Here is a recent press release relating to a speech made last week by the CBI's DG. The trenchant criticism of the government's reform agenda is interesting in its own right. What needs a little exploration are the unsubstantiated assertions and claims about the beneficial nature of private sector involvement in public service delivery. There's even a swipe at public sector pensions (please see my last blog on that issue) in the usual, broad and undifferentiated terms.
Now, reform of some pension schemes in the public sector would be helpful, for instance why not start with some of the unfunded schemes, like the one for MP's for instance. On the other hand, I heard this morning on another of the BBC's public pension have-a-swipe fests that Francis Maude was criticising public sector pensions from the standpoint that private sector pensions weren't as good, i.e. the 'envy' critique, so must we all descend to the lowest common denominator.
The CBI's DG takes the opposite view, i.e. as he says, the private sector has tackled their pension shortfalls, and reduced benefits accordingly, so it's a matter of positive choice and better value rather than simply being a poorer comparator. Either way, less is better, regardless of equity, it seems.
We should all feel genuine concern for those in the private sector who have suffered poor employer schemes, low take-up and critical mass, equity-based investments that have tanked at inopportune times and funds raided by Directors or lost as companies went bust. But none of those unfortunate circumstances justify the unprecedented attacks on a host of (undifferentiated) public sector schemes, put in place to provide not unseemly reward (read the numbers) but recognition of long public service and some small support in the later years, many based on participant contributions.
Now is the time for employees in all sectors to demand good pension schemes, not for employees in all sectors to be divided and set against each other by those who will receive virtual kings' ransoms of pensions, some from the state and others through largely unchallenged, broadly unpublicised large-scale contributions from their companies.
ONE YEAR ON GOVERNMENT IS NO FURTHER FORWARD ON PUBLIC SERVICE REFORM
Forces of inertia holding back reform, warns CBI Deputy Director-General
The Government has allowed urgently-needed public service reform to be derailed by “forces of inertia,” and gives the impression of “having lost its way, uneasy about reforms and unsure about how to present them.” That is according to the CBI’s Deputy Director-General Dr Neil Bentley.
Speaking at the CBI’s South East annual dinner in Epsom last week, Dr Bentley questioned the coalition’s commitment to reform and warned that failure to embrace competition could lead to deficit-reduction plans faltering.
He said: “In most areas, we’re seeing public services cling on to existing ways of doing things, with vested interests fighting modernisation at every turn and campaigning against change.
“Just this week, we’ve seen the forces of inertia in the NHS unions triumph on health reform. This is a missed opportunity for the Government, and with profound consequences. Patient services will only be improved if the NHS is opened up to far greater competition and dependence on hospital care is reduced. Without reform, the £20bn savings needed to help balance the NHS books will surely hit services.
“Health’s not alone. In local government, policing, probation and elsewhere, reforms are losing momentum.
And Dr Bentley added:
“Today, the coalition gives the impression of having lost its way, uneasy about reforms and unsure how to present them.”
Launching a new report, One Year On – Progress towards transformed public services,Dr Bentley highlighted some positive steps the Government has taken. For example, in making efficiency savings, centralising procurement and moving towards sharing back office functions. Progress has also been made on bringing in specialist providers to tackle worklessness and expanding the academies programme.
But Dr Bentley questioned the Government’s commitment to reform and argued that it must promote competition to ensure we get better public services at the right price.
“Before last year’s general election, we heard plenty from both opposition parties about the need for change. That’s why it’s so disappointing that we’re one year on with a coalition government but no further forward, with reforms stalling and the path ahead unclear.”
Pointing to a catalogue of delays, he said:
“In January, the Prime Minister said: “We cannot put this off any longer.” In early February, he promised a White paper. Now we’re in mid-June, we’re told we might get something next month. After all this time, this ongoing uncertainty - combined with the debacle over NHS reform - clearly calls into question the coalition’s commitment to reform.”
He highlighted evidence of the benefits of competition in service delivery, with competitive tendering leading to cost savings between 10 and 30 per cent and how other countries make much greater use of the private sector. For example, in Sweden where private operators run free schools; in France where they run one in three hospital beds; and in Denmark where one company, Falck, provides the majority of fire-fighting and ambulance services.
Dr Bentley blamed fear of a union and electoral backlash for the Government’s hesitation, and urged ministers to hold their nerve on public sector pensions.
“If the fear is that the unions will derail reforms, then the best answer is to be open, and to discuss with staff any plans for meeting the shared challenges we face.
“Though on pensions this isn’t working – even after all the consultation by the Government. Slap-bang in the middle of talks we’re seeing some unions sabre rattling and calling everybody out.
