over “outsourcing” is now part of the problem. It is no longer part of the solution.

The rhetoric is of cuts but there are more civil servants, regulators and quangos today than when the Coalition Government took over, albeit the rate of growth may have slowed. More-over the value of outsourced contracts has also risen, albeit their profitability may have fallen in a set of lose lose negotiations in which only the lawyers and consultants have benfited. Instead of employing profit motivated consultants and politically ambitious special advisors to attack those whose objective is to serve the public, we need to remotivate and reskill our public servants to do their jobs properly under open and democratic accountability.

That requires that they know what their “job”  is.  That requires clear and prioritised departmental objectives.  But ministers like to make promises and Civil Servants are promoted for serving  Ministerial wishers. Hence the ragbag of unprioritised initiatives that passes for policy within most Departments.

Time and money have run out. We can no longer buy time to remotivate, retrain and replan, we have to ACT and to act fast. I blogged on some of the ideas below during the run up to the budget but over the next week or so I plan to elaborate on thse in the context of the six point plan below:  

1)      Stop the Bleeding: including the use of marginal impact modelling(*) to create a more just, simple and enforceable tax and benefit regime

2)      Cut the overheads:  A Rationalisation of Regulation: including a “Regulatory Impact Assessment Unit” to use marginal impact modelling  on all new proposals and in support of a rolling reform programme   

3)      Smart procurement:  including devolution from Whitehall to Townhall within mandatory frameworks for service inter-operability, performance monitoring  and disputes monitoring

4)      Window of 100% Capital Allowances, Business Rates and VAT relief to kick start investment in a 21st Century Infrastructure

5)      Tax Free Education and Training to Global Standards

6)      The UK as the world’s most Trusted On-line Trading Hub

“Marginal impact monitoring” is an elaboration of the ideas of the later Donald Michie on which I have blogged before  . It entails the computer modelling of proposals to see whether they are likely to have the impact expected.  Sir John Hoskyns tried in vain to apply similar “systems thinking”  in the early days of the Mrs Thatcher’s government. As one mandarin put it afterwards : “It took us 18 months to work out what he was up to – and another 18 months to stop him. He would have destroyed the service.”  The error was to think of systems thinking as a weapon for Ministers, Spads and Consultants to use against Sir Humphrey as opposed to a technique that should be taught to all aspiring Mandarins to help harness their new ministers’ enthusiasm  to the long term benefit of the nation.  

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