‘Is it not time we changed the way we do things in Wales?’

It still takes a brave individual to challenge the ‘Group Think’ in Welsh politics that states public services are sacred, reforming them are dirty words and that it’s up to the private sector to make itself bigger, not WAG to reduce the size of the public sector.

But Economist Brian Morgan is one such man well known for saying things need to change and in a lengthy piece in the Western Mail earlier this week takes the issues head on.

On the Economy he writes :-

Secondly, we simply need to re-balance the economy. The increase in public sector employment, even during the recession, has been significant and the consequent increase in bureaucracy and regulation has become stifling.

Everyone is aware that very tough economic decisions will have to be made and the implications for the Welsh economy are not good.

We have become used to large increases in the block grant (it has risen from £7bn to £16bn since 1999) and this has allowed the Welsh Assembly Government to greatly extend the range of services that it seeks to provide and the number of regulations it strives to enforce.

In the short-term, the main economic problem in Wales will be how to cope with expected reductions in the block grant without undermining the recovery. But, in the longer-term, the more important issue will be about how to reverse the recent expansion in public expenditure and the consequent rise in the number of administrators.

One option is to make more effective use of the private sector and of the voluntary sector in delivering public services.

In Wales the share of government expenditure in GDP has risen to more than 60% – which is simply unsustainable. We need a government in Wales that not only recognises how untenable this is, but has the policies and the determination to reduce the Government’s share of GDP back towards normal peace-time levels – below 50%.

And on the Welsh Civil Service and Bureaucracy :-

These problems have been exacerbated by recent WAG policies which have created an ever-expanding bureaucracy. For example, during the merger of the WDA into WAG in 2005, a pledge was made that this would not lead to any redundancies – (apparently we don’t do efficiency savings in Wales!).

The result is that after five years more than 100 people are on “gardening leave” as no posts have been found for them in the new set-up. This is despite the fact that the total numbers employed in WAG have expanded significantly with many of the new posts being introduced to oversee and monitor the work of the WDA!

Similarly after expanding the number of Local Health Boards from five to 22 in the year 2000, WAG has recently reduced the number of Health Boards back to seven. This represents mismanagement on a grand scale, but despite the huge increase in the number of administrators created on the way up, (22 chief executives, 22 finance officers and chairmen etc, etc.) there have been no redundancies on the way back down.

So will anyone in a position influence listen to Brian Morgan or will things continue as they are – needless to say i’m not holding my breath?

Tories and Lib Dems take the path of least resistance to plug the deficit

It’s hardly a shock that VAT will rise and benefits will be cut in George Osborne’s emergency budget in a few weeks time, but don’t take my word for it, the well respected boss of the Institute of Fiscal Studies Robert Choke said this yesterday :-

The parties have agreed to cut planned spending on ‘non-frontline’ public services by £6 billion this year, as the Conservatives wanted, but have said that an unspecified proportion of the savings “can be used to support jobs” (rather than directly to cut the deficit). They have also agreed on a “significantly accelerated” fiscal tightening over the course of the parliament. But whether this would be a bigger or faster tightening than that already implied by the Conservatives’ pre-election fiscal targets is unclear. We assume that the Conservatives were looking for a tightening of 4.7% of national income by 2015–16 compared to the tightening of 4.1pc of national income implied by Labour’s final Budget. But neither coalition party was unambiguous in its fiscal objectives before the election.

As regards the composition of the tightening, the agreement stated that “the main burden of deficit reduction [should be] borne by reduced spending rather than increased taxes”. But it did not specifically endorse either the 4:1 split proposed in the Conservative manifesto or the 2½:1 split implied by the Liberal Democrat manifesto. But the agreement did endorse the Conservative plan for year-on-year real increases in NHS spending and a large real rise in overseas aid. This suggests an intense squeeze on the budgets of other Whitehall departments in the spending review due this autumn. It also leaves open the option of tougher action to cut social security spending and does not rule out the possibility of significant net tax increases (perhaps most likely a rise in VAT) in the forthcoming Budget.” (The bold was added by the Telegraph’s Economic Editor)

Another concerning development yesterday was the Bank of England Governor Mervyn King getting involved in political debate and endorsing the new Government plans – the role is supposed to be non political and Mervyn King has stayed away from talking policy until now, so let’s hope it’s a one off or it could set a worrying precedent.

Unemployment in Wales rises by 11,000

With the media love in of Dave and his new friend Nick continuing, it’s worth reminding ourselves that there is other news to report and the latest UK unemployment figures from the Office of National Statistics for the previous three months were published today and they make grim reading.

Overall UK unemployment rose by 53,000 to 2.5 million and in Wales the total rose by 11,000 in the three months to March, the figure now stands at 133,000.

