Daunting task of improving public services is the real challenge for next government
The SNP has faced the consequence of sheer incompetence with their resounding by-election defeat but dissatisfaction with public services is rife south of the border too, writes Paul Ormerod
Scotland has featured prominently in the media following Labour’s massive victory over the SNP in the Rutherglen and Hamilton West by-election.
The sheer incompetence of the Nationalist government in Edinburgh is sinking in with the Scottish electorate. Voters in England are increasingly dissatisfied with the quality of public services they receive. But it is worse in Scotland.
The fiasco over the building of two new ferries to serve the island communities by the nationalised company Ferguson Marine symbolises the problem.
They were commissioned in 2016 and will not enter service until 2025 at the earliest. The original budget has already been spent several times over. The Scottish government has admitted this year that it would be cheaper to scrap the vessels being built and start afresh, but it still persists.
When we delve into the operations of another nationalised company, CalMac, which operates the ferries, some deep seated issues around the delivery of public services are made apparent.
Many CalMac employees work continuously for two weeks and then get two weeks off. In addition, they get between seven and ten weeks’ paid holiday a year. We do not have to subscribe to the view that young children should be sent up chimneys to regard these terms as rather generous. Great for the workers, but someone else has to pay.
Labour’s shadow health secretary, Wes Streeting, is due to give his speech to the Labour conference today. But he has already aired his concerns about the quality of NHS services. According to Streeting, the NHS is in an existential crisis and unless it modernises and reforms it will die. “When you compare the NHS to other health systems around the world, we spend too much money in the wrong places getting worse outcomes,” he declared.
Defenders of the NHS often posit a false dichotomy between having the NHS and having the American health system. The plain fact is that if we could wave a wand and replace the NHS with any other Western European health service, the quality of service would improve.
The problems with the NHS were laid when it was founded in the late 1940s. Then, people believed that central planning worked. After all, the planned economy of the Soviet Union had just fought and won by far the largest land battle in the history of the world against Nazi Germany. And it had been able to do so thanks to its centrally planned economy producing vast amounts of military equipment. Even into the 1960s, the CIA worried that the planned Soviet economy would overtake the more disorganised one of capitalist America. But we now know that this was completely incorrect. When the Soviet bloc finally collapsed around 1990, living standards were far below those of the capitalist West.
Yet the NHS continues to operate on the same lines as those laid down by its founder Aneurin Bevan in 1948. Tinkering around does virtually nothing. Even throwing large amounts of money into the system makes little difference.
The real challenge facing Labour after the next election, or the Conservatives if by some miracle they are re-elected, is to raise dramatically the performance of the public sector.
Some bits do work well. But from the seemingly trivial, such as the featherbedding of jobs around Scottish ferries, to enormous issues such as the NHS, productivity overall is obviously far too low.
Paul Ormerod is an economist at Volterra Partners LLP and author of Against the Grain:Insights of an Economic Contrarian, published by the IEA in conjunction with City PM