08 June 2010

• The Adam Smith Institute claims we need to completely re-think government in order to solve long term fiscal problems
• Its report proposes the creation of a powerful, cross-departmental Secretary of State for Public Service Reform to lead structural changes
• It also suggests dramatically cutting the number of government departments, and reducing the size of the cabinet to 12

The coalition government is right to take the public debt seriously but must look beyond short-term cuts and re-examine the whole structure of government, according to Dr Eamonn Butler, director of the Adam Smith Institute.

His latest report, Re-booting the Government: how to deal with the deficit without cutting vital services, draws on successful efforts to eliminate budget deficits in Canada and Sweden, and argues that the government must focus on ‘reform’ rather than just ‘cuts’ if deficit reduction is going to be sustainable in the long run.

Re-booting government

Dr Butler’s report compares government to a computer that is overloaded and slowed down by unwanted files and unnecessary applications. The sensible approach is to save what needs to be saved, and then re-boot. In the case of government, we must work out what the state actually needs to do, and sweep away the rest – all those costly, politically driven initiatives that have been established over time and now clutter the budget.

The report goes on to argue that – like Canada in the 1990s – we need a powerful Secretary of State for Public Service Reform to lead a thorough review of the operations of government, working out which public services are valued and essential and which bring only marginal benefit, and oversee structural changes. This position should be regarded as one of the top jobs in politics, and failure has to be a career-breaker.

Streamlining Whitehall

Dr Butler also suggests that we re-think public administration, reducing the size of the Cabinet to 12, in order to improve the collegiate working of government and make the ministers more recognizable and accountable. His plans would also involve the number of ministerial departments being reduced to 11: the Cabinet Office, the Treasury, the Home Office, the Ministry of Justice, the Foreign Office, and the Ministry of Defence, plus departments for Health, Education, Welfare, Infrastructure, and Local Affairs. Other departments would be closed down.

Dr Butler added:

“It is clear from the Canadian experience that the government should not just take a cheese-slicer approach to spending. Rather, we need to re-think the structure of government itself. We need to balance the budget, but the best way to do that is not by thinking of the whole things as a ‘cuts’ exercise. Think of it as a reform exercise. Focus government on what it really needs to do: re-engage with the public, stop creating new programmes and quangos just because they capture a day’s headlines. Rethink the whole thing. Then re-boot, and you find your government running much more efficiently and cost-effectively.”

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