With the possibility of big job losses on the way for the public sector across the UK and Wales its worth highlighting a new report from Ernest and Young ITEM club entitled Entrepreneurs: powering job creation in the UK which says ‘medium sized fast-growth entrepreneurial companies key to plugging unemployment gap as public sector cuts loom’ – the question is does Wales have enough of them to offset the public sector job losses, I’m not so sure.

I am also waiting the political response because it’s now a problem for the Tories and Lib Dems as well as Labour and Plaid Cymru. It will be fascinating to see what each camp says about today’s figures, given the fingers in the ears response from WAG followed by the scorn poured on them by the Tories and Lib Dems that is so familiar here in Wales.

Its change, but what sort

After the Election we all knew there would be a new Government and last night Gordon Brown and his family left Downing Street with dignity, to be followed shortly after by a relieved but sober toned David Cameron who is now Prime Minister along with his Coalition partners the Liberal Democrats who made their own history by returning to Government after decades in Opposition- question is do they get any credit for it?

However that’s where the tone alters because like many people today I am depressed and not just because we have a Conservative/Liberal Democrat Coalition Government in Westminster that doesn’t understand Wales’s needs, it also means Welsh Labour and Plaid Cymru get a free pass back to a majority Government in Cardiff Bay at next year’s Welsh Assembly elections without having to alter their thinking or deal with the reality of what being in Government actually means.

You can already here the Cameron/Clegg Cuts battle cry, it took just one election for the progress of the last decade to go up in smoke here in Wales and its back to the bitter tribalism and crowding out of alternative voices – the changes appear to have been no more than skin deep.

My other fear is that we are in line for a re run the turbulence of the 1980’s and early 1990’s – I hope I’m wrong for all our sakes.

Almost won an Election and couldn’t seal a deal?

There are plenty of caveats and yes there is a question mark over the legitimacy of a Labour/Liberal Democrat coalition, but after yesterday no-one would be brave enough predicting anything.

Could David Cameron’s political legacy end up being he almost won and election and couldn’t seal the deal to get him through the famous door a 10 Downing Street and his party back into power after 13 years.

Denis Campbell over at UK Progressive has more

It was pundit heaven! Its audacious timing sent global media outlets into a state of LIVE apoplexy. Looking statesman-like, Gordon Brown stood before his rolling music stand outside Number 10 Downing Street and continued the Conservatives post-election nightmare. By announcing he would step down in September, he gave the LiDem leader Nick Clegg a lifeline back to left-leaning safety which immediately began a round of negotiations to form a progressive government.

Tory Leader David Cameron, who fell a tantalisingly close 21-seats short of an outright majority, gritted his teeth and played nice with LibDem leader Nick Clegg for five days. He’d come ever so close to the door of Number 10 and now may fall short because Clegg’s back-benchers won’t let this mixed marriage go forward. Someone finally woke up and asked, “did anyone remember the nameplate principles on our door?” This would be like a group of US Southern Republicans forming a coalition with New England, liberal Democrats. Talk about your shotgun weddings!

We shall have to wait and see what today brings.

Bits and pieces

While the Coalition talks continue over what form the next UK Government takes here are a few things that caught my eye.

First Lib Dem peer Shirley Williams has voiced concerns about the Conservative/Liberal Democrat deal on a few fronts first the Tories attitude and record on inequality and their economic plans but also about the prospects for the future of the Union

The article says ‘Williams was particularly concerned that there has so far been no talk of securing the composition of the United Kingdom. She said: "I am very concerned that preventing the break-up of the union has played no part in the negotiation between the Tories and Lib Dems.

"The Tory party made no gains to speak of in Scotland in this election … and recently, the Tories have been talking almost entirely about England. My sense is that negotiations cannot conclude without it being made clear how to keep the nation together, because if we do make a deal with the Tories, we are handing Scotland to the SNP on a plate."

Secondly support for tax raising powers for the Welsh Assembly came from an unexpected source today in the editorial of City of London newspaper City AM, Allister Heath said ‘For the real constitutional crisis is not that Britain has a first past the post, constituency-based system; such a mechanism works adequately in other countries, including the US.

The real issue is that it is time for a devolved English parliament – the UK should become a federation, with the national authorities responsible only for defence, foreign policy, border controls and the central bank. Everything else (including full tax raising and spending powers) should be devolved to administrations in England, Scotland, Wales and Northern Ireland, which would all be responsible for their own budgets and would no longer be able to rely on handouts from other parts of the UK. Under the current system, Scottish Labour MPs vote on English laws, while English MPs don’t vote on Scottish laws, thanks to our absurdly one-sided version of devolution.

Taxpayers in London and the Home Counties are funding huge amounts of government spending in Northern Ireland, Scotland and Wales. It is time for a constitutional revolution – but not of the kind that Labour and the Lib Dems are dreaming about.'

And finally Alan Trench over at Democracy Matters ponders who should be Welsh and Scottish Secretaries in a Conservative/ Lib Dem Government for the sake of keeping the Union together.