Tuesday 21 August 2007

Quangocracy - a note of caution

Every year, a think tank called Economic Research Council goes through the list of 'Public Bodies' and tots up how much they cost.

The headline figure of £167 bn p.a. that has been widely touted is not just running costs; about half of that is just education or health spending that has been reclassified.

But half of £167 bn is still plenty, enough to get rid of VAT or the super-tax on employment income (aka "National Insurance")!

An easier way of guesstimating waste and overspending in public sector is to look at number of employees in "Public admin, education and health" here. The number went up from 6.5 million in 1997 to 8.2 million by end of 2005.

So that's 1.7 million ripe for sacking (plus however many were already surplus back in 1997), let's say average cost per employee £50,000 (including salary, plus 30% for pension promise, plus overheads, office space, telephone). I make that an easy saving of £85 billion per annum.

Which ties in with the figure of one-half of £167 bn.