More radical reforms are necessary

Apr 22 2008 by Sarah Green, The Journal

GORDON Brown’s pledge to focus “solely” on keeping the economy on track must include more radical reform of Britain’s public services.

The call came as business leaders delivered a damning verdict on the government’s reforms to date. A new CBI survey shows three in four bosses are dissatisfied with them, while two in three say the momentum of reform has not been sustained since Gordon Brown formed his government last June.

Continuing demand for better public services at a time when the economy is slowing and public spending growth is falling back following years of rapid expansion means reform will be critical to restoring confidence in the government.

Public services are also a key part of the economy, employing more than 20% of the workforce, meaning any productivity improvements they achieve can give a significant boost to economic growth.

The prime minister now faces a battle to convince the business community of his ability to see through his New Year pledge to “deepen and broaden” reform.

While recent proposals to shake up the welfare system and extend GP hours are small steps in the right direction, the prime minister will need to make far greater strides if the impression is not to be given that it is all too little, too late.

These warnings come against the backdrop of more restrained public spending growth, as announced in the 2007 Comprehensive Spending Review.

But recent Government claims it has hit or even exceeded its Gershon efficiency targets have been met with scepticism, with the CBI survey showing only one in 20 firms believe the recent efficiency drive has been successful, while 86% think it has failed.

Business leaders are also sceptical about the government’s ability to deliver on its new efficiency targets of £30bn a year in cashable savings. Only 6% of firms think the Government will be more successful in the coming years in making savings than it has been in the last few.

It is time for prudence to become an everyday reality in our public services and not just a buzz-word.

Sarah Green is regional director of the CBI