You could say that this week saw a leak of what is to be in the budget. An article in the Yorkshire Post quotes Nick Clegg as saying that he is preparing special measures for those parts of England that will be especially hit by redundancies in the public sector. Citing South Yorkshire, the North East, North West and parts of London, the article clearly implies that Mr Clegg is envisaging mass job loss and sees some parts of the country, which have higher proportions of public sector workers, as being particularly vulnerable.
This is a quite interesting story in itself, but the piece goes further. It appears that Mr Clegg envisages that the support packages to these areas should go mainly to the private sector, to encourage them to employ the redundant public sector workers. On the face of it this sounds OK, but it does beg one or two questions. To begin with the argument of public/private has often hinged on the cutting edged competitiveness of the private sector as opposed to the supposed cushioned existence of the subsidised public sector. Healthy and competitive businesses should not need an effective wage subsidy and surely those that accept it are moving into being tax payer supported and thus presumably guilty of the faults that are said to be the province of the public sector.
The second area of concern must be the overall impact on the taxpayer. Picture this scenario. A low paid public sector employee is made redundant. The taxpayer pays the redundancy costs and picks up the new costs of benefits and the costs of the public sector workers administering the benefits. The worker is now on a lower income and thus not contributing to the overall tax pool. This is a further burden to the taxpayer. The former employee takes a job with a private sector company. The company claims a state subsidy. This subsidy is administered by some further public sector employees. These are two additional costs to the tax payer. My only point is .......has anyone done the maths?
If a lower paid worker on, to be generous, £18k goes through the process above, is the taxpayer any better off? I am afraid I do not know the exact answer, but it looks a close run thing to me. It would be a shame if hard working public sector employees are put through all this pain, and the exchequer is no better off. If anyone has done the maths, please let me know.
| 3 Comments
|
| Pages
|
Maths
David Cameron perhaps? I absolutely agree and furthermore what about those public sector workers who cannot find jobs in the private sector even after public money has been injected into it. They will end up out of work and claiming benefit making them more of a burden on the public sector purse than they ever were.
By Mskinner on 04/06/2010 @ 15:03:17 | Country: UK |
Has anyone done the maths?
David poses an interesting question. I doubt whether anyone has done the maths. But if we want to know if a subsidised private sector will act to achieve a worthy public policy outcome do we need to look any further than the banking sector and the continuing failure to lend to businesses?
By Michael Frater on 04/06/2010 @ 20:35:32 | Country: United Kingdom |
Do the math...
Absolutely spot on, David. I couldn't summarise the argument any better, and this is a question/argument that needs to be raised more regularly when these sort of policy options are floated.
One thing I would add is, unfortunately, another potential problem to emerge from what - we're told - Nick Clegg is working on: that any temporary subsidy paid to a private firm will merely mean it recruits redundant former public servants for the duration of that subsidy. Are we to believe that rational, efficient businesses are to swallow large and permanent increases to staffing costs just because they want to 'be nice' to unemployed people? Won't happen. Those with good, suitable skills sets will land permanent roles, less suitable applicants may land a job for the duration of the taxpayer subsidy. Seems very short-termist and could merely serve to perpetuate problems with people moving on and off of benefits in a cycle.
By Markc on 08/06/2010 @ 13:36:47 | Country: UK |
|
|
Showing 1 to 3 of 3 Comments |
