Tuesday, September 11, 2012

The consequences of public service cuts

Since coming to office in 2008, National has slashed and burned its way across the public sector, and "capped" (meaning sacked) thousands of public servants. The result? More consultants, of course:

Increased use of consultants in the public sector is likely to continue for some time, Finance Minister Bill English says.

But Labour leader David Shearer said the trend was costing taxpayers.

Lists of the top 10 spends on redundancies and consultants in the public sector reveal the highest redundancy spends by government departments in the past five years, totalling just over $114m.

Many of the same agencies spent a total of $910.5m on outside help from 2008-09 to 2010-11.

The problem is that sacking public servants doesn't reduce the work a department has to do; it simply means they have fewer people to do it. So they have to hire someone. And frequently, this is the same person they just sacked, who now gets to charge consultant rates to compensate for their lower job-security. A saving? Not really. you just inflict a lot of pain, for no real gain (but the government gets to issue press releases that they are Doing Something, and surely that's worth $910 million, right?)

There's a second part to this problem, which hasn't bitten yet: erosion of capacity. Public servants are a reservoir of institutional and specialist knowledge; sacking them loses that knowledge. And usually, you don't know what's been lost until its too late. In the 90's we found that public service cuts meant that we had problems running elections, because we'd sacked too many of the people who know how to do it properly. This time round, it could be epidemic control, or managing an energy shortage, or properly archiving government records. We just won't know, until we wake up one morning with a mess on our hands, and a big bill to fix it. But I guess National doesn't expect to be in office long enough to have to deal with the consequences of its stupidity.