“The Government has to hold its nerve and push through Lord Hutton’s pensions reforms. Otherwise the public sector pensions deficit - which is already more than £1 trillion - will get even more unaffordable. The private sector has bitten the bullet on this. Now the Government as an employer needs to do the same.”
It should also press ahead with modernising the law around industrial action – and before strikes occur:
“We’ve heard Business Secretary Vince Cable say legislation will be considered if strikes happen. But by then it’ll be too late, and no barn-door-closure strategy will make amends for the horse having long-since bolted. I say: do it now, before the damage is done.”
Businesses are also ready to play their part in helping transform public services:
“First, we’re already working with the Cabinet Office and other departments to show how new approaches can result in better outcomes at a lower cost.
“Second, we’ll help to create new public-private partnership models so major projects and services get the financing they need, including new PFI. Where we’ve done well, we’ll do more of the same. Where we haven’t performed as strongly, we’ll up our game.
“And third, we’ll show how private sector involvement makes a positive difference to individuals and communities, and how our dynamism brings benefits for everyone,” Dr Bentley said.
Speaking at the CBI’s South East annual dinner in Epsom last week, Dr Bentley questioned the coalition’s commitment to reform and warned that failure to embrace competition could lead to deficit-reduction plans faltering.
He said: “In most areas, we’re seeing public services cling on to existing ways of doing things, with vested interests fighting modernisation at every turn and campaigning against change.
“Just this week, we’ve seen the forces of inertia in the NHS unions triumph on health reform. This is a missed opportunity for the Government, and with profound consequences. Patient services will only be improved if the NHS is opened up to far greater competition and dependence on hospital care is reduced. Without reform, the £20bn savings needed to help balance the NHS books will surely hit services.
“Health’s not alone. In local government, policing, probation and elsewhere, reforms are losing momentum.
And Dr Bentley added:
“Today, the coalition gives the impression of having lost its way, uneasy about reforms and unsure how to present them.”
Launching a new report, One Year On – Progress towards transformed public services,Dr Bentley highlighted some positive steps the Government has taken. For example, in making efficiency savings, centralising procurement and moving towards sharing back office functions. Progress has also been made on bringing in specialist providers to tackle worklessness and expanding the academies programme.
But Dr Bentley questioned the Government’s commitment to reform and argued that it must promote competition to ensure we get better public services at the right price.
“Before last year’s general election, we heard plenty from both opposition parties about the need for change. That’s why it’s so disappointing that we’re one year on with a coalition government but no further forward, with reforms stalling and the path ahead unclear.”
Pointing to a catalogue of delays, he said:
“In January, the Prime Minister said: “We cannot put this off any longer.” In early February, he promised a White paper. Now we’re in mid-June, we’re told we might get something next month. After all this time, this ongoing uncertainty - combined with the debacle over NHS reform - clearly calls into question the coalition’s commitment to reform.”
He highlighted evidence of the benefits of competition in service delivery, with competitive tendering leading to cost savings between 10 and 30 per cent and how other countries make much greater use of the private sector. For example, in Sweden where private operators run free schools; in France where they run one in three hospital beds; and in Denmark where one company, Falck, provides the majority of fire-fighting and ambulance services.
Dr Bentley blamed fear of a union and electoral backlash for the Government’s hesitation, and urged ministers to hold their nerve on public sector pensions.
“If the fear is that the unions will derail reforms, then the best answer is to be open, and to discuss with staff any plans for meeting the shared challenges we face.
“Though on pensions this isn’t working – even after all the consultation by the Government. Slap-bang in the middle of talks we’re seeing some unions sabre rattling and calling everybody out.
“The Government has to hold its nerve and push through Lord Hutton’s pensions reforms. Otherwise the public sector pensions deficit - which is already more than £1 trillion - will get even more unaffordable. The private sector has bitten the bullet on this. Now the Government as an employer needs to do the same.”
It should also press ahead with modernising the law around industrial action – and before strikes occur:
“We’ve heard Business Secretary Vince Cable say legislation will be considered if strikes happen. But by then it’ll be too late, and no barn-door-closure strategy will make amends for the horse having long-since bolted. I say: do it now, before the damage is done.”
Businesses are also ready to play their part in helping transform public services:
“First, we’re already working with the Cabinet Office and other departments to show how new approaches can result in better outcomes at a lower cost.
“Second, we’ll help to create new public-private partnership models so major projects and services get the financing they need, including new PFI. Where we’ve done well, we’ll do more of the same. Where we haven’t performed as strongly, we’ll up our game.
“And third, we’ll show how private sector involvement makes a positive difference to individuals and communities, and how our dynamism brings benefits for everyone,” Dr Bentley said.
