http://www.adamsmith.org/blog/archives/000993.php
Start at zero
By Dr Madsen Pirie  Gov't Administration
Britain's Conservatives have identified savings of £35b in Civil Service
costs, reports David Cracknell. They appointed financial expert David James
to see where cuts can be made. He recommends chopping £1.6b off the Home
Office budget by adopting an Australian system of immigration quotas.

James also identifies big savings in health (£7.9b), education and skills
(£5.6b), defence (£4.6b) and local government (£4.4b). An estimated 235,000
Civil Service jobs would disappear. Labour says that this will mean service
cuts. One of their tactics has been to translate the savings into average
service cuts in each electoral district, claiming that "this will mean the
loss of 157 school places in your own constituency," which plays big in the
local media.

Anyone who has seen Whitehall from the inside can identify waste. The Adam
Smith Institute used to run an Economy in Government competition with prizes
for the winning suggestions; and Civil Servants featured prominently among
the winners. The Thatcher governments found that the most effective way of
cutting costs was to move whole areas of responsibility into the private
sector. Industries which had made losses for decades were privatized and
revitalized once outside the domain of government.

The problem with 'government saving' is that every programme has its
defenders, and government soon becomes exhausted with the meagre gains
achieved after epic struggles. The Adam Smith Institute plans a different
approach. It will appoint a team of political and business experts to do the
exercise using zero based budgeting. Instead of starting with the status quo
and looking to reduce costs, they will start at zero and ask what government
should be doing, and how it might do it efficiently. Their proposals will
feature a government much more efficient, and very much smaller.

Unfortunately for the Tories, this will report after the next election, and
too late to help them.


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