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Campaigning for greater efficiency?

Thursday May 5th, 2011

By Morven MacNeil, GO Content Editor

Today’s the day for all the devolved government elections; after weeks of campaigning we’ll soon find out which parties have been returned to office. But will a change of government have an impact on the efficiency agenda? Will the budgets already set be dramatically revised? GO makes a case study of the situation in Scotland.

Scotland case study

The Centre for Public Policy for Regions (CPPR) has released a paper ahead of the Scottish Parliament Election, 2011 which looks at the party manifestos and how they will shape the public sector.

The Scottish 2011 Election – the big questions that remain unanswered reveals that the relationship between efficiency savings, pay and jobs is crucial but is very little discussed.

All of the main political parties expect to generate substantial generic efficiency savings over the next four years. Both the SNP and the Labour Party explicitly target a 2% efficiency saving across the entire £28 billion Scottish Budget.

However, the paper reckons that public sector workers will be worse off by 6-12% in terms of what their pay can purchase. Jobs lost could amount to 20-25,000 (6-8%) by 2014-15, and will be concentrated in certain areas.

It states: “All of the Party Manifestos avoid tackling the thorny issue of the impact of efficiency savings on wages and jobs. The result is that there is great uncertainty around how many jobs will be lost and how much the purchasing power of wages will decline.”

The situation is slightly different for the NHS; the health resource budget will rise by roughly 2.5% a year, so helping to accommodate some of the rises in demand and inflationary pressures.

However, most of the NHS budget is spent on wages and so any related inflationary pressures may well be dealt with in the same way as is being proposed elsewhere in the public sector. If the same pay arrangements apply, then non-wage increases of over 5% a year could be accommodated without undermining affordability. On the other hand, if wages are not as tightly controlled as elsewhere in the public sector and some wage inflation results, a growing advantage would emerge for health workers compared to other public service workers.

COSLA President Councillor Pat Watters has also issued a final challenge to the main Scottish political party leaders.

Cllr Watters said his challenge to the new First Minister would be to work with local government as an equal partner. He stated: “As the rough and tumble of electoral politics gives way to the more serious business of government, my message to any incoming government is simple. Delivering excellent public services requires all tiers of government to work together. Of course there are challenges ahead, but let’s start by taking a step back and remembering that it is local government services that are best placed to make a real long-term difference to Scotland’s communities. We are looking forward to building that relationship with national government, and we are ambitious for what we can achieve.”

What’s your view?

How much of an impact do you believe the new devolved governments will have on the efficiency agenda? GO would like to find out your views.

Related links

Work with us to deliver real reform – COSLA

Election pledges may lead to job cuts



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