Magazine article Public Finance

Things Can Only Get Tighter as Brown Takes Over

Magazine article Public Finance

Things Can Only Get Tighter as Brown Takes Over

Article excerpt

'In 1997, it was a moment for a new beginning. The sweeping away of all the detritus of the past And expectations were so high. Too high, probably'

Outgoing prime minister Tony Blair's farewell speech on May 10 in part exposed the over-optimism of those who believed the Labour Party's resurgence a decade ago was the solution to all of Britain's challenges.

Only minutes later, at the FDA conference of senior civil servants in London, officials were being given a stark warning of the need to confront modern political and economic realities in the fiscally tight, post-Blair era.

Ten years on, the departing leader, who initiated a minor revolution in the public services by injecting unprecedented amounts of funding, has left nobody in the dark: government is tough and public expectations about those services must be managed.

It is the sort of message the electorate would normally associate with the man likely to succeed Blair on June 27: the dour, pragmatic and prudent chancellor Gordon Brown.

Perhaps the famously strained relationship in Downing Street had eased enough for the outgoing leader to helpfully reduce expectations.

Now it was up to Cabinet Secretary Sir Gus O'Donnell to outline to FDA delegates the challenges his senior personnel face under a new prime minister. He offered a predictable, but important list: globalisation, rapid technological changes, changing demographics, increasing flows of capital and labour, migration and security issues.

'[But] added to these, we find rising public expectations. Expectations around public service delivery are rising. But expectations of what governments will do in future are also changing radically O'Donnell said.

"The government is now being asked to tackle childhood obesity, for example, and... its span of influence, whether we like it or not, is widening because of expectations. On top of this, we're expected to increase the quality of services and this means increasing public expenditure to manage those things.

'But we're entering a period where the rate of growth of public spending is going to decline. . . and yet the requirement is to do more.'

According to the head of the civil service, two things follow from this. First, there will be a cross-party consensus in the Commons on an 'unrelenting search for efficiencies and cheaper ways to deliver services. That, O'Donnell admitted, meant that civil service numbers will continue to decline'.

It was also a warning that internal Whitehall opposition to the continued privatisation of services and the use of the voluntary sector is futile.

'And, secondly, I'm afraid to say, it will be realistic to assume that the chancellor will want to carry on seeing pay restraint in the public services,' O'Donnell warned. ? strongly encourage you to engage in this process of doing more for less.'

O'Donnell's stark words did little to raise the spirits of senior civil servants who had spent the morning debating a year-long delay to below-inflation pay rises, the impact of 84,000 Whitehall job cuts by 2008, rising workloads and the real-terms cuts in departmental budgets expected in the Comprehensive Spending Review.

Jonathan Baume, the FDA's general secretary, told the conference that 'by early July', with new premier Brown in place, 'the civil service and civil servants face significant challenges on a number of fronts'.

But he warned that 'too often public sector staff have felt disenfranchised from the difficult changes that have been made in the past decade' and called for a new period of political engagement over reforms. …

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