‘More for less’ versus ‘waste’
Since last year the biggest challenge for the UK public sector has been to find ways of doing “more for less”. Now, however, we are starting to hear a lot more about “waste” – especially after the recent TV Chancellors’ Debate. Is this just a change of words, or is the distinction important?
Our big challenge is to reduce the public sector deficit as quickly as possible without putting the fragile recovery at risk.
In this context, perhaps a focus on waste is useful. It certainly makes people think about how much taxpayers’ money is spent on activity of little or no value. It might well stimulate them to redouble their efforts to find cost savings. This would certainly help with reducing the deficit.
However, from an economic perspective, the test is that public funds should be spent on activity which gives the best possible return on investment. You could consider waste to be part of this story – we certainly should not be spending on activity which gives little, or even negative return. But, just as importantly, we also should not be publically financing any projects if there are more alternative options which would give a better return. When you think about it like this, perhaps “more for less!” makes more sense as a rallying cry.
My impression is that most parts of the public sector are already looking for, and finding, cost savings, and also for more cost-effective options to initiative and projects. Indeed they have been doing so for some time now. At the same time, politicians are using the more emotive concept of waste to excite public awareness of the challenges on public spending, and to pressurize the public sector to find savings faster.
So “waste” is fine for now, but “more for less” is the bigger prize.